Pragmatism and public policy in East Asia : origins, adaptation and development

Austin, Ian Patrick. (2001). Pragmatism and public policy in East Asia : origins, adaptation and development PhD Thesis, School of Political Science and International Studies, The University of Queensland.

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Author Austin, Ian Patrick.
Thesis Title Pragmatism and public policy in East Asia : origins, adaptation and development
School, Centre or Institute School of Political Science and International Studies
Institution The University of Queensland
Publication date 2001
Thesis type PhD Thesis
Supervisor Dr. Ulf Sundhaussen
A/Prof Joseph Chai
Total pages 283
Collection year 2001
Language eng
Subjects L
360201 Public Policy
750601 Understanding political systems
349901 Political Economy
720199 Macroeconomic issues not elsewhere classified
Formatted abstract

One gets the feeling that each proponent has a pet theory to promote as an explanation of dragon achievement - Confucian ethics, neoclassical market virtues, direction by clever government, or whatever... Too often, generalisation made about economic performance are based on selection of facts to fit the theory, a sure sign that the theory is suspect.... What is need is a redefinition of some of the concepts and variables used in analysis and a longer time perspective for viewing the growth process... there should be more solid empirical work on what actually happened in the economies of the four dragons. As I have said before, theorising on the basis of selected facts and preconceived ideas - too often detected in the literature - remains a good road to intellectual stagnation. 

                                                                                      Dr Goh Keng Swee, 1993. 

This thesis uses Edgar H. Schein's (1996) examination of strategic pragmatism (incorporating economic nationalism. State capitalism, geo-strategic reasoning, political stability, dynamic civil service, primacy of people, sector collaboration) as applied to Singapore's Economic Development Board (EDB) to explore the motivation for the East Asian elites' national economic developmental objectives. The nations studied include Japan, Taiwan, South Korea, Singapore and Indonesia. The East Asian elites' refers specifically to those policymakers who have controlled the revenues of their States. The thesis takes an empirical approach by examining the East Asian elites' reasoning behind State-intervention deemed likely to secure domestic legitimacy, their respective nations geo-sfrategic positions, and broader economic development (Goh, 1993., Woo-Cumings, 1998, Doshi and Coclanis, 1999). 

In line with its empirical objective, the thesis draws heavily upon the words and the works of leading policymakers such as Ito Hirobumi (Japan, 1889), Kim Chung-yum (South Korea, 1994), Lee Kuan Yew (Singapore, 1998), Goh Keng Swee (1972, 1977, 1995, Singapore), Hon Sui Sen (Singapore, 1997), Radius Prawiro (1998, Indonesia) and Anwar Nasution (1991, 1994, 1995, 1999, Indonesia) and others. Collectively these policy leaders represent the economic and financial architects of the respective East Asian nations examined in this study. As such, their works are given priority. Also given priority are empirical studies already undertaken by a number of prominent scholars in the field of East Asian political economy (Doshi and Coclanis 1999, Morris-Suzuki 1994, Sugiyama 1994, Yoshitake 1986, Brookhiser 1999, LaFeber 1997, Beasley 1995, Fallows 1995, Cumings 1997, Aoki, 1995, Low 1998, 1999, Quah (J.S.T), 1994, 1996, 1998, Quah (S.R) 1995, Tan and Toh 1998, Tay, 1999, Kwok 1999, Hill, 1995. 1998, 1999, Maclntyre, 1994, 1999, Pengastu, 1994, 1999, Chalmers and Hadiz 1997, and others). Reflecting the diversity of source^ utilised, the thesis should be viewed as a multidisciplinary reading of East Asian public policy, utilising historical, economic history, public policy, business policy, sociological and behavioural science sources, and not as a strictly political science disciplinary examination (Olds, Dickens 1999, Tan and Toh, 1998).

Chapter One 

Taking a long-term historical perspective, the thesis argues that the East Asian elites, beginning with Japan's Meiji Restoration (1868), were motivated primarily by pragmatism and the practical considerations facing them as late-developing nations in a world of competing nations (political, economic and military). They did not burden themselves with ideological constraints in reference to their efforts to maintain sovereignty options (Morris-Suzuki 1994, Yoshitake 1986, Sugiyama 1994). Instead, this thesis shows that the respective East Asian elites selectively adopted and adapted interventionist developmental policies on the basis, not of ideological considerations (interventionism vs market), but due to pragmatic reasoning that reflected the respective elites own domestic and geopolitical considerations. (Ito 1889, Kim 1994, Schein, 1996, Goh 1972, 1977,1995, Quah (J.S.T), 1994, 1996, 1998, Quah (S.R), 1995, Somjee (A.H.) and Somjee (G.) 1995, Prawiro 1998, Cumings 1997, Lind, 1997, Low, 1999, Hill 1998, 1999). 

Chapter Two

 It explores how for the Meiji elite, operating in the mercantile international environment of the late nineteenth century, the best policy options were practical State-interventionism, as conducted by Alexander Hamilton of the U.S., in theory by Friedrich List of Prussia, and again in practice by Otto von Bismarck in Prussia and Germany (Smith, 1776, Hamilton, 1788, List 1844, Beard, 1913, Sugiyama, 1994, Fallows 1995, Lind 1997, LaFeber 1997, Brookhiser 1999, Cumings 1999). Crucial, therefore, to a reading of thisthesis is an understanding of the seeming negation of Hamiltonian and Listian influence on East Asian development, and a corresponding selective reading of Adam Smith, within broader Anglo-American scholarship (N^ead, 1996, Fallows, 1995, Lind, 1997, Cummings 1999). 

Chapter Three

 In this chapter, it will be argued that for the late-developing economies of East Asia, as with earlier late-developing economies in the U.S.A. and continental Europe, the State alone is capable of adapting and developing the modern political and economic institutions necessary for rapid economic development. Only a unified State elite, committed to instituting rapid modernisation, is capable of harnessing the severely-limited human and capital resources within an under-developed economy to create developmental institutions designed for nation-building. As for the policy-makers of East Asia, from Japan's Meiji elite (1868-1912) to Indonesia's New Order regime (1966-1998), they did not reject market-oriented policies because of ideological opposition, but intervened with State policies only when the market and private institutions had not, or could not, deliver national sovereignty and economic development. The East Asian elite sought, through public institutions, to facilitate the development and the cooperation of the private-sector in achieving long-term strategic national development. In doing so, both the institutional capacities of the State and private-sectors of the East Asian nations were strengthened. This has enabled the East Asian elites to apply both interventionist and market-oriented policies simultaneously throughout the development of key areas of their national economies and shows that strategic pragmatist ideals, and not neoclassical or statist ideology, defined their actions. (Ito (1889), Kim (1994), Lee (1998), Goh (1972, 1977, 1995), Hon (1997), Prawiro (1998), Nasution (1991, 1994, 1995, 1999), Doshi and Coclanis 1999, Morris-Suzuki 1994, Sugiyama 1994, Yoshitake 1986, Brookhiser 1999, LaFeber 1997, Beasley 1995, Fallows 1995, Cumings 1997, Aoki, 1995, Low 1998, 1999, Quah (J.S.T), 1994, 1996, 1998, Quah (S.R), 1995, Tan and Toh 1998, Tay, 1999, Kwok 1999, Hill, 1995, 1998, 1999, Maclntyre, 1994, 1999, Pengastu, 1994, 1999, Chalmers and Hadiz 1997, and others). 

Chapter Four 

The classical and neoclassical approaches developed from Adam Smith's work have simply ignored the fact that the Anglo-American economies, while modelled on classical and neoclassical theory, have developed their own financial systems under powerful State-regulatory institutions. The U.S.A. government's financial-sector regulatory powers, established by Alexander Hamilton, provide a principal example. Furthermore, it ignores continental Europe's development of a State-credit system over a period of centuries, in which the State played the central role. The Meiji Japanese elite, and later the other East Asian elites, just as Hamilton and Bismarck did, adopted the practice of State-intervention in the financial system to ensure national industrial and military sovereignty. The Meiji elite in fact did originally adopt a U.S-type financial system, but its weakness was exposed not only in Japan, but also in the U.S.A., where the 1873 U.S. stockmarket crash left the nation in depression for the next twenty-five years. Not surprisingly, for a new elite attempting to establish its legitimacy, the open failure of the U.S. model was in stark contrast to the relative financial sector stability provided by Bismarck's Germany at this time. Not surprisingly, they rapidly adopted and adapted the latter's system. The Meiji model has, in turn, itself been adopted and adapted throughout East Asia. (Ito (1889), Kim (1994), Lee (1998), Goh (1972, 1977, 1995), Hon (1997), Prawiro (1998), Nasution (1991, 1994, 1995, 1999), Doshi and Coclanis 1999, Morris-Suzuki 1994, Sugiyama 1994, Yoshitake 1986, Brookhiser 1999, LaFeber 1997, Beasley 1995, Fallows 1995, Cumings 1997, Aoki, 1995, Low 1998, 1999, Quah (J.S.T), 1994, 1996, 1998, Quah (S.R) 1995, Tan and Toh 1998, Tay, 1999, Kwok 1999, Hill, 1995, 1998, 1999, Maclntyre, 1994, 1999, Pengastu, 1994, 1999, Chalmers and Hadiz 1997, and others). 

Chapter Five 

Chapter Five (5), a Case Study of Singapore's industrial development, is the product of research undertaken by, the author during three periods (1996, 1997, 1998-99) at the Institute for Southeast Asian Studies (ISEAS), Singapore. It examines the work not only of Lee Kuan Yew, but also those of Singapore's economic architects, Goh Keng Swee and Hon Sui Sen. The role of these two individuals in Singapore's economic development must not be understated. Both served long periods as finance ministers and heads of key economic institutions, such as the Monetary Authority of Singapore (MAS), the Economic Development Board (EDB), the Development Bank of Singapore Ltd (DBS), and others that today form the apex of Singapore's economic pyramid. Along with compilations of Lee's, Goh's and Hon's works, scholarly works (published since the original submission of this thesis) examining their economic roles include those by Tilak Doshi and Peter Coclanis (1999), Kwok Kian-Woon (1999) and Linda Low (1998, 1999). These works, and others, place the role of practical measured outcomes as primary to economic policymaking in Singapore, and, thereby, fully substantiate the contention made by this author in this thesis. (Lee (1998), Goh (1972, 1977, 1995), Hon (1997), Doshi and Coclanis 1999, Low 1998, 1999, Quah (J.S.T), 1994, 1996, 1998, Quah (S.R), 1995, Tan and Toh 1998, Tay, 1999, Kwok 1999, Somjee (A.H.) and Somjee (G.) 1995, and others). 

Chapter Six

It provides a brief overview of the thesis, reinforcing the key premise of this thesis that 'strategic pragmatism' provides the most-appropriate definition of the East Asian elites' policy-decision-making process. It is only through close empirical examination, not only of the considerations and the constraints faced by the East Asian elites, but also those faced by the policymakers of earlier late-developing States, that an acute understanding can be effectively drawn of the motivation for State-intervention. 

Keyword East Asia -- Economic policy
East Asia -- Economic conditions

Document type: Thesis
Collection: UQ Theses (RHD) - UQ staff and students only
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Created: Fri, 24 Aug 2007, 17:44:18 EST