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31. Rent(s) Asunder: Sectoral Rent Extraction Possibilities and Bribery by Multinational Corporations

Author:
Nathan Jensen, Edmund Malesky, and Dimitar Gueorgiev
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
We argue that openness to foreign investment can have differential effects on corruption, even within the same country and under the exact same domestic institutions over time. Our theoretical approach departs from standard political economy by attributing corruption motives to firms as well as officials. Rather than interpreting bribes solely as a coercive “tax” imposed on business activities, we allow for the possibility that firms may be complicit in using bribes to enter protected sectors. Thus, we expect variation in bribe propensity across sectors according to expected profitability which we proxy with investment restrictions. Specifically, we argue that foreign investment will not be associated with corruption in sectors with fewer restrictions and more competition, but will increase dramatically as firms seek to enter restricted and uncompetitive sectors that offer higher rents. We test this effect using a list experiment, a technique drawn from applied psychology, embedded in a nationally representative survey of 10,000 foreign and domestic businesses in Vietnam. Our findings show that the impact of domestic reforms and economic openness on corruption is conditional on polices that restrict competition by limiting entry into the sector.
Topic:
Development, Industrial Policy, International Trade and Finance, Political Economy, and Foreign Direct Investment
Political Geography:
Israel and Vietnam

32. US-Vietnam: New Strategic Partners Begin Tough Trade Talks

Author:
Raymond Burghardt
Publication Date:
02-2010
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Vietnamese and Americans joined together in Hanoi last December for a happy celebration, commemorating the tenth anniversary of the entrance into force of the US-Vietnam Bilateral Trade Agreement signed in December, 2001. The gathering of current and former trade negotiators, diplomats, and business leaders exchanged witty anecdotes about who had been the toughest negotiator. However, the main focus for both American and Vietnamese participants was on the positive prospects for future US-Vietnam relations across the spectrum of trade and strategic common interests.
Topic:
Foreign Policy, Cold War, International Trade and Finance, and Bilateral Relations
Political Geography:
United States, America, Vietnam, and Southeast Asia

33. North Korean Shipping: A Potential for WMD Proliferation?

Author:
Hazel Smith
Publication Date:
02-2009
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
The possibility that North Korean ships may be smuggling weapons of mass destruction is a matter of intense concern in the Asia Pacific region and beyond. The few reported incidents of North Korean ships involved in WMD transport are ambiguous; some ships have been engaged in legal weapons trade and some carried "dual-use" goods suitable for use in nonmilitary applications, like agriculture. Ownership of the North Korean merchant fleet is largely private and highly fragmented; most of its ships are small, old, and in poor repair, and are often subject to rigorous scrutiny in foreign ports. The inability of the government to effectively regulate the low-cost, substandard shipping industry creates the risk and incentives to smuggle goods, including WMD. Anti-proliferation efforts should abandon the divisive and unsuccessful Proliferation Security Initiative and concentrate on negotiating North Korea's entry into international arms control treaties, maintain stringent port controls, and negotiate technical assistance to reduce the vulnerability of the North Korean shipping industry.
Topic:
International Trade and Finance, Nuclear Weapons, and Weapons of Mass Destruction
Political Geography:
North Korea

34. The Global Economic Crisis and Its Implications for Asian Economic Cooperation

Author:
Michael G. Plummer
Publication Date:
10-2009
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
The economic crisis of 2008–09 is the second major crisis in just over a decade that Asia has endured. Unlike the Asian crisis of 1997–98, however, the current crisis originated mainly in the West. Asia's excessive reliance on net exports as the principal driver of economic growth since the 1997–98 crisis rendered it especially vulnerable to external shocks, and most Asian countries have paid dearly. The more open the economy, the more vulnerable it is to such shocks. The newly industrialized Asian economies (Singapore, Hong Kong, South Korea, and Taiwan), which are among the most open and dynamic in the world, are expected to contract by about 6 percent in 2009.
Topic:
Emerging Markets, International Trade and Finance, Regional Cooperation, Global Recession, and Financial Crisis
Political Geography:
Taiwan, Asia, South Korea, Singapore, and Hong Kong

35. A New Geography of Knowledge in the Electronics Industry? Asia\'s Role in Global Innovation Networks

Author:
Dieter Ernst
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Political debates about globalization are focused on offshore outsourcing of manufacturing and services. But these debates neglect an important change in the geography of knowledge––the emergence of global innovation networks (GINs) that integrate dispersed engineering, product development, and research activities across geographic borders.
Topic:
Emerging Markets, Globalization, Industrial Policy, International Trade and Finance, and Science and Technology
Political Geography:
Asia

36. Multitrack Integration in East Asian Trade: Noodle Bowl or Matrix?

Author:
Peter A. Petri
Publication Date:
10-2008
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
East Asian trade agreements are often described as a complicated "noodle bowl," which shows links in the region as a snarled, overlapping and intertwined mass. But this is a misleading representation--Asia's regional agreements may in fact be creating an order of a different sort, building the foundations for a stronger regional trading system. Asian trade arrangements can be more constructively seen in terms of a trade agreements matrix, in which multiple negotiations produce an orderly progression of agreements to liberalize all potential bilateral relationships and move the region toward a coherent system of freer trade. The various approaches to deeper economic integration--regional arrangements, trans-Pacific agreements, and global engagement--are complementary paths that should eventually lead to an open global trading system. East Asia is of growing importance in the global marketplace, and adopting an aggressive multitrack strategy--as the region appears to be doing--may be the fastest route toward a new global framework.
Topic:
International Trade and Finance and Treaties and Agreements
Political Geography:
Israel and Asia

37. Entrepreneurship and Political Guanxi Networks in China's Private Sector

Author:
Christopher A. McNally, Hong Guo, and Guangwei Hu
Publication Date:
08-2007
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
Since the mid-1990s the Chinese government has rapidly liberalized the environment facing domestic private firms. As a consequence, many private firms have clarified their ownership relations and acquired stronger organizational boundaries. However, despite this formalization of private sector institutions, informal guanxi networks remain a key component in firm success. Most significant among these guanxi networks are political networks that connect private entrepreneurs with actors in China's political sphere.
Topic:
Economics, International Trade and Finance, and Markets
Political Geography:
China and Israel

38. China and the Depreciating U.S. Dollar

Author:
Richard C. K. Burdekin
Publication Date:
01-2006
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Over the past five years, U.S. exports to China have been dwarfed by imports from that country, with the resulting trade deficit igniting a bout of China bashing reminiscent of the Japan bashing of the 1980s. A major culprit in the trade imbalance, according to many U.S. analysts and policymakers, is China's currency: the renminbi, they say, is too cheap relative to the dollar. Some are calling for high tariffs on Chinese goods or for further exchange-rate adjustment that would revalue the renminbi significantly upward, making Chinese goods less competitive. But with just 10.4 percent of total U.S. trade attributed to China in the first half of 2005, it is unrealistic that any renminbi exchange-rate adjustment could rein in the burgeoning U.S. trade deficit. And if the adjustment were drastic the United States could be the big loser: driving China out of the market for U.S. treasuries would most likely have calamitous consequences, not only for the dollar but for U.S. credit markets and for the U.S. economy in general.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, Asia, and North America

39. What Motivates Regional Financial Cooperation in East Asia Today?

Author:
Jennifer Amyx
Publication Date:
02-2005
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Regional financial cooperation in East Asia is proceeding with unprecedented intensity. Latest developments include two Asian Bond Funds, created by the regional central bankers group, and an Asian Bond Markets Initiative launched by the finance ministers of the Association of South East Asian Nations member states plus China, Japan, and South Korea (or ASEAN+3). Some observers continue to attribute such cooperation to sharpened antagonism between East Asia and the West since the Asian financial crisis of 1997–98. But this view overlooks a key internal driver: ChinaÂ's shift to a more proactive stance toward regional cooperation. Far from demonstrating an antagonism toward market-based financial systems, ASEAN+3 members are embracing more liberal rules for economic interaction in their creation of regional bond funds and markets. Financial cooperation in East Asia is today motivated by factors that differ considerably from those observed in the immediate aftermath of the Asian financial crisis—and the implications extend beyond East Asia.
Topic:
International Relations, International Trade and Finance, and Regional Cooperation
Political Geography:
Israel

40. Banking Crises in East Asia: The Price Tag of Liberalization?

Author:
Ilan Noy
Publication Date:
11-2005
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
The banking crises that swept through East Asia in 1997– 1998 set off dramatic recessions in the affected countries and imposed heavy costs on the domestic taxpayers. Fear of further crises prompted searches causes and early warning signs. It soon became apparent that liberalization the domestic financial sectors of the countries in crises contributed to genesis of these crises, but policymakers, regulators, and economists disagree about the reason for this. Initial scrutiny fell on unregulated international capital flows, but a comprehensive study suggests that liberalization can to financial instability either because of insufficient regulation of the financial sector or because of erosion of previously granted monopolies of existing banks. These possibilities suggest varying policy implications for the current state domestic financial systems in East Asia, including the challenges inherent opening up ChinaÂ's banking system to foreign competition as mandated in China–World Trade Organization accession agreement.
Topic:
Economics and International Trade and Finance
Political Geography:
Israel and Asia