Electoral pressures for change: the effect of political reform

A cartoon in the Asahi Shinbun dated 11 August 1993 shows the leaders of the seven political parties participating in the Hosokawa coalition government formed two days before. They are wielding samurai swords and standing triumphant on the inert body of a dinosaur labeled ‘single party control’. One of the leaders is holding a banner that reads: ‘Next is political reform’, and the caption to the cartoon expresses the following sentiment: ‘By launching [the new Cabinet], “One Great Task” has been completed’ ( Asahi Shinbun, 11 August 1993). At the time it was easy to regard the formation of the first non-Liberal Democratic Party (LDP) Cabinet for nearly 38 years as a heroic event. A party mired in corruption, preferring backstage deals to open government and massively influenced by irresponsible bureaucrats and self-serving interest groups had been vanquished by a coalition of far-sighted reformers. These reformers were proposing a coherent programme to democratise and modernise the political, economic and social systems and practices of Japan. As happens following most revolutions, however, what ensued was far more messy and confusing, the politics more murky and the achievements more ambiguous than the initial mood of euphoria would have predicted. Indeed, within a mere nine months of losing office, the LDP dinosaur had revived, and though much less powerful than before, was taking its first steps on the road to regaining its dominant political position. The Hosokawa Cabinet adumbrated a reform agenda whose principal elements were deregulation, decentralisation, economic reforms and a radical change to the electoral system for the House of Representatives. In the event, partly because the tenure of office of his government was so brief, Hosokawa’s only solid achievement in the area of political reform was a wholesale rewriting of the electoral law for the Lower House. Although, however, this was arguably the one really major political change that took place in the 1990s, to gauge its effects is far more problematic. Indeed, it is a central argument of this paper that the effects of changing the Lower House electoral system have been quite limited, and that the causes of the most crucial political changes of the 1990s must be sought largely elsewhere. (It is possible, of Pacific Economic Papers course, that the new electoral system may produce more substantial effects in the future, but in any case we cannot assume that the new system will not be further revised in the next few years.

Moving Beyond Bilateralism? Japan and the Asian Monetary Fund

This paper examines the political dynamics surrounding the Japanese government’s initial proposal for the creation of an Asian Monetary Fund (AMF) in 1997 and the arrangements that have emerged in its place. Specifically, the paper delves into why Japan attempted to embark on regional institution building independent of the United States and the International Monetary Fund (IMF) in 1997 but has since supported the close linkage to the IMF of a network of bilateral currency swap arrangements in the region. The findings reveal the formidable difficulties Japan faces in circumventing the activities of US-dominated multilateral institutions to play a greater leadership role in financial crisis management in Asia.

Moving beyond bilateralism? Japan and the Asian Monetary Fund

This paper examines the political dynamics surrounding the Japanese government’s initial proposal for the creation of an Asian Monetary Fund (AMF) in 1997 and the arrangements that have emerged in its place. Specifically, the paper delves into why Japan attempted to embark on regional institution building independent of the United States and the International Monetary Fund (IMF) in 1997 but has since supported the close linkage to the IMF of a network of bilateral currency swap arrangements in the region. The findings reveal the formidable difficulties Japan faces in circumventing the activities of US-dominated multilateral institutions to play a greater leadership role in financial crisis management in Asia

A regional bond market for East Asia? The evolving political dynamics of regional financial cooperation

This paper examines the evolving political dynamics of regional financial cooperation in East Asia since the 1997–98 Asian financial crisis, examining in particular the factors contributing to the growing momentum behind the recent Asian bond market initiative being pursued by the Association for Southeast Asian (ASEAN) nations plus Japan, China and South Korea (referred to collectively as ‘ASEAN+3’). The paper argues that this initiative is making rapid progress because it resonates positively with the domestic political agendas of many leaders in the region, is an initiative that numerous countries can claim at least partial ‘ownership’ of, and elicits considerable support from actors outside the region

What motivates regional financial cooperation in East Asia today?

For more about the East-West Center, see http://www.eastwestcenter.org/Regional financial cooperation in East Asia is proceeding with unprecedented intensity. Latest developments include two Asian Bond Funds, created by the regional central bankers group, and an Asian Bond Markets Initiative launched by the finance ministers of the Association of South East Asian Nations member states plus China, Japan, and South Korea (or ASEAN+3). Some observers continue to attribute such cooperation to sharpened antagonism between East Asia and the West since the Asian financial crisis of 1997-98. But this view overlooks a key internal driver: China's shift to a more proactive stance toward regional cooperation. Far from demonstrating an antagonism toward market-based financial systems, ASEAN+3 members are embracing more liberal rules for economic interaction in their creation of regional bond funds and markets. Financial cooperation in East Asia is today motivated by factors that differ considerably from those observed in the immediate aftermath of the Asian financial crisis and the implications extend beyond East Asia

A Regional Bond Market for East Asia? The Evolving Political Dynamics of Regional Financial Cooperation

This paper examines the evolving political dynamics of regional financial cooperation in East Asia since the 1997–98 Asian financial crisis, examining in particular the factors contributing to the growing momentum behind the recent Asian bond market initiative being pursued by the Association for Southeast Asian (ASEAN) nations plus Japan, China and South Korea (referred to collectively as ‘ASEAN+3’). The paper argues that this initiative is making rapid progress because it resonates positively with the domestic political agendas of many leaders in the region, is an initiative that numerous countries can claim at least partial ‘ownership’ of, and elicits considerable support from actors outside the region.