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459s13 lecture2 3

  1. 1. POLS 459POLITICS OF EAST ASIASession 1 topic: Introduction to the courseSession 2 topic: From poverty to prosperityProfessor Timothy C. LimCalifornia State University, Los Angeles
  2. 2. how to study change and continuitya question: how do we go about identifying, understanding !and explaining those forces or factors most important to the !processes of change and continuity in East Asia?this is not a simple question, nor is it a question that we should take lightly, orgloss over by making a few cursory comments and then moving on to the more“important stuff” ... indeed, the question of “how to study” change andcontinuity in East Asia is the essential starting point for this course POLITICS OF EAST ASIAintroduction to the course
  3. 3. how to study change and continuityto explain and understand economic, social, and political phenomena, !we need a plan—a coherent and systematic way of organizing andsupporting our ideas and argumentsthis requires us to deal head-on with two fundamental elements in any socialscientific analysis, which are ... POLITICS OF EAST ASIAintroduction to the coursetheory  method&
  4. 4. how to study change and continuityfirst, a few words about theory theory cannot be avoided. this is because, no matter pragmatic orcommonsensical we think we are, any time we make a claim or argumentabout a social, political or economic phenomenon we are engaged in aprocess of theorizing. consider, for a moment, the question we discussedearlier, “What are the reasons for East Asia’s economic success?” POLITICS OF EAST ASIAintroduction to the courseany answer you or anyone else advances is premised on a slewof theoretical assumptions, propositions, and principles
  5. 5. how to study change and continuitythese assumptions, propositions, and principles revolve around questionsof “agency” and “structure” (e.g., are individuals mostly responsible forstrong economic growth, or is economic growth premised on factorsbeyond an individual’s control?); they are premised on identifying the keyforces or processes of change (economic, political, cultural, social); theyare premised on assumptions about human nature (are we rationalactors?); and so on ... we will address all these issues in more detail as weproceed throughout the quarter POLITICS OF EAST ASIAintroduction to the courseany answer you or anyone else advances is premised on a slewof theoretical assumptions, propositions, and principles
  6. 6. how to study change and continuitysecond, we need to know what theory (in general) is ... theory can be defined in a number of ways. For our purposes, we definetheory as a simplified representation of reality, and a framework ofanalysis within which facts are not only selected but also interpreted,organized, and fitted together so that they create a coherent wholeembedded in this definition are the following key points (some ofyou may remember these from POLS 373) ...POLITICS OF EAST ASIAintroduction to the course
  7. 7. how to study change and continuity§  theory necessarily simplifies reality§  theory helps us to determine what facts are important, "meaningful, and relevant§  theory guides our interpretation of the facts (what do the facts mean?)§  fheory tells us how to organize the facts—how do different facts relate toone another? Which are primary and which are secondary?§  theory allows us to develop “whole arguments”POLITICS OF EAST ASIAintroduction to the course
  8. 8. how to study change and continuity third, we need to learn and understand specific theoretical " models or approaches"our main reading and this class is partly organized !around a “competing perspectives” approach: simply !put, this means that we will examine contrasting 
arguments about major issues in East Asia: economic !growth and industrialization, political continuity and !change (i.e., democratization), and the dynamics of !migration/immigrationPOLITICS OF EAST ASIAintroduction to the course
  9. 9. how to study change and continuity the competing perspectives approachthis course assumes that each provides indispensable !insights into a proper understanding of continuity and !change in East Asia, and thus each needs to be taken !seriously. Moreover, we believe that the systematic !juxtaposition of these competing viewpoints will !allow for a more enriching and multidimensional !understanding than any single perspectivePOLITICS OF EAST ASIAintroduction to the course
  10. 10. how to study change and continuity the competing perspectives approach—a caveatat the same time, a competing perspectives approach!is potentially very confusing: after all, why should !there be so much disagreement? even more, how !are students supposed to figure out which perspective!is “right” and which are “wrong”?POLITICS OF EAST ASIAintroduction to the coursein this course, we will try to cut through theconfusion by providing a path toward synthesisor integration ...
  11. 11. how to study change and continuity an integrative approachthe path we use will be based on the constructed actor modelthe “constructed actor” is shorthand for a more!elaborate notion articulated by Daniel Little, who !used the phase, “the structured circumstances !of choice of socially constructed actors” POLITICS OF EAST ASIAintroduction to the course
  12. 12. how to study change and continuity an integrative approach—the basicsthe constructed actor model is partly premised on a micro-levelapproach—i.e., a focus on individual actorsat the same time, actors are understood to be!“socially constituted,” which means that they are !shaped by a larger current of social facts, such as!value systems, social structures, extended social!networks, and the like: this also means that the!constructed actor model is a multi-level approach POLITICS OF EAST ASIAintroduction to the course
  13. 13. alittlemoreonlevels-of-analysis
  14. 14. how to study change and continuity an integrative approach—the basicsIn the CAM, it is individuals who make decisions or choices and it isthrough these choices that certain outcomes are produced (such as rapideconomic growth); yet, these choices are always !conditioned or constrained by an array of other!factors, some of which are extremely powerfulin the CAM, we need to identify and explain how "individual choices interact with social, political, "geostrategic, institutional, cultural, economic contexts POLITICS OF EAST ASIAintroduction to the course
  15. 15. how to study change and continuity What does all this mean at a more down-to-earth or practical !level? It means, first and most simply, that ‘people matter.’ Thus,we always need to stay focused on individual actors: again, itmatters what choices they make and what actions they take ....Yet,it also means that we must take a step back from the actors; wecannot, in other words, ignore all those factors and forces that gointo shaping an individual’s attitudes, perceptions, values, andbeliefs. The cultural and social milieu in which people interact alsomatters. Nor can we ignore the institutional and structural contextwithin which individual decisions are made.POLITICS OF EAST ASIAintroduction to the course
  16. 16. how to study change and continuity an integrative approach—the basicswe will have much more to say about the constructed actor model as weproceed throughout the quarterfor now, simply keep in mind that it an essential element of"the heuristic approach we will use in this course;"it is also a model that you must endeavor to master,"as you will be required to “apply” the constructed"actor model in your own analysesPOLITICS OF EAST ASIAintroduction to the course
  17. 17. how to study change and continuity methodological issuesexplaining change and continuity require more than just a discussion andapplication of theory—we also need to be cognizant of what researchersrefer to as method or methodology method is vitalPOLITICS OF EAST ASIAintroduction to the course
  18. 18. how to study change and continuity methodological issuesmethod is vital, in part, because it provides the means for supporting !(and evaluating) theoretical claims and arguments, which also !means that it provides a basis for evaluating competing !theoretical perspectives as a wholePOLITICS OF EAST ASIAintroduction to the coursesimple definition: method refers to the manner in which evidence isgathered, analyzed, and interpreted in order to test a hypothesis ortheory. in the social sciences there are numerous methods, includingthe statistical method and the comparative method
  19. 19. how to study change and continuity methodological issuesthere are many ways to discuss and analyze method; for now, keep thissimple point in mind: method is a toolas tools, some methods are clearly better suited to certain "tasks or objectives than others, but there are "also basic tools (and techniques) that can be "used effectively for a wide variety of tasks; "in our class, we will primarily use three "types of methodological tools ...POLITICS OF EAST ASIAintroduction to the course
  20. 20. how to study change and continuity methodological tools§  descriptive statistics and other quantitative data§  case-oriented comparisons§  historical analysisPOLITICS OF EAST ASIAintroduction to the coursewe will talk about each of these methodsshortly, but first a few cautionarywords about “bad method”
  21. 21. how to study change and continuity bad methodtoo often, researchers may serious mistakes because the fail to considereven the most basic methodological principlesthe example used in the reading is a “direct comparison” of Japan, SouthKorea, and Taiwan (like comparing three oranges) wherein "the researchers first notes that all three countries achieved "comparable economic success, and then finds another "similarity among the three cases and concludes, “Aha! "I have found the common reason for their economic success!”POLITICS OF EAST ASIAintroduction to the course
  22. 22. how to study change and continuity bad methodbut what’s wrong with the foregoing example? what’s ! wrong with comparing three “oranges”?POLITICS OF EAST ASIAintroduction to the coursebasic problem: when comparing threeessentially similar cases, where there areno significant differences, there is no way tocontrol for a range of variables // considerthe following table ...
  23. 23. flawed MSS design: comparing Japan, South Korea, and Taiwan
  24. 24. flawed MSS design: comparing Japan, South Korea, and TaiwanQuestions: based on the information in the table, how are the countries similar? "what conclusions, if any, can we draw from the similarities?
  25. 25. how to study change and continuity bad method: ahistorical analysis another example of “bad method” is ! ahistorical analysis: what does this mean, !and why is it a problem?POLITICS OF EAST ASIAintroduction to the coursehint: consider the example of Confucianismcited in the readings
  26. 26. how to study change and continuity back to methodological tools§  descriptive statistics and other quantitative data§  case-oriented comparisons§  historical analysisPOLITICS OF EAST ASIAintroduction to the course
  27. 27. how to study change and continuity methodological tools: descriptive statisticsdescriptive statistics are typically statistics or figures thatsummarize a data set for an entire population of subjects—e.g. GDP, per capita GDP, export growth, fertility rate,educational level, infant mortality, and so on: descriptivestatistics allow us to make broad and relative !comparisons about countries, industries, !whole societies, and so on POLITICS OF EAST ASIAintroduction to the course
  28. 28. how to study change and continuity methodological tools: descriptive statisticsdescriptive statistics are very useful, but they are also verylimited—they can allow us, as noted in the previous slide, tomake relative comparisons between subjects, and they canalso allow us to see basic correlations. but they do not allow!for causal conclusions to be drawn; in addition,!descriptive statistics are reductionist and!can be easily misused or misinterpretedPOLITICS OF EAST ASIAintroduction to the course
  29. 29. how to study change and continuity methodological tools: case-oriented comparisonscase-oriented analyses are holistic comparisons of events,decisions, institutions, policies, outcomes and the like; in acase-oriented analysis, the researcher examines myriadfactors and their interactions in detail and depth. this is tool!that allows researchers to deal with complex!causalityPOLITICS OF EAST ASIAintroduction to the course
  30. 30. how to study change and continuity methodological tools: case-oriented comparisonscase-oriented comparisons add a comparative element:this means that we examine our cases in relation to othercases as way for us to better assess our arguments,conclusions, or claims POLITICS OF EAST ASIAintroduction to the course
  31. 31. how to study change and continuity methodological tools: historical analysishistorical analysis begins with the premise that whathappened in the past continues to affect what happenstoday. Even more, how and when things happened in thepast are often key to explaining contemporary outcomes andprocesses. historical analysis is an important!part of case-oriented analysis. POLITICS OF EAST ASIAintroduction to the course
  32. 32. how to study change and continuity summing upthe first chapter covers a lot of fairly abstract material, !but it is also foundational material and an essential basis !for the rest of this course—for now, though, just try to !keep the basic theoretical and methodological issues !in mind as we proceedPOLITICS OF EAST ASIAintroduction to the course
  33. 33. SESSION 2From Poverty to Prosperity in One Generation:Explaining the East Asian “Miracle”
  34. 34. explaining the East Asian miraclein our first class meeting, we discussed the reasons for rapideconomic growth and industrialization in East Asia—we willcontinue that discussion today, except now !the focus will be on the dominant theoretical !arguments (i.e., the competing !perspectives) that have been !advanced: the best place to !begin, perhaps, is with liberal 
explanationsPOLITICS OF EAST ASIAfrom poverty to prosperity
  35. 35. liberal explanationsall liberal explanations begin with a focus on individuals !and on the ________________ some questionswhat is the free market and what makes is"so special? how does the market explain"East Asia’s phenomenal record of "economic growth? (just consider these"questions for now)POLITICS OF EAST ASIAfrom poverty to prosperityfree market
  36. 36. Consider this defense of the free market by Milton Friedman, one of the strongest"advocates of free markets until his death in 2006
  37. 37. liberal explanationsfrom the foregoing video, it is clear that the free market is a marketin which there is minimal interference by non-market !actors, especially the statea free market is premised on voluntary and unrestricted "exchanges between buyers and sellers; when this "happens, there is always mutual gain (that is, both "buyers and sellers benefit), and in an economy in"which a free market prevails, there is always"strong and consistent economic growthPOLITICS OF EAST ASIAfrom poverty to prosperity
  38. 38. liberal explanationsthus, for East Asia, the basic liberal explanation is very clear, andvery simple: East Asian productivity is primarily product !of market forces and, at most, very limited 
government intervention (designed to improve!the macro-economic environmentto buttress this argument, liberal economists point"to the former Soviet Union, and to all economies"that relied on central (state) planning, including "North Korea and China prior to 1979 ... POLITICS OF EAST ASIAfrom poverty to prosperity
  39. 39. liberal explanationswhat is the story with centrally planned economies?consider the following table ...POLITICS OF EAST ASIAfrom poverty to prosperity
  40. 40. questions"what does thistable tell us aboutthe nature ofeconomic growthin plannedeconomies? whydid the SovietUnion do so wellfor a while, and"then suddenlydrop off? (we alsosimilar patterns inother CPEs)
  41. 41. PaulKrugman liberal explanationsinterestingly, a one famous liberal economist, Paul Krugman, arguedthat the East Asian miracle was no miracle at all. instead, !he argued that Japan, South Korea, Taiwan (as well as !Singapore and Hong Kong) were basically following !the Soviet Model—his argument centered on the issue !of total factor productivity (TFP), which refers to the !portion of output or production in an economy not !caused by inputs (such as labor, land, and capital) POLITICS OF EAST ASIAfrom poverty to prosperityKrugman was skeptical because states inEast Asia were highly interventionist ...
  42. 42. liberal explanationsKrugman was, it turned out, wrong but his reasoning was impeccablyliberal, which brings us back to a key point: whatever their liberal stripe,liberal economists agree that free markets and private enterprise—andnot non-market actors, such as the state—are the fulcrum of a growingand dynamic economyMore specifically, the liberal view would posit that East Asia’s economic risewas the product of a basic set of interconnected economic policies, including: POLITICS OF EAST ASIAfrom poverty to prosperity
  43. 43. summary of key factors§  Integration of the domestic economies into international markets§  Lowering or elimination of trade barriers "and other forms of protectionism§  Relatively limited state or government "intervention in economic affairs)§  Elimination of reduction of barriers to market entry§  The creation of stable macroeconomic environmentPOLITICS OF EAST ASIAfrom poverty to prosperity
  44. 44. liberal explanationsdespite broad agreement, is it the case "that liberal economists agree on everything?the short answer, of course, is “no”: but"this raises the question ... POLITICS OF EAST ASIAfrom poverty to prosperity
  45. 45. liberal explanationson what [major] points do liberal disagree?POLITICS OF EAST ASIAfrom poverty to prosperitydisagreements center on two issues: (1) whethermarkets are self-correcting, and (2) whethermarket failures exist
  46. 46. liberal disagreements: self-correctionfor our purposes, self-correction is the less important of the twodisagreements, but it is still important to understand the issuethe basic issue revolves around the question: “what happens when a marketexperiences difficulties, such as a downturn in consumption or investment?”POLITICS OF EAST ASIAfrom poverty to prosperityDon’t do anything!Just let the workwork on its own. Intime, equilibrium willbe restoredThat’s not always thecase.—the marketsometimes needs a pushto restore equilibriummore efficiently  
  47. 47. the self-correction debate is represented in the debate between "free marketers, such as Friedman, and followers of John Maynard"Keynes. This video (indirectly) addresses the issue of "self-correction
  48. 48. liberal disagreements: market failurethe more important issue is market failure: among economists, there issome agreement that the free operation of the market cannot alwaysproduce efficient outcomes; this is especially true in economies that are inthe early stages of capitalist industrializationTypes and examples of market failures: (1) negative externalities"(pollution); (2) positive externalities (public education); (3)"imperfect information/information asymmetry; (4) public"goods; (5) monopolistic conditions; and (6) factor "immobilityPOLITICS OF EAST ASIAfrom poverty to prosperity
  49. 49. liberal disagreements: market failurethe important is this: if market failures exist, then government or stateintervention in the economy is theoretically justified: this has led to theemergence of what might be called “market-friendly” liberal argumentsinterestingly, one of these market-friendly arguments comes from a bastion ofliberal economic theory, the World Bank • the Bank has recognized,"in particular, that states can and do play important, even"essential roles, in complementing markets in situations"where the market alone is insufficient to create"optimal results—the example used in the reading"focuses on “information asymmetry”POLITICS OF EAST ASIAfrom poverty to prosperity
  50. 50. liberal disagreements: market failurethe Bank not only argued that states can step in to!help correct market failures, but also that states!could, to a limited (but important) extent, substitute!for the invisible hand of the market by, for example,!“creating contests”in East Asia, states developed “institutional structures "in which firms competed for valued economic prizes, "such as access to credit”; the state also prohibited "monopolies, and set up relatively transparent criteria "for “winning”—such as meeting export targets. POLITICS OF EAST ASIAfrom poverty to prosperity
  51. 51. this short video provides an explanation of the invisible hand, which is strongly linkedto competition (competition in the market, in others words, creates the incentive forproducers to constantly improve their products and to sell them at relatively low costs
  52. 52. liberal disagreements: market failurethe World Bank’s argument was almost heresy to!many (all?) staunch free-marketers, but in a sense,!the Bank had no choice: the facts on the ground—!the reality of state intervention combined with!fantastic economic growth rates—made a mockery!of the “aggressively deductive” free market (or !“market-only) explanations POLITICS OF EAST ASIAfrom poverty to prosperitya method-check: what’s the methodologicalproblem with “market-only” explanations?
  53. 53. liberal disagreements: export-led growthone more point: all liberal explanations put !a great deal of emphasis on East Asia’s !strategy of export-oriented industrialization!(EOI) policybut what’s the significance of an export-"oriented industrialization policy? that is, why"do liberals think EOI is so important?POLITICS OF EAST ASIAfrom poverty to prosperity
  54. 54. summing up: lessons learnedso what have we learned from our admittedly cursory "discussion of the liberal argument? one clear lesson ... markets matterPOLITICS OF EAST ASIAfrom poverty to prosperity
  55. 55. summing up: lessons learnedso what have we learned from our admittedly cursory "discussion of the liberal argument? we also learned that, to some liberals, the "market and the state are not always in "opposition, but can work in tandem with "one another: this offers a nice segue to a"discussion of our next competing"perspective ... POLITICS OF EAST ASIAfrom poverty to prosperity
  56. 56. next up ... statist or institutionalist " argumentsPOLITICS OF EAST ASIAfrom poverty to prosperity
  57. 57. the state and economic growthfirst, a quick note on terminology ... when we discuss approaches that focus on the state, theshorthand term “statist perspective” is used; in addition, scholars willalso refer to “institutionalism” or “rational institutionalism”; these arenot the same terms, but for our purposes, we can use them more or lessinterchangeably (the latter two are more general—keep in mind that thestate is a type of institution) POLITICS OF EAST ASIAfrom poverty to prosperity
  58. 58. the state and economic growth and now a question ... how does the statist and liberal perspectives overlap," and how do they differ from one another?POLITICS OF EAST ASIAfrom poverty to prosperity
  59. 59. the state and economic growthpoints of agreement between liberal and statist approaches  §  markets are essential to sustained and dynamic economic growth§  integration into international markets (i.e., export-oriented " Industrialization) is important§  economic autarchy, central planning, ISI (by itself) are all" prescriptions for economic failurePOLITICS OF EAST ASIAfrom poverty to prosperity
  60. 60. the state and economic growthpoints of disagreement between liberal and statistapproaches  §  economics and politics are inseparable§  state action is important even in fully industrialized economies§  not all states are equally capable: the nature of states " is a critical variable§  understanding the nature of states requires " historical analysisPOLITICS OF EAST ASIAfrom poverty to prosperity
  61. 61. the state and economic growthto get a more concrete sense of the statist argument, let’s !take a video detour ...the following documentary was produced in 1991 at the height ofJapan’s economic rise: it examines Japan’s state-led strategy ofeconomic development and argues that it has been the key to thatcountry’s successthings, of course, have changed "since 1991, but the video’s main "message remains instructive …POLITICS OF EAST ASIAfrom poverty to prosperity
  62. 62. losing the war with Japanviewing questions§  what assumptions does the film make !about Japan’s economic success?§  how does the film reflect the!statist perspective?§  with 20-20 hindsight, what can we say !about the accuracy of the documentary?POLITICS OF EAST ASIAfrom poverty to prosperity
  63. 63. the state and economic growth a basic pointjust as the liberal perspective shows us that markets matter, we canbegin our examination of the state by asserting, quite simply, that ...POLITICS OF EAST ASIAfrom poverty to prosperitystates matter** but not all states are created equal or are equally capable
  64. 64. liberal  developmental  authoritarian  Keynesian  the state and economic growththe basic point from the preceding slide, !raises another question ...what type of state matters?POLITICS OF EAST ASIAfrom poverty to prosperitythis is a key question, and one thatdifferentiates the statist from theliberal view ... how so?
  65. 65. liberal  developmental  authoritarian  Keynesian  the state and economic growthwhat type of state matters?for now, let’s just say that, in the statist"perspective, differences among states"are a focal point of analysis and"theoretical attentionPOLITICS OF EAST ASIAfrom poverty to prosperity
  66. 66. the state and economic growthto better understand statist arguments—particularly in termsof how they differ from more “flexible” liberal arguments—it isimportant to look to deep causes, rather than only proximateand intermediate causeswhat are the distinctions among these "three types of causes?POLITICS OF EAST ASIAfrom poverty to prosperity

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