Liquidated: US/Japan-Chinese Rivalry, Financial Crises, and Explaining Shifts in Hydropower Finance Regimes in the Mekong

The contemporary US/Japan-Chinese rivalry and tension around dam building in the Mekong region is often mistakenly seen as the US and Japan’s reactive response to recently growing Chinese diplomatic and economic influence in the region. In fact, the United States and Japan have been critical architects of institutional and financial engineering for hydropower development in the Mekong region, which predates involvement by the People’s Republic of China (PRC). The factors and dynamics involved in significant lending regime shifts away from a liberal hydropower finance regime to an export credit driven model premised on Asian economic statecraft is an understudied topic. This article fills part of this gap through a case study of evolving hydro-financing regimes in Lao PDR from the 1970s to the present. The study draws on extensive ethnographic work in Laos, Japan, Thailand, and the United States with local and external political elites, hydro-financing technocrats, and business actors and gains additional insights from analysis of primary firm, institutional, and government documents. The article finds that the role of economic crises and their impact on the relative economic power of hydropower financing regimes as well as their ideational impact on borrower regimes are significant in explaining shifting patterns in lending regime dominance.