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Japan's remarkable postwar growth spurt in the 1960s would not have been possible without Japan's alliance with the United States. Policy makers, political scientists, economists, historians, and journalists on both sides of the Pacific have made this claim, but no study has yet tested it with modern statistical methods. In this article, we compare the economic growth trajectories of Japan and a statistically constructed “synthetic” Japan, which had a similar profile until the late 1950s but did not experience the consolidation of the US–Japan alliance, a process that began in 1958 and culminated with the signing of a formal defense pact in January 1960. We find that Japan's per capita gross domestic product (GDP) grew much faster than the synthetic Japan's from 1958 to 1968. We substantiate these results with in-depth historical analyses on how the United States facilitated Japan's economic miracle.
Reciprocal trade agreements (RTAs) have proliferated rapidly in Asia in recent years, an unprecedented phenomenon in a region in which state-led institution-building efforts were largely unsuccessful during the Cold War years. In this article, we investigate the qualitative provisions of RTAs in Asia, focusing on agreements that are professedly geared toward trade liberalization through reciprocal exchanges of trade concessions. We build on the concept of credible commitment—that states “tie their hands” through international agreements and thus signal strong commitment to trade liberalization. We argue that a broad range of agreement provisions will affect an RTA's ability to achieve its primary objective: trade liberalization. We present a coding scheme that measures the strength of a wide variety of provisions in the legal texts of RTAs. Using quantitative analysis, we analyze the impact of various components of Asia's RTAs on participants' trade flows.
Concepts of regionalization and regionalism have dominated discussions of emerging global orders. With the rise of the European Union (EU), scholars have begun to look for similar multilaterally negotiated regional organizations in the Asia-Pacific region.
Does foreign direct investment (FDI) promote or hinder good governance in a host state? In this article, I analyze the effects of FDI on subnational-level corruption across 63 provinces in Vietnam and find that FDI has both promoted and hindered control of corruption. Initially, FDI creates resources and incentives to improve governance and reduce corruption for early winner provinces. Yet, once FDI begins to pour in, different dynamics start to take effect. While the resources and incentives accrued to FDI-recipient provinces become less effective in further curbing corruption as more FDI flows in, FDI provides leaders of those provinces with growing opportunities and increased abilities to seek and pursue rents, leading to a prevalence of corruption. Using both qualitative and quantitative data, I find strong evidence that the control of corruption is weakest at the extremes: in provinces with the least and the most FDI.
Are preferential trade agreements (PTAs) in the Asia-Pacific region merely a political phenomenon with no economic basis, as some critics say? I challenge this interpretation; in this article I present an explanatory model based on intra-industry trade to indicate what economic interests should drive Japanese and South Korean PTAs with ASEAN partners, and derive specific predictions. An analysis of the actual tariff barrier elimination in the agreements suggests important, but highly specific, economic benefits. First, preference margins are substantively greater for intra-industry trade, and second, intra-industry trade is much less likely to be excluded from tariff reductions when imported into Japan or South Korea. This indicates that PTAs help firms specialize their production throughout the region, and provides an economic rationale for these agreements. A qualitative case study of the Japan-Malaysia PTA and a statistical analysis of tariff liberalization in the PTAs of Japan and South Korea with the ASEAN countries support this view.
Over the past 30 years, Southeast Asia has experienced rapid growth in intra-regional economic activity, but despite the remarkable diminution in the frequency and intensity of military conflict and crises, it has not been free of interstate disputes, such as maritime disputes. However, the struggle against maritime crime activities such as maritime piracy is a priority for all countries of the region, as well as one of the unavoidable prerequisites for the achievement of the regional economic security. This research note focuses on the impact of maritime piracy on the Southeast Asian countries’ trade. Bilateral trade flows among the Southeast Asian countries over the 1994 to 2013 period are used to estimate an augmented gravity model that includes various measures of maritime crime activities. The purpose is to find the evidence to indicate how maritime piracy has affected the volume of intra-regional trade.
During the global commodities boom Indonesia, like many resource-rich countries, introduced an increasing number of nationalist policy interventions. However, the state has intervened assertively in some sectors and only passively in others. In Indonesia's mining sector, interventions that compel foreign divestment received widespread support from politicians and domestic industry; yet similar proposals to limit foreign investment in the strategic agribusiness sector have largely failed. This article brings the literature on resource nationalism into conversation with studies of business–state relations, in order to understand why nationalist mobilization met with more success in Indonesia's mining sector than in agribusiness. It argues that ownership structures constitute the source of this variation. Uniquely integrated patterns of domestic and foreign ownership in the strategic palm oil sub-sector constrained lawmakers’ nationalist agenda. Such constraints were less formidable in Indonesia's mining sector, where foreign capital is more easily differentiated, and concentrated in a sub-sector that contributes less overall to the Indonesian economy.
In this article I draw on the two-level game approach to analyze the influence of domestic politics on US-China trade disputes in alternative energy, especially in solar energy. I suggest that the difficulty Washington faces in getting China to address market access barriers in alternative energy needs to be viewed in light of both the coalitional dynamics in the United States resulting from the specific bilateral trade and investment relationship in this sector and Beijing's willingness to use industrial policy to foster economic competitiveness in nascent industries. Specifically, as China occupies the middle of the supply chain in the solar industry, both downstream users of low-cost Chinese imports and exporters of upstream products to China have voiced strong concerns about US trade action. Such domestic opposition, coupled with the importance of industrial policy for defending the country's long-term interests in a “strategic emerging” sector such as alternative energy, substantially constrains Washington's ability to influence Chinese policies.