Introduction: Finance, Development and the State in East Asia

ABSTRACT

There is much change afoot in the financial systems of East Asia. Historically, states in the region have actively sought to shape financial markets for developmental – and indeed other political – ends. Yet, their capacity to do so has been significantly transformed by the fragmentation and transformation of financial systems in East Asia as well as the onslaught of globalising forces more generally. The increasing complexity of the financial landscape poses new challenges for the types of financial policymaking traditionally associated with the notion of the ‘developmental state’. These developments raise important questions for those interested in the relationship between finance, development and the state – not only in East Asia – but across the globe. How, to what extent, in what ways and with what purpose, do East Asian states continue to intervene in their financial markets? Can their interventions still meaningfully be characterised as ‘developmental’ in nature? If so, how effective are they? In seeking to address such questions, the contribution of this special section is threefold. First, theoretically, it advances debate on the relationship between finance and the state in East Asia, in particular against the background of new forms of financial (dis-)intermediation. Second, conceptually, it situates the changes it analyses vis-à-vis a renewed interest in questions of legitimacy and social purpose. Third, the collection provides new empirical insights drawing on original fieldwork in Northeast and Southeast Asia.

KEYWORDS:

• Finance
• development
• developmental state
• legitimacy
• social purpose
• East Asia

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Lena Rethel is Associate Professor of International Political Economy at the University of Warwick and a 2018–2019 Leverhulme Research Fellow.

Elizabeth Thurbon is a Scientia Fellow and Associate Professor of International Political Economy in the School of Social Sciences at UNSW Sydney.

Notes

1 For this reason, Weiss (2014, p. 6) rejects recent characterisations of the US as a ‘developmental state’, for while American policymakers have actively intervened in the economy to shape economic outcomes, their primary motivation was military supremacy, not commercial advancement.See Thurbon and Weiss (2018) for a critique of the over-stretching of the developmental state label, and for a comparative analysis of the national security and developmental mindsets that have informed economic governance in the US and Korea respectively since the mid 20^th Century.