State Power and Private Profit: the political economy of corruption in Southeast Asia

Abstract

This article reviews the extensive political and economic literature since 1990 on corruption in Indonesia, Philippines, Thailand, Malaysia and Singapore. After considering each country's individual recent history of corruption, the article comparatively analyses the relationship of corruption in these countries with, respectively, the roles of the state, the private sector and external actors, democratisation and decentralisation, and the impact of corruption on economic growth and inequality. Our conclusion is that while economic liberalisation, democratisation and centralisation of state power influence the forms of corruption and its impact on national economic performance, they are neither necessary nor sufficient for its decline.

Strategic Industrial Policy and Latecomer Development: The What, the Why and the How

“…Again the East Asian NICs seem to have been able to combine a certain amount of corruption with growth-enhancing strategies and this 'East Asian paradox' is not easily explained but among the determinants are the long-term horizon of the elite, the centralised organisation of rents, the hard budget constraints, the discipline of world market competitiveness, the relative strength of state elites, the self-financing of leading parties, and the bifurcated state with corruption concentrated in ministries and/or local level administration that are not involved in SIP (Kong, 2004;Lauridsen, 2008;Lim and Stern, 2002;Rock and Bonnett, 2004).…”

Explaining the Failure of Thailand's Anti‐corruption Regime

“…A country may register progress in one dimension of corruption while lagging or falling behind in another, or may even move ahead on both fronts concurrently. For example, Southeast Asia's rapid economic development over the last several decades is usually said to have engendered excellent conditions for both state capture and administrative corruption, the levels and extent of which have varied across countries, and even within countries over time, based on a complex set of interactions and lines of causality at different stages of the countries' development (see, for example, Khan and Jomo, 2000; Lim and Stern, 2002; Marsh et al, 1999; Quah, 1999). Countries where national wealth has generally been concentrated in a few key productive sectors have faced greater risks of powerful interests seeking to gain control over them, even while those interests have also ‘invested’ some of their gains in a bid to sustain and entrench their positions.…”

“…Political parties, in particular, came to represent the interests of a powerful new extra‐bureaucratic economic and political elite — mostly Sino‐Thai businessmen and the so‐called chao poh , or provincial, mafia‐like bosses. The bureaucratic and military elites now had to compete with civilian politicians (Lim and Stern, 2002; Ockey, 1993; Pasuk and Sungsidh, 1994). This gradual democratization of Thailand, culminating in the establishment of civilian government in 1988, not only increased the number of legitimate political actors in the country's political system, but also chipped away at the ability of the bureaucracy to keep rents for members of its own group.…”

Buying an Income: The Market for Civil Service Positions in Indonesia

“…In China as well as in Vietnam, collaborative corruption has become more prevalent under decentralization and privatization reforms (Gainsborough 2003). Business enterprises also play a crucial role in corruption, and the interdependence of political regimes and business is typically strong in Asian countries (Lim and Stern 2002). Collective corruption is based on collaboration among groups of power-holders and is utilized for pursuing private gains.…”