Two Crises, Different Outcomes: East Asia and Global Finance.

• Author: Lai, Jikon
• Position: Book review

Two Crises, Different Outcomes: East Asia and Global Finance. Edited by T.J. Pempel and Keichi Tsunekawa. Ithaca, New York: Cornell University Press, 2015. Hardcover: 280pp.

As the two most significant financial crises to have hit the global economy in recent years, comparisons between the Asian Financial Crisis (AFC) of 1997-98 and the Global Financial Crisis (GFC) of 2008-9 were to be expected, not least by scholars of East Asia. The editors of this volume--two renowned and long-standing observers of the region--approached this task with two key questions: first, why did East Asian economies fare so differently in the two crises?; and second, to what extent is East Asia now on the brink of another economic "miracle" or at least sustained economic growth, after having weathered both crises so admirably?

On the first question, the general observation emerging from the volume, as summarized by its editors, is that the collision between national developmental strategies and the forces of global finance produced varying outcomes in the two crises. In the AFC, the developmental strategies of the East Asian economies left them vulnerable to global capital movements. Subsequent reform measures and conservative regulatory approaches to financial sectors in the region, which retained core elements of their existing developmental strategies, contributed to the "resilience" of these economies during the GFC. However, as these economies were deeply dependent on Western markets for their exports, they suffered on the trade front, when the economies of the crisis-hit Western countries contracted, but rebounded rapidly by 2010-11. On the second question, the volume on the whole expresses a measure of optimism on the region's future prospects, bearing in mind the "dangers of excessively upbeat predictive hubris" (p. 16), and, more importantly, highlights a number of existing challenges that confront economies in the region. Indeed, the rich and complex observations and analyses on the latter alone should draw readers' attention to this volume.

The book opens with two introductory chapters that sketch the context of the debate to which the volume speaks. T.J. Pempel's chapter in this section deftly weaves Asia's experience through both the AFC and GFC to demonstrate how changes in national-level policies interacted with developments in global finance to produce variation in outcomes, thus setting the scene for subsequent chapters to fill with detailed...