- The Puzzle of East Asian Exceptionalism
The most notable trend in global political and economic development since the early 1980s has been the surge of political democratization and market-oriented economic reforms, first in the developing countries and then in communist states. In many instances, democratization—the institution of competitive elections and expansion of political participation—preceded radical economic reforms (macroeconomic stabilization, structural adjustment, and institutional changes). Countries that experienced this sequencing of events include Brazil, Argentina, Bolivia, Turkey, the Philippines, Poland, Hungary, the Czech Republic, and Russia. In some countries, economic reforms occurred before democratization (Chile, South Korea, Taiwan, and Thailand). In a few authoritarian and communist states, economic reforms alone took place, and there were no steps toward democracy at all (China, Vietnam, Indonesia, Mexico, and to name two far more uncertain and recent examples, Burma and Cuba). Some established Third World democracies, most notably India, Venezuela, and Costa Rica, also implemented far-reaching economic reforms. The varying outcomes that economic reforms produced in these countries have become prominent topics in the growing scholarly literature on the relationship between regime type and economic reform. Yet no study to date has established conclusively whether such a relationship exists, or whether one particular sequencing of reform works better than another.1
The failure to generalize whether one type of political regime has a greater capacity to implement tough economic reforms than another [End Page 90] mirrors the long-running but equally inconclusive debate on the relationship between regime type and economic growth.2 Many factors make such simple generalizations difficult to verify empirically; three such factors deserve special attention.
First, the concept of "political regime" is too loose to be employed as a causal variable in rigorous empirical testing. Classification of regime types is based on formal institutions rather than substantive political processes. The effectiveness of government varies enormously among countries ruled by similar political regimes. Whether democratic or authoritarian, regimes that boast competent technocratic institutions, well-insulated from societal interests and political influences, display higher degrees of governmental effectiveness than those without such institutions.3 To the extent that governmental effectiveness significantly affects the outcome of economic reforms, this regime-neutral qualitative variable can seldom be captured by quantitative data in a way precise enough to meet rigorous standards of empirical testing.
Second, research based on regime types characteristically focuses on the state while paying insufficient attention to the crucial role of entrepreneurial societal forces in pushing economic reforms from below. Without active support and aggressive "followership" from key societal groups, economic reforms rarely succeed. Third, historical circumstances in general, and initial economic and political conditions in particular, vary significantly from one reforming system to another. In view of the importance of comparative "starting points," generalizations about regime type and economic reform must be treated with extreme caution.
In the early 1990s, the severe economic recession in Russia and similar (albeit milder) difficulties in most former communist and authoritarian countries in Eastern Europe and Latin America have generated popular nostalgia for the old political order and widespread frustration with the high costs of reform. Popular disenchantment with economic reform has resulted in the electoral defeat of forces associated with such reforms in Russia, Poland, and Hungary. The rapid revival of ex-communists in most former communist countries has raised new questions about democratic governments' ability to tackle hard economic problems and about the wisdom of adopting a transition sequence that places democratization ahead of marketization.
Meanwhile, highly publicized booms associated with economic restructuring in authoritarian or communist states such as China, Vietnam, Indonesia, Mexico, Peru, and more recently Burma convey an impression of what one might call autocratic superiority—implying that placing market-oriented reforms ahead of democratization is the better alternative.
As the 1990s reach their midpoint, it is becoming clear that economic restructuring in the former communist and authoritarian countries will take a long time and encounter many as-yet-unknown obstacles. Given [End Page 91] the uncertain prospects for economic reform and democratic consolidation in these countries, we need to revisit the issue of sequencing reforms in democratizing autocracies.
Three Paths of Change
Broadly speaking, economic and political transition (i.e., the "dual...