Customer Reviews

Crony Capitalism: Corruption and Development in South Korea and the Philippines (Cambridge Studies in Comparative Politics)

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This book takes on an important topic: the relationship between corruption and economic development, focusing on two countries, South Korea and the Philippines. It began, apparently some years ago, as the author's dissertation. As a consequence, most of the analysis and references apply to events in the past. It is much better on Korea than it is on the Philippines. The book argues that the outcomes in the Philippines and Korea are best understood as a competition between the political and economic elite for the rents generated by the economy. Since the competition between the political and economic elite was more balanced in Korea, corruption there did not spiral out of control as it did in the Philippines. A chapter attempting to analyze these countries rather differing experiences in the 1997 Asian financial crisis (the Philippines fared better than Korea) in terms of this framework seems appended to any already finished product. The book does make the important point that simply invoking the slogan "developmental state" is an inadequate explanation of these two countries differing histories.

Slim and powerful, Crony Capitalism posits that conventional wisdom about the Philippines and South Korea may be wrong. Standard developmental narratives contend Korea's rapid growth, led by Park's regime, followed directly from a strong, reformist state; on the flip side, the Philippines experienced lackluster growth under a weak state that bred deleterious corruption and hindered development. Crony Capitalism maintains that the weak state-strong state dichotomy more than misses the point--it is simply wrong. In fact political economic similarities, particularly the centrality of corruption, between the two nations are eerie. What differed, however, was industrial organization of the economy and the impending threat face by South Korea by their neighbor's to the North. With descriptive statistics and an analytical framework inspired from institutional economics, Kang tells an intersting, fresh story that goes beyond normal heuristic explanations of long run development.

Both nations were mired in colonialism and dominated by the centrality of family social units. Moreover, both nations face prolonged periods of martial law where elite actors consolidated power. Whether we speak of Marcos' regime or Park's, corruption - or as Kang refers to it, "money politics" - dominated the political economy of either country. Bribes and "donations" required a deep relationship between the authoritarian states and capital. However, Kang contends that in the case of Korea both the Park regime and the powerful Chaebol were locked in a mutual reinforcing agreement - both relied on one another, particularly as the state was the primary lender to the indebted oligopolies. While many contend that the Park regime was marked by technocrats who rationalized state investment in the industrial sector, Kang shows clearly at this was a myth. Capital flowed to the largest firms capable of reciprocating with the right political capital.

In the case of the Philippines, a fragmented industrial sector dominated by the elite clans meant industrial interests were not cohesive. Clan rivalries divided the interests of the business class. Accordingly, the Marcos state divided and conquered the clans, and capital flowed to those willing to comply to the dictators' will. However, the preconditions for a technocratic regime were there -- Marcos stacked officer with the most well educated technocrats of any nation. However, Kang shows that his was merely a facade to inspire foreign investment and international loans that evaporated into the corrupt static. Unlike Korea, the fragmented state of industrial organization meant that the relationship between state and capital was not mutually self-enforcing - Marcos' ends steered the economy.

Kang tells a convincing story, and there is something here for political economists, regional scholars, development theorists. My only criticisms are that the book shines most in highlighting national similarities with nice statistical stories, rather than nailing down the mechanisms that drove the divergent paths. While the background research is surely extensive, most is not primary source (a weak criticism). Regardless, this slim book poses an interesting thesis. Importantly, this work places industrial organization at the center of the the political economic story of these two Asian countries.

The product arrived pretty quickly, and the book was in excellent, brand-new condition. No problems from this seller.