Organizer and Chair: Gerald A. McBeath, University of Alaska, Fairbanks
Discussant: Martin H. Sours, American Graduate School of International Management
East Asia is the site of phenomenal economic growth over the past three decades, and the relations between business and government are a critical variable in that performance. East Asia is also the site of significant democratization in the last decade, with the private sector increasing its political influence. The papers in this panel explore these two dimensions of the political economy of East Asian states: changes of governmental involvement in markets, and changing business involvement in political life.
Panelists will present detailed studies of state-business organization interaction in four East Asian states: Japan, South Korea, Taiwan, and China. Frank Schwartz begins the panel by sketching the broad pattern of interest group-state interactions in Japan. He finds that interest groups succeed in influencing the state when they are well-organized and narrowly-focused. They join specific bureaucratic agencies, groups of politicians, and individual experts to dominate policymaking in relatively self-contained issue areas.
Eun Mee Kim examines how the pattern of relations between business and government in South Korea has evolved over the last 10 years. One of Dr. Kim's central themes is that the symbiotic partnership between government and business characteristic of the Park regime has been replaced by a more adversarial relationship since the democratic transformations of 1986-87, particularly with respect to the large businesses (or Chaebol).
Gerald McBeath's paper looks at transformation of state-society relations in Taiwan over the same time period. His review of business organizations demonstrates the ways in which international economic pressures and domestic democratization have enabled the private sector to increase its political influence, both at the conglomerate and small-medium enterprise (SME) levels.
Kristen Parris' paper explores business ownership and business associations in eastern China, comparing southern Jiangsu (with a history of strong collective-based economies) to southern Zhejiang (with a dynamic private sector).
After brief critiques of the papers, our discussant Martin Sours integrates the panel themes-changing nature of the state system, business-government relations, bureaucratic policymaking, and the impacts of democratization. His concluding observations will offer both an historical and global perspective on state-society relations in East Asia.
Pidgeonholing Japan: The Emerging Consensus
Frank Schwartz, Harvard University
The two most popular models of interest-group politics in Japan are currently the pluralist and statist, but neither is adequate in itself. Although patterns naturally vary across issues and over time, what we most often see is a bureacuratic-led form of neopluralism. If the postwar era has witnessed a pluralizing trend in Japan, that is not to say that many diverse, fluctuating groups compete equally in the political marketplace. Instead, small sets of well-organized, narrowly-focused interest groups typically join specific bureaucratic agencies, groups of politicians, and individual experts to dominate policymaking in relatively self-contained issue areas.
This compartmentalization of politics generally follows the lines of ministerial jurisdiction, and agency officials are frequently able to adjust the policy conflicts that arise within their purviews in a deliberate and self-interested way. But in this context, bureaucratic leadership must be understood as coordinative, not imperative, and it must be emphasized that there are also areas where politicians (or even interest groups) exercise such leadership. The likelihood of bureaucratic leadership varies directly with the scope of administrative jurisdiction and inversely with the distributive nature of a policy.
This paper is based on original research in Japan including three case studies, one each in the areas of labor, finance, and agriculture.
Chaebol Republic: Changing State-Business Relations After the Democratic
Transition in South Korea
Eun Mee Kim, University of Southern California
The democratic transformation since 1986-87 has brought about great changes to South Korean society in general, and to state-business relations in particular. State-business relations had been changing steadily since the early 1980s, but businesses, in particular large businesses (or the Chaebol), have quickly seized the opportunity to assert their strengthened position in the society. The Korean Federation of Industries, a business organization comprised of owners and top executives of large business groups and large enterprises, has become bolder in voicing its opinions, and even opposition to the government.
This paper will examine the changing rules of the game between the state and businesses, with a special emphasis on the business organization of the Korea Federation of Industries. It will describe the scope and extent of state-business contacts revealed in a survey conducted in South Korea in 1992. The survey collected detailed information on the methods private enterprises used in interacting with government offices and bureaucrats, and the scope of those relationships. Survey findings will shed light on how state-business relations have changed, in comparison to an earlier study conducted by Jones and Sakong (1980) in the 1970s, during the height of authoritarian state-business relations.
Business-Government Relations and the Democratic Transition in Taiwan
Gerald A. McBeath, University of Alaska, Fairbanks
A major theme in the literature on developmental states (of which Taiwan is an example) is the importance of the business-government relationship in fostering rapid economic development. Most scholars have found Taiwan's state to have been relatively insulated from distributional social pressures and organizationally capable of strategic market intervention and effective policy implementation.
The onset of democratization in 1986 challenged the authoritarian framework for interest representation, and this paper chronicles the growing autonomy of the private sector. It is based on over 100 interviews in Taiwan with business leaders, organizational bureaucrats, and government officials (as well as documentary analysis) during six months of research in 1996.
National peak associations and trade groups once were coopted by the Chinese Nationalist Party (KMT). They were transmission belts for government directives to the market, supplied industrial information to economic bureaucracies, and reported on both political and economic behavior of firms.
In 1996, business leaders and organizational bureaucrats have a measure of autonomy. They are able to recruit their own officers, develop policy independently, and penetrate bureaucratic decision making. The enhanced status of the Legislative Yuan and the lack of firm KMT control in it, as well as divisions among the elite, provide an arena for mobilization of opinion, and for the expression of opposition to the regime. Some business organizations (and labor and farm groups) have supported opposition candidates in recent elections, breaking the KMT's monopoly in representation of economic organizations.
The role of business organizations in election campaigns for the Legislative Yuan and presidency are analyzed too. The paper concludes with a revision of the developmental state model, to accommodate the pluralistic social forces and democratic politics of Taiwan.
Private Business Interests and Local State in Eastern China
Kristen Parris, Western Washington University
The transition to a marketized economy in the PRC has given rise to a growing number of private and quasi private enterprises. Previously deplored as class enemies, private entrepreneurs are now (somewhat haltingly) welcomed by the party as a "necessary supplement to the socialist economy." These enterprises grew up, at first, in the interstices of the old system, but now represent a significant portion of the economy in some parts of eastern China. Recent studies suggest that the Party-state in China is moving away from Leninism toward some form of corporatism in a search for institutional arrangements that will both accommodate and control these and other competing private interests. The state has licensed a variety of associations to represent business interests and to act as "bridges between the state and private business," but the extent to which such associations actually function in the interest of business is questionable. There is every reason to believe that these associations are nothing more that a continuation of the Leninist "transmission belts" of the past. Still, in regions where the private sector has become a major source of local revenue and employment, business interests may be able to coopt these associations at the local level. Or they may dispense with these associations altogether and find alternative channels to forward their interests.
In this paper, I present a comparative study of the relationship between the state and local business in two regions in eastern China in an effort to determine how private business interests are represented at the local level and how the patterns of state-society relations may differ with different patterns of local development. Southern Jiangsu, home of the "Sunan model of development," is a wealthy region with a history of strong collective enterprise. For many years after the initiation of reform, private enterprise was discouraged in favor of more collectivist arrangements. Southern Zhejiang, and particularly Wenzhou, has long been known for its commercial culture and dynamic private economy and has been promoted by some reformers as an alternative model of development. One initial hypothesis is that where private business is a mainstay of the local economy (Wenzhou), private entrepreneurs will have the power to coopt business associations and penetrate the state, while in those regions where the private sector is weak (Sunan), business generally and private business associations in particular will be controlled by the local state. The paper is based on interviews conducted and materials collected in China in the summer and fall of 1996.