Organizer: Karl Fields, University of Puget Sound
Chair: Hong Yung Lee, University of California, Berkeley
Discussant: James Mulvenon, RAND Corporation
Malaysia, Taiwan and China boast annual GDP growth rates that place their nations at the forefront of development in Asia, and therefore the world. But while this could be said of a number of other Asian countries as well, these three political economies are also linked by an institutional similarity that is the focus of this panel. Among the looming state and private enterprises that have propelled each of these Asian developmental states are business conglomerates of a very different stripe. Neither public nor private, the dominant political parties in Malaysia (United Malays’ National Organization or UMNO) and Taiwan (Kuomintang or KMT) and the highly-autonomous military in China (People’s Liberation Army or PLA) each own and operate sprawling networks of productive enterprises and other assets that rank each of these political conglomerates among the largest business groups in their respective economies and have provided these entities with tremendous political clout.
This panel will include papers examining each of the three cases as well as a fourth paper that conceptualizes and categorizes the types of "quasi-corruption" that can emerge from these para-statal business ventures. This juxtaposition of relatively isomorphic institutions under divergent historical and ideological conditions should yield a rich variety of empirical data and heuristically-useful theoretical comparisons. Then will include issues regarding the clarification and obfuscation of property rights in emergent-capitalist, authoritarian regimes, the fungibility of political and economic assets in rent-seeking and electoral activities within clientelistic polities, and the capacity of political elites to adapt institutions in the face of economic and political liberalization.
Edmund Terence Gomez, University of Malaysia; K. S. Jomo, University of Malaysia
In spite of the multi-party nature of Malaysia’s political system, Malaysia is an authoritarian state, characterized specifically by the centralization of power in the executive arm of government, particularly in the hands of one party, Prime Minister Mahathir Mohamad’s UMNO. Such power has been abused by the executive to channel state rents into the hands of a dominant class of well-connected businessmen. Executive dominance over the state has thus had significant impact on the implementation of key economic policies, particularly those involving active state intervention in the economy to redress uneven inter-ethnic ownership patterns. This has also facilitated the practice of ‘political business’ and created a new class of politically well-connected, multi-racial ‘new rich.’ This paper will provide a historical perspective to the development of ‘political business,’ tracing in the process the inner workings of the broader political and economic system in Malaysia.
Karl J. Fields, University of Puget Sound
Although decidedly capitalist, Taiwan’s developmental state has been ruled by a party-state that owns outright or directly controls huge portions of the nation’s economic assets. At the center of these holdings is what some have termed "KMT, Inc.": a complex network of Nationalist or Kuomintang (KMT) party-owned enterprises (guomindang dangyingshie) that has expanded in both size and significance in recent years. The party now owns seven "private" holding companies that invest in over 150 firms with an estimated book value of NT$112 billion (US$45 billion) and an actual market value of perhaps three times that figure. A leading business journal in Taiwan consistently ranks KMT, Inc. as Taiwan’s largest private business conglomerate in terms of assets and sixth largest in terms of sales.
KMT, Inc. is the product of particular historical and ideological factors peculiar to Taiwan and this stable of party-owned enterprises has endowed the KMT regime with particular benefits and burdens. This paper describes these party-owned enterprises (POE), briefly traces their historical development, and examines the various functions and dysfunctions they have performed for the KMT regime. Over time, the POE have served as profit sources, patronage outlets, propaganda organs, developmental agents, market controllers, and diplomatic envoys. This (loosely) functional analysis is particularly useful for discerning the past utility of these POE and determining how this utility evolves as the socio-political environment in which they are embedded changes and the KMT itself transforms from a quasi-Leninist revolutionary party to a voluntary mass-based political party.
Thomas J. Bickford, University of Wisconsin, Oshkosh
In the past fifteen years, the enterprise network owned and operated by the People’s Liberation Army (PLA) has been transformed from a small, self-contained system, into a large commercial empire with extensive domestic and international business concerns. As such, the PLA represents a particularly dramatic case of Party-State capitalism. This paper examines how the PLA has adapted to the marketization of the Chinese economy since the early 1980s and how the PLA has used its position in Chinese politics to expand its economic base.
The paper will consist of three sections: the first will examine the early development of PLA enterprises; the second and primary part of the analysis will examine the factors involved in the commercialization and growth of PLA enterprises; and the third section will place PLA enterprises in a comparative context.
Andrew Wedeman, University of Nebraska, Lincoln
One the great but often overlooked paradoxes of the "Asian Economic Miracles" is that the tigers’ rapid development has generally been accompanied by high levels of corruption or "quasi-corruption." The experience of the East Asian Newly Industrialized Countries (NICs) stands in stark contrast with the apparently more common pattern where high levels of corruption have led to sustained underdevelopment or economic decline. These differences in outcome can be explained, in part, by the fact that high-level corruption in the NICs has generally entailed what I term "dividend collecting corruption," wherein elites encourage development by creating a positive economic environment and then rake off a percentage of the "growth dividend," whereas economic crisis tends to occur when elites either "loot" the economy by stealing public and private moneys and then stashing their ill-gotten gains overseas or systematically distort the economy in ways that allow them to generate and scrap off rents.
If the form of corruption rather than its incidence matters, then a key to explaining why some countries have grown rapidly despite high levels of corruption while others have foundered lies in explaining why certain forms come to predominate in some cases, that is why some elites opt for dividend collecting, while others pursue rents, and still others resort to looting. In this paper, I address this issue by examining corruption in Japan, South Korea, and Thailand. I specifically analyze why dividend collecting became the norm in Japan and South Korea during the heyday of high speed development. I then consider the impact of structural change on the efficacy of dividend collecting in these cases. I also examine the Thai case which exhibits a pattern of movement between different forms of corruption. In each case, I specifically consider whether the key factor in determining the form of corruption is structural, and hence embedded in economic and political structures, or a matter of elite choice.