Globalism and Regionalism: The East Asian Currency Crisis and Institutional Building

  • Motoshi SuzukiEmail author
Part of the The Political Economy of the Asia Pacific book series (PEAP)


Two issues arise when building a regional institution. States must coordinate their choices on the arrangements, which is often complicated by asymmetric information where states have differing expectations about appropriate institutional arrangements. In East Asia, coordination and information problems are aggravated by regional rivalries that constrain the flow of interstate communications. This chapter analyzes these problems using game-theory models with empirical references to the East Asian currency crisis and subsequent efforts at building a regional currency management institution. Successful institutional building promotes information sharing and the convergence of states’ expectations, which facilitate coordination through either an interstate (intra-regional) communication channel or delegation to a global (extra-regional) institution. Indeed, while creating a regional agreement on foreign reserve swaps between states’ central banks or the Chiang Mai Initiative (CMI) to prevent another crisis, East Asian states used an institutional link to the International Monetary Fund (IMF) as a mechanism to overcome these problems and relied on an intra-regional communication channel, the ASEAN plus Three (APT) framework, to realize a more autonomous CMI and to reduce regional rivalries.


Communication Asymmetric information Cheap talk Chiang-Mai Initiative (CMI) International Monetary Fund (IMF) 


  1. Acharya, A. (2000). Constructing a security community in Southeast Asia: ASEAN and the problem of regional order. New York: Routledge.Google Scholar
  2. Aggarwal, V., Koo, M. G., Lee, S., & Moon, C.-i. (Eds.). (2009). Northeast Asian regionalism: Ripe for integration? Berlin: Springer.Google Scholar
  3. Crawford, V., & Sobel, J. (1982). Strategic information transmission. Econometrica, 50, 1431–1451.CrossRefGoogle Scholar
  4. Dent, C. A. (2008). East Asian regionalism. New York: Routledge.Google Scholar
  5. Farrell, J., & Rabin, M. (1996). Cheap talk. Journal of Economic Perspectives, 10, 103–118.CrossRefGoogle Scholar
  6. Gilpin, R. (1981). War and change in world politics. New York: Cambridge University Press.CrossRefGoogle Scholar
  7. Grimes, W. (2009). Currency and contest in East Asia: The great power politics of financial regionalism. Ithaca: Cornell University Press.Google Scholar
  8. Hayashi, S. (2006). Japan and East Asian monetary regionalism: Toward a proactive leadership role. New York: Routledge.Google Scholar
  9. Henning, R. C. (2009). The Future of the Chiang Mai Initiative: an Asian monetary fund? Policy Belief PB09-5. Washington D.C: Peterson Institute for International Economics.Google Scholar
  10. Institute for International Monetary Affairs (IIMA). (2002). Policy evaluations of Japan’s support to countries Affected by the Asian currency crisis. Tokyo: Institute for International Monetary Policy.Google Scholar
  11. Kahler, M. (2000). Legalization as strategy: The Asia-Pacific case. International Organization, 54, 549–571.CrossRefGoogle Scholar
  12. Katada, S. (2001). Banking on stability. Ann Arbor: University of Michigan Press.CrossRefGoogle Scholar
  13. Katzenstein, P. (2005). A world of regions: Asia and Europe and the American imperium. Ithaca: Cornell University Press.Google Scholar
  14. Kawai, M. (2005). East Asian economic regionalism: Progress and challenges. Journal of Asian Economics, 16, 29–55.CrossRefGoogle Scholar
  15. Keohane, R. O. (1982). After hegemony. Princeton: Princeton University Press.Google Scholar
  16. Keohane, R. O., & Nye, J. S. (1977). Power and interdependence: World politics in transition. Boston: Brown, Little.Google Scholar
  17. Kindleberger, C. (1973). The world in depression, 1929–1939. Berkeley: University of California Press.Google Scholar
  18. Krasner, S. (1991). Global communications and national power: Life on the Pareto frontier. World Politics, 43, 336–366.CrossRefGoogle Scholar
  19. Kuroda, K. (2003). Tsuka Gaiko (Currency Diplomacy). Tokyo: Keizai Toyo Shinposha.Google Scholar
  20. Lake, D. (2009). Regional hierarchy: Authority and local international order. Review of International Studies, 35, 35–58.CrossRefGoogle Scholar
  21. Lee, Y. W. (2006). Japan and the Asian monetary fund: An identity-intention approach. International Studies Quarterly, 50, 339–366.CrossRefGoogle Scholar
  22. Lipscy, P. Y. (2003). Japan’s Asian monetary fund proposal. Stanford Journal of East Asian Affairs, 3, 93–100.Google Scholar
  23. Mansfield, E. D., & Milner, H. V. (1999). The new wage of regionalism. International Organization, 53, 598–627.CrossRefGoogle Scholar
  24. Martin, L. L., & Simmons, B. A. (1998). Theories and empirical studies of international institutions. International Organization, 52, 729–757.CrossRefGoogle Scholar
  25. Milgrom, P., & Roberts. (1992). Economics, organization and management. Upper Saddle River, N. J.: Prentice Hall.Google Scholar
  26. Morgenthau, H. (1986). Politics among nations (6th ed.). New York: McGraw-Hill.Google Scholar
  27. Narine, S. (2003). The idea of an Asian monetary fund: The problems of financial institutionalism in the Asia-Pacific. Asian Perspective, 27, 65–103.Google Scholar
  28. Park, Y. C., & Wang, Y. (2005). The Chiang Mai Initiative and beyond. The World Economy, 28, 91–101.CrossRefGoogle Scholar
  29. Pempel, T. J. (Ed.). (2005). Remapping East Asia: The construction of a region. Ithaca: Cornell University Press.Google Scholar
  30. Ravenhill, J. (2001). APEC and the construction of Pacific-Rim regionalism. New York: Cambridge University Press.Google Scholar
  31. Rozman, G. (2004). Northeast Asia’s stunted regionalism: Bilateral distrust in the shadow of globalization. New York: Cambridge University Press.CrossRefGoogle Scholar
  32. Ruggie, J. G. (1998). Constructing the world polity. New York: Routledge.CrossRefGoogle Scholar
  33. Sakakibara, H. (1998). Kokusai Kinyu no Genba (International finance today). Tokyo: PHP Research Institute.Google Scholar
  34. Suh, J. J., Katzenstein, P., & Carlson, A. (Eds.). (2004). Rethinking security in East Asia: Identity, power and efficiency. Stanford: Stanford University Press.Google Scholar
  35. Suzuki, S. (2006). Chairmanship in ASEAN+3: A shared rule for behavior, Discussion paper (Vol. 9). Chiba: Institute of Developing Economies.Google Scholar
  36. Waltz, K. N. (1979). Theory of international politics. Reading: Addison-Wesley.Google Scholar
  37. Wendt, A. (1999). Social theory of international politics. New York: Cambridge University Press.CrossRefGoogle Scholar

Copyright information

© Springer Japan KK 2017

Authors and Affiliations

  1. 1.Graduate School of LawKyoto UniversityKyotoJapan

Personalised recommendations