East Asian Political Economy s1

Graduate School of International Studies Yonsei University East Asian Political Economy

Spring 2009 (ISA6101) Instructor: Prof. Sang-Young Rhyu Class Hour: Fri. 09:00-12:00 Office: New Millennium B/D #619 Room: New 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 crisis in 1997 and global financial crash of 2008, 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 capitalism (Japan, South Korea, Taiwan, China). Central puzzles include: Was there a “miracle”? What brought about the economic crisis in 1997 and 2008? 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 does globalization and democratization affect 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 lectures, student presentations, and discussions. The reading load is moderate, and it is expected that all students will be prepared. The course is in political science not in the field of economics. A background in economics is neither necessary nor sufficient for doing well in this course.

* A special lecture and discussion (A Practical Guide from Your First Ideas to Your Finished Paper) will be made after the mid-term exam, which is designed to help you in every aspect and stage of your term paper project.

Requirements and Grading Students are expected to make a presentation on the readings, 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) Term paper proposal: 10%, 4) Term paper: 40%

1 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). 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 (Seoul: Yonsei University Press, 1999). Samuel S. Kim, East Asian and Globalization (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 Asian Miracle (Oxford and New York: Oxford University Press, 2001). Ted C. Fishman, China, Inc.: How the Rise of the Next Superpower Challenges America and the World, (New York and London: Scribner, 2005). Vinod K. Aggarwal, Min Gyo Koo, eds., Northeast Asia: Ripe for Integration? (New York: Springer, 2008). Andrew Walter, Governing Finance: East Asia’s Adoption of International Standards (Ithaca and London: Cornell University Press, 2008).

Course Outline

Week 1. Introduction and Overview: What is to be explained? 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 2. Contending Paradigms of East Asian Capitalism (1): State & Market Ziya Önis. “The Logic of the Developmental State.” Comparative Politics (October 1991)

2 Chung-in Moon and Rashemi Prasad. “Beyond the Developmental State: Networks, Politics, and Institutions.” Governance. Vol.7, No.4 (July 1994). pp. 360-386. Joseph Wong, “The Adaptive Developmental State in East Asia,” Journal of East Asian Studies, Vol.4, No.3 (September/December 2004), pp. 345-362.

Week 3. 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). Nayan Chanda, “When Asia Was One,” Global Asia, Vol.1, No.1 (September 2006), pp. 58-68.

Week 4. 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 5. The Asian Crisis of 1997 and The Global Crash of 2008: 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). Roger C. Altman, “The Great Crash, 2008,” Foreign Affairs, Vol.88, No.1 (January/February 2009), 2-14.

Week 6. 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

3 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).

Week 7. 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). 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.” Choong Yong Ahn, “South Korea: Wary of Another Financial Crisis,” Global Asia, Vol.3, No.4 (Winter 2008), pp. 34-43.

Week 8. Midterm-Examination

Week 9. 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) Lonny E.Carlile, “The Politics of Administrative Reform” Lonny E. Carlile and Mark C. Tilton, eds., Is Japan Really Changing Its Ways? (Washington D.C., Brookings Institution Press, 1998), pp.76-110. Patrick Koellner, “Japanese Lower House Campaigns in Transition: Manifest Changes or Fleeting Fads?,” Journal of East Asian Studies, 9 (2009), pp. 121–149

Week 10. Japan (2): Financial Big Bang, Deregulation 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).

4 Yuko Kawamoto, “Japan’s Economic Woes: It’s About Politics,” Global Asia, Vol.3, No.4 (Winter 2008), pp. 29-33.

Week 11. Taiwan: After the Transition From Above 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). Shelley Gigger, From Opposition To Power: Taiwan’s Democratic Progressive Party (Boulder and London: Lynne Rienner Publishers, 2001). Su-Mei Ooi, “The Transnational Protection Regime and Taiwan’s Democratization,” Journal of East Asian Studies 9 (2009), pp. 57–85. Vincent Wei-cheng Wang, “The Impact of Taiwan’s 2008 Elections on Cross-Strait Relations: A Game- Theoretical Analysis,” Asian Perspective, Vol 32, No. 2, 2008, pp. 145–172.

Week 12. 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). Aron L.Friedberg, “The Future of U.S.-China Relations: Is Conflict inevitable?” International Security, Vo.30, No.2 (Fall 2005). George J. Gilboy and Benjamin L. Read, “Political and Social Reform in China: Alive and Walking,” The Washington Quarterly, (Summer 2008), pp. 143-164

Week 13. China (2): Foreign Pressure and Economic Reform 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), pp. 1-28. Neil C.Hughes, “A Trade War with China?” Foreign Affairs, July/August 2005. Wang Yong, “Domestic Demand and Continued Reform: China’s Search for a New Model,” Global Asia, Vol.3, No.4 (Winter 2008), pp. 24-28. Wing ThyeWoo, “Understanding the Sources of Friction in U.S.–China Trade Relations: The Exchange Rate Debate Diverts Attention from Optimum Adjustment,” Asian Economic Papers, (2008) pp. 62-95.

Week 14. Security Goods and Trade Goods in East Asia Sang-young Rhyu and Seungjoo Lee, “Changing Dynamics in Korea-Japan Economic Relations: Policy Ideas and Developmental Strategies,” Asian Survey, Vol.XLVI, No.2 (March/April 2006),

5 pp.195-214. Koo Min Kyo, “From Multilateralism to Bilateralism? A Shift in South Korea’s Trade Policy” Vinod K. Aggarwal and Shujiro Urata, Bilateral Trade Agreements in the Asia-Pacific: Origins, Evolution,and Implications (New York and London: Routledge, 2006), pp.140-159. Larry A. Niksch, “North Korea’s Nuclear Weapons Program,” CRS Issue Brief for Congress, The Library of Congress, U.S. (Updated April 7, 2006). Thomas J.Christersen, ”Fostering Stability or Creating a Monster? The Rise of China and U.S. Policy Toward East Asia”, International Security, Vol.31, No.1 (Summer 2006).

Week 15. Wrap –up: Where is East Asian Capitalism Headed?

Debates and Term Paper Presentations

Week 16: Final Exam