East Asian Political Economy

Graduate School of International Studies Yonsei University

Fall 2005 (ZJ563-01) Instructor: Prof. Sang-Young Rhyu Class Hour: Thursday 15:00-18:00 Office: Millennium B/D #619 Room: Millennium B/D # 205 2123-3961 ([email protected])

Course Description This is a seminar on East Asian political economy. The objective of this course is to equip students with theoretical and conceptual tools necessary to understand the political economy of East Asia. It deals with the economic growth, Asian economic crisis, democratization, and globalization in East Asia, Japan’s reemergence and China’s emergence, East Asian regional order and regionalism, new East Asian model. Through the political economic perspective, attempts will also be made to examine and compare the path of transformation and models of East Asian capitalisms (Japan, South Korea, Taiwan, China). Central puzzles include: Was there a “miracle”? What brought economic crisis? What led the way to democracy in East Asia? Can East Asia converge completely into the Anglo-Saxon model? Can we identify an East Asian path of democratization? How do globalization and democratization affect the domestic change? Will the recent economic recovery of Japan be sustainable? Can China play the role as a regional and global leader? etc. This class will be comprised of lecture, student presentation and discussion. The reading load is moderate, and it is expected that all students will be prepared.

Requirements and Grading Students are expected to make presentations on reading, participate in discussions, submit a term- paper, and take a mid-term examination: 1) Class participation and presentation: 20% 2) Mid-term examination (Identification questions): 30% 3) Research paper: 50%

Required Readings Islam Iyanatul and Anis Chowdhury, The Political Economy of East Asia: Post-crisis Debates (Oxford and New York: Oxford University Press, 2000). Robert Wade, Governing The Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton: Princeton University Press, 1990).

1 Stephan Haggard, Pathways from the Periphery: The Politics of Growth in The Newly Industrializing Countries (Ithaca and London: Cornell University Press, 1990). Chung-in Moon and Jongryn Mo, eds., Democratization and Globalization in Korea: Assessments and Prospects [DGK] (Seoul: Yonsei University Press, 1999). Samuel S. Kim, East Asian and Globalization [EAG] (Lanham, MD: Rowman & Littlefield, 2000). Susan Berger and Ronald Dore, eds., National Diversity and Global Capitalism (Ithaca and London: Cornell University Press, 1996). Kozo Yamamura and Yasukizi Yasuba, eds., The Political Economy of Japan1: The Domestic Transformation (Stanford: Stanford University Press, 1987). Joseph E. Stiglitz and Shahid Yusuf, Rethinking The East sian Miracle (Oxford and New York: Oxford University Press, 2001). Edward J. Lincoln, East Asian Economic Regionalism, Washington, D.C,; Brookings Institutions, 2004. Ted C. Fishman, China, Inc.: How the Rise of the Next Superpower Challenges America and the World, (New York and London: Scribner, 2005).

Course Outline

Week 1. Introduction and Overview

Week 2. What is to be explained? : Miracle, crisis, democratization, and globalization The World Bank, The East Asian Miracle (1994), 27-60 Larry Diamond, “Defining and Developing Democracy” in Developing Democracy: Toward Consolidation (Baltimore and London: Johns Hopkins University Press, 1999). Robert O.Keohane and Joseph S.Nye, “Introduction,” Joseph S. Nye and John D.Donahue, Governance in a Globalizing World (Washington, D.C.: Brookings Institution Press, 2000).

Week 3. Contending Paradigms of East Asian Capitalism (1): State & Market Chung-in Moon, “Political Economy of East Asian Development and Pacific Cooperation,” Pacific Review 12:2 (1999). Chalmers Johnson, “The Developmental State: Odyssey of a Concept,” Meredith Woo-Cumings, The Developmental State, ed., (Ithaca and London: Cornell University Press, 1999). Ziya Önis. “The Logic of the Developmental State.” Comparative Politics (October 1991)

2 Week 4. Contending Paradigms of East Asian Capitalism (2): Historical Legacy & Culture Atul Kohli, “Where Do High-Growth Political Economies Come From? The Japanese Lineage of Korea’s Developmental State,” Meredith Woo-Cumings(1999).. Stephan Haggard, David Kang and Chung-in Moon, “Japanese Colonialism and Korean Development: A Critique,” World Development, vol.25, no.6 (1997). Zakaria, Fareed, “Culture is Destiny: A Conversation with Lee Kuan Yew,” Foreign Affairs 73, 2 (1994).

Week 5. Reform Pressure and Domestic Politics: Institutional Change Chung-in Moon, “Democratization and Globalization as Ideological and Political Foundations of Economic Policy,” Jongryn Mo and Chung-in Moon, eds., Democracy and the Korean Economy (Stanford: Hoover Institution Press, 1999). Samuel S. Kim, “East Asia and Globalization: Challenges and Responses,” in [EAG]. Geoffrey Garrett & Peter Lange, “Internationalization, Institutions, and Political Change,” Robert O.Keohane and Helen V. Milner, Internationalization and Domestic Politics (Cambridge: Cambridge University, 1996). Pp. 48-75.

Week 6. The Asian Crisis of 1997: Causes & Consequences Chalmers Johnson, “Economic Crisis in East Asia: The Clash of Capitalisms,” Cambridge Journal of Economics, Vol.22, No.6 (November 1998). D.Hugh Whittaker and Yoshitaka Kurosawa, “Japan’s Crisis: Evolution and Implications,” Cambridge Journal of Economics, Vol.22, No.6 (November 1998). Joseph E. Stiglitz, “From Miracle to Crisis to Recovery: Lessons from Four Decades of East Asian Experiences,” in Joseph E. Stiglitz and Shahid Yusuf, Rethinking The East sian Miracle (Oxford and New York: Oxford University Press, 2001).

Week 7. Korea (1): Democratic Transition and Consolidation Seung-joo Han, “South Korea: Politics in Transition,” in Larry Diamond, Juan Linz, and Seymour Martin Lipset, Democracy in Developing Countries: Asia (Colorado: Lynne Rienner Publishers, 1989). Chaibong Hahm and Sang-Young Rhyu, “Democratic Reform and Consolidation in South Korea: The Promise of Democracy,” in [DGK]. Byung-Kook Kim, “Party Politics in South Korea’s Democracy: The Crisis of Success,” Larry Diamond and Byung-Kook Kim, eds., Consolidating Democracy in South Korea (Boulder: Lynne Rienner Publishers, 2000).

3 Week 8. Midterm-Examination

Week 9. Korea (2): Chaebol, Economic Reform and Globalization Ha-Joon Chang and Hong-Jae Park, “An Alternative Perspective on Government Policy towards the Chaebol in Korea: Industrial Policy, Financial Regulation, and Political Democracy,” Sung-Hee Jwa and In Kwon Lee eds., Korean Chaebol in Transition: Road Ahead and Agenda (Seoul: Korea Economic Research Institute, 2000). Chung-in Moon and Jongryn Mo, Economic Crisis and Structural Reforms in south Korea: Assessments and Implications (Washington, D.C.: The Economic Strategy Institute, 2000). Sung-Hee Jwa, A new paradigm for Korea’s Economic Development: From Government Control to Market Economy (New York: PALGRAVE, 2001), Chapter 4: “The Evolution of the Chaebols: The Property Rights System and Economic Organization in Korea.”

Week 10. Japan (1): Democratization of Japanese Politics Michio Muramatsu and Ellis S. Krauss, “The Conservative Policy Line and the Development of Patterned Pluralism,” in Kozo Yamamura and Yasukizi Yasuba, eds., The Political Economy of Japan1: The Domestic Transformation (Stanford: Stanford University Press, 1987) Bradley Richardson, Japanese Democracy: Power, Coordination, and Performance (New Haven: Yale University Press, 1998), Chapter 10: “Japan as a Bargained Distributive Democracy” Scott C. Flanagan, “Value Change and Democratic Reform in Japan and Korea,” Comparative Political Studies, Vil.33, No.5 (2000).

Week 11. Japan (2): Financial Big Bang and Globalization William W. Grimes, “Japan and Globalization: From Opportunity to Constraint,” in [EAG].Takeo Hoshio and Anil Kashyap, “The 1990s: Crisis and Big Bang,” Corporate Financing and Governance in Japan: The Road to the Future (Cambridge and London: MIT Press, 2001). Nakatani Iwao, “A Design for Transforming the Japanese Economy,” Journal of Japanese Studies, 23, 2(Summer 1997). Kazuo Tsuda, “Japanese Banks in Deregulation and the Economic Bubble,” Kazuo Sato, ed., The Transformation of the Japanese Economy (New York: M.E.Sharpe, 1999).

Week 12. Taiwan: After the Transition From Above Lynn T. White III, “Globalization and Taiwan,” in [EAG]. Hung-Mao Tien, “Taiwan’s Transformation,” in Larry Diamond, Marc F.Plattner, Yun-han Chu, and Hung-mao Tien, eds. Consolidating The Third Wave Democracies: Regional Challenges (Balitimore: The Johns Hopkins University Press, 1997).

4 Shelley Gigger, From Opposition To Power: Taiwan’s Democratic Progressive Party (Boulder and London: Lynne Rienner Publishers, 2001).

Week 13. China (1): CCP-Controlled Path of Democratization Xiaobo Lu, Cadres and Corruption, stanford: Stanford University Press, 2000. Minxin Pei, “Is China Democratizing? Foreign Affairs, Vol.81 (Sept-Oct 2002). David Zweig, Internationalizing China: Domestic Interests and Global Linkages (Ithaca and London: Cornell University Press, 2002).

Week 14. China (2): Foreign Pressure and Economic Reform Ted C. Fishman, China, Inc.: How the Rise of the Next Superpower Challenges America and the World, Scribner, 2005. Susan L. Shirk, “Internationalization and China’s Economic Reforms,” Robert O.Keohane and Helen V. Milner, Internationalization and Domestic Politics (Cambridge: Cambridge University, 1996). Nicholas R. Lardy, China in the World Economy (Washington, DC.: IIE, 1994), 1-28. Neil C.Hughes, “A Trade War with China?” Foreign Affairs, July/August 2005.

Week 15. Where is East Asian Capitalism headed: Toward a Globalized and Democratic state ? Takehiko Kamo, “Globalism, Regionalism and Nationalism: Asia in Search of its Role in the Twenty-first Century,” Yoshinobu Yamamoto, Globalism, Regionalism and Nationalism (Oxford: Blackwell, 1999). T.J.Pempel, “Democratization and Globalization: A Comparative Study of Japan, South Korea, and Taiwan,” in [DGK]. Mauro F. Guillén, The Limits of Convergence (Princeton: Princeton University Press, 2001), ch.8.

Week 16: Wrap-up and Final Exam