Stephan Haggard

Sylvia Maxfield

Chung H. Lee

Ten original essays examine the political and institutional factors that influence the initiation and efficiency of preferential credit policies in Korea, Taiwan, Thailand, Indonesia, the Philippines, Chile, Mexico, and Brazil.

The Politics of Finance in Developing Countries

Ben Ross Schneider

Much of the debate about development in the past decade pitted proponents of unfettered markets against advocates of developmental states. Yet, in many developing countries what best explains variations in economic performance is not markets or states but rather the character of relations between business and government. The studies in Business and the State in Developing Countries identify a range of close, collaborative relations between bureaucrats and capitalists that enhance elements of economic performance and defy conventional expectations that such relations lead ineluctably to rent-seeking, corruption, and collusion. All based on extensive field research, the essays contrast collaborative and collusive relations in a wide range of developing countries, mostly in Latin America and Asia, and isolate the conditions under which collaboration is most likely to emerge and survive. The contributors highlight the crucial roles played by capable bureaucracies and strong business associations.

Business and the State in Developing Countries

Much of the current debate about development has pitted proponents of unfettered markets against advocates of developmental states. Yet, often what best explains variations in economic performance among developing countries is not markets or states but rather the character of relations between business and government. The contributors to Business and the State in Developing Countries identify a range of close, collaborative relations between bureaucrats and capitalists which enhance elements of economic performance and defy conventional expectations that such relations lead ineluctably to rent-seeking, corruption, and collusion. All based on extensive field research, the essays contrast collaborative and collusive relations in a wide range of developing countries, most of them in Latin America and Asia, and isolate the conditions under which collaboration is most likely to emerge and survive. The contributors highlight the crucial roles played by capable bureaucracies and strong business associations.

Central banks can shape economic growth, affect income distribution, influence a country's foreign relations, and determine the extent of its democracy. While there is considerable literature on the political economy of central banking in OECD countries, this is the first book-length study focused on central banking in emerging market countries. Surveying the dramatic worldwide trend toward increased central bank independence in the 1990s, the book argues that global forces must be at work. These forces, the book contends, center on the character of international financial intermediation. Going beyond an explanation of central bank independence, Sylvia Maxfield posits a general framework for analyzing the impact of different types of international capital flows on the politics of economic policymaking in developing countries. The book suggests that central bank independence in emerging market countries does not spring from law but rather from politics. As long as politicians value them, central banks will enjoy independence. Central banks are most likely to be independent in developing countries when politicians desire international creditworthiness. Historical analyses of central banks in Brazil, Mexico, South Korea, and Thailand, and quantitative analyses of a larger sample of developing countries corroborate this investor signaling explanation of broad trends in central bank status.

Sylvia Maxfield

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