Korean political economy ten years after the crisis

행사명 : Conference on East Asia : A decade after the crisi

The Microfoundations of the Developmental State and the Asian Economic Crisis

Contrary to the dominant view that the developmental state evolved to reduce transaction costs (such as moral hazard), it is argued that it represented, first and foremost, a policy compromise between business and government over redistribution and market competitiveness. This compromise was possible because of favorable political conditions: a long shadow of the future, a favorable payoff structure, and an unequal distribution of power (in favor of the government). The long shadow of the future, in particular, was decisive in allowing the government and business to commit to and enforce their agreement. In some East Asian countries, however, political changes shortened the time horizon of state and business elites, weakening their policy cooperation and increasing the vulnerability of the economy to a crisis. This theory is tested against the cases of nine East Asian countries, using the stability of the party system as a proxy for the length of the time horizon and thus, the ability of actors to make a credible commitment. Consistent with theory, it is found that the more fragmented or divided a country's party system (i.e. the shorter the time horizon) had become before the outbreak of the crisis, the more severe and costly the economic crisis has been in that country.Microfoundations, developmental state, Asian economic crisis, principal-agent view, cooperation/bargaining view,

Ending Economic Sanctions

Little attention has been paid to how and when economic sanctions end, especially compared with the amount of research on their effectiveness. A game in which the ending of sanctions is part of interstate bargaining about a contested policy is analyzed. In case of audience costs, sanctions may occur because governments use strategies that commit them to their ideal policy position. Governments use as constraints domestic political groups that have an interest in the disputed policy. Alternatively, rent-seeking enables governments to obtain political gain from the opportunities for side payments provided by sanctions. Results show that commitment strategies help states improve their bargaining position and make the resolution of the conflict more difficult. Data on the duration and ending of sanctions initiated in the period between 1914 and 1990 are used to test these hypotheses. The analyses provide clear evidence that commitment strategies affect the duration of sanctions. </jats:p

Political economy of South Korea's transition, 1961-2008

행사명 : KDI Conferenc