III. Democratization and Multi-party Competition
Political institutions?
Page 1
Korea Japan Taiwan
Executive-Legislativ
e
Presidential (with de jure vet
o power)
Parliamentary
Semi-presidential (with de
facto veto power)
Party System One-party dominant system (before 1990) → Multi-party system (after 1990)
Division of Power Unitary state
Legislative Systems Unicameral
Bicameral (upper hous
e with the veto power)
Unicameral
Electoral System
Modified Plurality SMD w/ “P
R”list allocation → MMM (20
04)
MMD+SNTV → MMM
(1994)
Semi‐Proportional SNTV (
MMD) w/ PR list allocation
→ MMM (2006)
Judicial System Civil law tradition and weak judicial review
Central Bank Weak central bank independence
Political Actors Traditionally Strong elite-bureaucrats; Weak trade union, left-wing party, and NGOs
Legislative Initiative Both bureaucrats and individual MPs
III. Democratization and Multi-party Competition
Electoral Rules
Electoral Rules: i) Majoritarian (SMDP, AV, Two-round, SNTV) ii) Proportional (list
system or STV) iii) Mixed (Mixed Member Majoritarian or Mixed Member Proportional)
Electoral Rule change in East Asia
Page 3
III. Democratization and Multi-party Competition
Electoral Rules
Why not change/why change?
 Not change: main parties are benefitting from the current electoral rule
& effect of electoral rule change not clear
 Change: public perception (e.g. representation or efficiency) & to minimize future loss
What is special?
Page 4
III. Democratization and Multi-party Competition
Electoral Rules
Effect on Party System
Why do SMDP creates a two-party system and list PR creates a multi-party system?
Duverger’s Law: psychological effect (sincere preference to vote share) mechanical (vote
share to seat share)
Effect on Policy output
Change in the rules of the game→ change in players strategies → change in
political outcomes → change in policy choices
Page 5
Previous MMD
A A
B
BB
C
C
SMD
A
B C
III. Democratization and Multi-party Competition
Effect on Political outcome in Japan (and increasingly in Taiwan)
Today’s Faction: Small and numerous, flexible membership.
Party Centralization Public Financing: mandated all private contributions only to parties, Not
to individuals
Importance of party leadership: the rise of Koizumi and his relationship with the media
Related YouTube: https://www.youtube.com/watch?v=UJYUG1o22DI
Page 6
III. Democratization and Multi-party Competition
Changes of Policy Outcomes in Japan (and increasingly in Taiwan)
Decrease of particularistic benefits (e.g. construction projects, agricultural subsidies) &
increase of universal benefits (e.g. childcare, elderly care, parental leave)
Increasing saliency of foreign policy issues
Page 7
The Japanese Developmental
State Model and its Korean and
Taiwanese Variants
Jaemin Shim
(GIGA, Post-doctoral researcher)
I. Developmental State?
II. Colonial Origin of Developmental State 1
III. Colonial Origin of Developmental State 2
III. Japanese Developmental State and Korean variant
•Introductions
What is the developmental state?
** Four key characters
I. Developmental State?
What is the developmental state?
** Four key characters
1) Stable rule by a political-bureucratic elite not acceding to political demands that
would undermine economic growth
2) Cooperation between public and private sectors under the overall guidance of a pilot
planning agency
3) Heavy and continuing investment in education for everyone, combined with policies t
o ensure the equitable distribution of the wealth created by high-speed growth
4) And government that understands the need to use and respect methods of economic int
ervention based on the price mechanism
I. Developmental State ?
What is the developmental state?
** Asian-thing? Flying geese model
I. Developmental State?
Korea Japan Taiwan
Industrial Structure
Labour-intensive Import Sub
stitution Industry (1960~1962
)
Labour-intensive Light In
dustry (1880~1930)
Labour-intensive Import Sub
stitution Industry (1950~196
0)
Labour-intensive Light Indust
ry (1962~1970)
Capital-intensive Heavy I
ndustry (1930~1965)
Labour-intensive Light Indus
try (1960~1970)
Capital-intensive Heavy Indu
stry (1970~1980) ) Knowledge-intensive Hig
h-Tech Industry (1965~n
ow)
Capital-intensive Heavy Ind
ustry (1970~1980) )
Knowledge-intensive HighTech
Industry (1980~now)
Knowledge-intensive HighTech
Industry (1980~now)
Positive Influence of colonial legacies? (Kholi, 2004; Bruce-Cumings, 1987)
** Colonial state replaced an old weak state, holding society ay bay
1) Using Highly articulated, disciplined, penetrating colonial bureaucracy
2) North-South trunk railroad lines were lad, ports were opened, rice-cane sugar promoted
→ rice export increased in Korea and sugar export increased in Taiwan
** Semi-periphery state?
1) Manchuria – Korea – Japan
2) Southeast Asia – Taiwan - Japan
II. Colonial Origin of Developmental State 1
Positive Influence of colonial legacies? (Kholi, 2004; Bruce-Cumings, 1987)
*** Continuance of Legacy
1) Capitalists took over formerly Japanese-held industries
II. Colonial Origin of Developmental State 1
Positive Influence of colonial legacies? (Kholi, 2004; Bruce-Cumings, 1987)
*** Continuance of Legacy
2) post-war continuity
The Korean Finance Ministry and Ministry of Trade and Industry looked very much like
Japan's Ministry of Finance and MITI.
To promote foreign trade, MITI had established JETRO (the Japan External Trade
Organization), and South Korea established KOTRA (the Korea Overseas Trade
Association).
To manage technology introduced from abroad, MITI had established AIST (the Agency for
Industrial Science and Technology), and South Korea established KIST (the Korean
Institute for Science and Technology).
II. Colonial Origin of Developmental State 1
Positive Influence of colonial legacies? (Kholi, 2004; Bruce-Cumings, 1987)
*** Continuance of Legacy
2) post-war continuity
Japan early on had a Reconstruction Bank that was later replaced by the Japan
Development Bank. South Korea also initially had a Reconstruction Bank that was later
renamed the Korean Development Bank.
South Korea founded a Federation of Korean Industries similar to Japan's Federation of
Economic Organizations (Keidanren) to deal with general management issues and a
Korean Employers' Association similar to the Japan Federation of Employers' Association
(Nikkeiren) to deal with labour issues.
After Japan set up the Japan Economic Institute in Washington, D.C., to provide information
to American officials, South Korea set up a Korean Economic Institute there with similar
goals.
II. Colonial Origin of Developmental State 1
Beyond colonial legacies? (Kim, 2009)
*** Disruption of Legacy
1) Puzzle: why difference?
III. Colonial Origin of Developmental State 2
Beyond colonial legacies? (Kim, 2009)
*** Disruption of Legacy
2) Puzzle: an increase in the income level in other countries, we can
conclude that economic development was not limited to some peculiarity of Japanese
rule
III. Colonial Origin of Developmental State 2
Beyond colonial legacies? (Kim, 2009)
*** Disruption of Legacy
Answer: Some of the
Northeast Asian countries (e.g., Japan, Taiwan and Korea) undertook radical land
reforms that dramatically equalised income in society. as opposed to their Southeast Asian
counterparts. This income equality was achieved through radical land reforms undertaken
soon after independence
III. Colonial Origin of Developmental State 2
Beyond colonial legacies? (Kim, 2009)
** Negative Influence of Colonial rule?
1) In general: Colonial rule involved ‘bad’’ institutions that perpetuated income inequality,
which, in turn, impedes the provision of public goods and infrastructure, economic
opportunities and broad participation in the commercial economy (Engerman and
Sokoloff, 2002, 2005).
2) Southeast Asian case: all the Southeast Asian countries – with the sole exception of
Vietnam, which made a social revolution – more or less took over the existing colonial
institutional structure and established ‘‘neo-colonial rule”
III. Colonial Origin of Developmental State 2
Intentional land reform? (Johnson, 1987)
*** Unintended Consequences
- South Korea: the US (1945-1946) & North Korea (1950)
- : Southern landlords succeeded in recapturing the state in 1948-1949
- Taiwan: KMT from mainland China & the US
: Communist victory in mainland had to do with peasant uprising & inflation
- Japan: the US
: To fend off threat of communism & minimize totalitarian appeals
III. Colonial Origin of Developmental State 2
Discussion 1: Colonial Legacies and Developmental State
** Key Points
1) Which side do you think is correct? Based on what ground and evidence?
2) Implications to countries beyond East Asia?
3) How can we distinguish empirical and moral side?
IV. Japanese Developmental Model and its Variants
How does it look like?
IV. Japanese Developmental Model and its Variants
Iron Triangle
Bureaucrats LDP Members
Business
Sector
A Result of Iron Triangle: Miracle of Japanese Economy
Relationship between the LDP and the business sector and
the boom of Japanese economy
The postwar Japanese economy prospered rapidly. Why?
** Mainstream Explanation
Highly inter-linked system: Cross-share holding system, Main-bank system, life-long emplo
yment, and steel and rice coalition
** Some other views
1) US-Japan Treaty
2) Korea War
IV. Japanese Developmental Model and its Variants
1) Cross-share Holding System
- Keiretsu: groups of firms with interlocking shareholding
patterns. They bought each other’s shares to maintain internal control over
shareholding.
- Strength: 1. Alleviates the internal competition.
2. Stabilizes the operation of the firms
and enables the managers to have a
long view of the development.
3. Avoid the hostile foreign takeovers
IV. Japanese Developmental Model and its Variants
2) Main-bank System and Lifetime Employment
- Banks take considerable shares of firms.
Benefits: Bankers: better monitor the operation of firm finance.
Firms: easier to take long-term loan from banks.
- Result 1: Security of the long-term loan, firms are able to keep a large number of
lifetime employees.
- Result 2: Job security stimulates workers’ loyalty and motivates them to learn more which
is needed by their own firms.
IV. Japanese Developmental Model and its Variants
3) Coalition of Steel and Rice
- Farmers: voting groups of the LDP
Requirement: a closed agricultural market to avoid foreign competition and opened
industrial market to buy equipment at a lower price.
- The big companies: sources of money.
Requirement: wants a closed industrial market to avoid competition and an opened
agricultural market to buy materials at a lower price.
IV. Japanese Developmental Model and its Variants
US-Japan Treaty
- Under the treaty, both parties assumed an obligation to maintain and develop their
capacities to resist armed attack in common and to assist each other in case of armed
attack on territories under Japanese administration. However, Japan could not come to
the defense of the United States because it was constitutionally forbidden to send armed
forces overseas
- Results: Japan is able to focus on the economic Development; Military spend around
1% of GNP
IV. Japanese Developmental Model and its Variants
IV. Japanese Developmental Model and its Variants
Korean War
- War-time Special Procurement: Purchase Japanese labor and goods for use in
Korea or for use in support of other military and naval operation in the Asian
region
Korean Chaebol and Japanese Zaibatzu (財閥)
Definition: financial cliques. vertically and horizontally integrated "industrial
groups" or conglomerates, usually including their own trading company
And.
- Zaibatsu: Meiji government use protectionism to help private
firms to develop. During the two wars, Zaibatsu get significant
Development through the close relationship with war industry
How does it look like?
IV. Japanese Developmental Model and its Variants
Korean Chaebol and Japanese Zaibatzu/Keiretsu
Difference?
- Korea Chaebol does not own banks (different from Zaibatsu)
- Korean Chaebols are family-based (different from Keiretsu)
IV. Japanese Developmental Model and its Variants
Korean Chaebol and Japanese Zaibatzu/Keiretsu
Pros and Cons?
- Putting own interests before those of the nation
- Contributes to dualizing economy & exploitation
- Creates inefficiencies
- Internalize uncertainty assures steady information flow
- High trust
IV. Japanese Developmental Model and its Variants
And what about Taiwan?
Remember this….
Émigré regime… KMT vs. Communist party in mainland.. Fled in 1949…
- Brought elite groups with them, e.g. soldiers, bureaucrats, technicians….
- Still it was no more than 25 percent in 1949 (now about 14 percent)….
- KMT directly controlled the key industries by nationalizing them while Taiwanese focused
on small and medium enterprises…
IV. Japanese Developmental Model and its Variants
Implication of Developmental State Legacies on Party Politics?
Conventional meaning of left-right
- Right (libertarianism) emphasizes the idea of small government, and favours low
tax, low deficit, privatization, or minimal welfare provision, while left (social
democratic values )emphasize the reverse.
East Asian context?
- Legacies of post-war growth with equity , the gap between the haves and the havenots
was narrow. This guaranteed a comparatively close social distance between social
classes, which resulted in high levels of support for solidaristic values (Peng and Wong
2010)
- Low Gini coefficients on par with the Nordic countries. Reflecting this, at one point
Japan congratulated itself for having “a society of 100 million middle class people"
IV. Japanese Developmental Model and its Variants
The Japanese Developmental
State Model and its Korean and
Taiwanese Variants
Jaemin Shim
(GIGA, Post-doctoral researcher)
The End
•Introductions