Transparency and Authoritarian Rule in Southeast Asia

Singapore and Malaysia

Garry Rodan

• Publisher: Taylor & Francis
• Year: 2004
• eBook ISBN: 9781134308101
• Edition: 1
• Topic: History
• Subtopic: Asian History
• Index: History

In Transparency and Authoritarian Rule in Southeast Asia, Rodan rejects the notion that the 1997-98 Asian economic crisis was further evidence that ultimately capitalism can only develop within liberal social and political institutions, and that new technology necessarily undermines authoritarian control. Instead, Rodan argues that in Singapore and Malaysia external pressures for transparency reform were, and are, in many respects, being met without serious compromise to authoritarian rule or the sanctioning of media freedom.

1
INFORMATION CONTROL AND AUTHORITARIAN RULE IN EAST AND SOUTHEAST ASIA
Under challenge?

Introduction

The 1997–98 Asian economic crisis raised serious questions for the remaining authoritarian regimes in East and Southeast Asia,¹ not least the hitherto outstanding economic success stories of Singapore and Malaysia. Could leaders presiding over economies so heavily dependent on international capital investment ignore the new mantra among multilateral financial institutions and business commentators about the virtues of ‘transparency’? Would these leaders be capable of, or interested in, responding? Was it possible to embark on a selective reform agenda – one that steered well clear of political openness and scrutiny but delivered on some improvements to corporate disclosures and other limited forms of transparency? Or would any accommodation compromise the integrity of authoritarian power relationships and set in train pressures and dynamics towards more comprehensive reforms, including much greater media freedom? And just how vital was transparency – however defined – to the actual decisions of investors? Was it really a universal functional requirement for economic recovery and advancement, or was its importance being overplayed in reaction to the dramatic events of the crisis?

Authoritarian regimes are characterised by a concentration of power and the obstruction of serious political competition with, or scrutiny of, that power. The free flow of ideas and information is therefore an anathema to authoritarian rule. Almost by definition, authoritarian regimes involve censorship. This doesn’t mean, however, that mass media and other publicly available sources of information and analysis are necessarily discouraged. On the contrary, sophisticated authoritarian regimes harness these to propagate their own messages and to promote economic objectives. Yet in such cases considerable selectivity still exists in what media content and other expressions and information in the public domain are tolerated.

From the early 1990s, the viability of authoritarian regimes and the effectiveness of curbs on expression and information flows in East and Southeast Asia were increasingly questioned. Many theorists believed that the earlier collapse of authoritarian regimes in the Philippines, South Korea and Taiwan would eventually be replicated across the region. Social transformations wrought by capitalism were thought to be releasing powerful pressures for political pluralism, including demands by educated middle classes for free expression and independent media (Huntington 1991). New global electronic media technologies – especially the Internet – were also regarded as a universal threat to control-minded authorities (Pye 1990, Kelly 1995, Barkham 1998), and a force for democracy (Grossman 1995).² Indeed, according to a draft bill introduced to the US Congress to fund hackers battling authorities in China and other authoritarian regimes in Asia, ‘the Internet stands to become the most powerful engine for democratization and free exchange of ideas ever invented’ (quoted in hiebert 2002). Moreover, new electronic media technologies and the associated free flow of information were depicted as functional imperatives for graduation to more advanced forms of economic activity and the attraction of international capital (Ohmae 1990, Brandon 2000). Since the political legitimacy of authoritarianism rests so heavily on economic growth, could pragmatic rulers resist changefl

however, some regimes proved much more durable than this prognosis anticipated. In particular, among the dynamic Asian countries that seemed to be inexorably clawing their way up the global economic ladder was a number of politically stable authoritarian regimes where the free flow of ideas and information had remained unlikely. Authoritarianism in Singapore and Malaysia seemed capable of reproducing itself for the foreseeable future. In these societies, the middle class has been more a force for regime consolidation than regime change, while international capital also appeared content to operate within authoritarian frameworks – including international media organisations within which self-censorship had become extensive (Rodan 1998a). Nor was the universal body blow the Internet was expected to deliver to the political controls of authoritarian regimes yet in evidence in Singapore and Malaysia (Rodan 1998b).

With the advent of the 1997–98 Asian economic crisis, though, a new critical focus centred on the institutional make-up of governance systems in the region. The scale and nature of this critique varied, as did the prescriptions for reform. For some analysts and activists, the Asian crisis confirmed the fundamental incompatibility of authoritarian rule and capitalist markets (Lohr 1998, Rudolph 2000). Democracy and civil society became clarion calls, especially from within non-government organisations (NGOs), to counteract state power and increase the accountability of public officials (Asiaweek 1999). Others concentrated their critique on more specific governance shortfalls in the region, emphasising the need for rule of law, transparency, regulatory systems and other institutional prerequisites for more robust market systems (Camdessus 1998a, Roubini, Corsetti and Pesenti 1998, World Bank 1998).³ Such prescriptions were an explicit attack on practices identified as arbitrary and corrupt exercises of power in favour of universal, rule-based procedures to enforce greater accountability of decision-makers in both the public and private sectors. The unifying theme to the various arguments for institutional reform was an instrumental rationale for change: that this is a functional necessity for sustainable capitalist market systems in Asia.

Of all the claims about the functional need for institutional reform, none featured more prominently nor had wider appeal than those concerning transparency and the free flow of information. The severity and suddenness of the crisis led to claims of information ‘black holes’ and insufficient media probing of the problems beneath the surface of the ‘Asian miracles’ – including corruption and other forms of power abuse (Balgos 1999). The absence of accurate and reliable information was widely thought to have compounded, if not caused, the collapse in international investor confidence in Asian markets (Devinney 1998, Coronel 1999).

however, the precise meaning and emphasis of reform prescriptions attached to the notion of transparency differed among its champions. There were at least two reform agendas running. On the one hand transparency was equated with the need for new systems of disclosure and scrutiny in the exercise of public and private power, explicitly advocating political openness and accountability on a broad scale. On the other hand transparency was expressed in more limited terms, principally or exclusively as improved corporate disclosures and other information availability of immediate market relevance.

These differences in emphasis reflected contrasting ideas about the primary utility of, and constituents to be served by, increased transparency. For some the point was to enhance the accountability of public officials and institutions to a wide range of social and political groups, whereas for others it was to increase accountability to the market. Whether the respective reform agendas of democrats and neo-liberals naturally intersected, or were in tension, was open to question. But despite variance over the meaning of transparency, in all cases it represented some sort of shift towards increased information being routinely placed on the public record and a whittling away of the discretionary powers of public officials on information availability. To that extent all transparency reform is intrinsically political, bolstering some interests and threatening others (Florini 2000).

Before distilling in any detail the main propositions developed throughout this book, a more detailed engagement with the literature on authoritarianism and governance in East and Southeast Asia is necessary. This will help to locate the assumptions and intellectual influences brought to bear on the contemporary debates about transparency, and precisely what is at stake theoretically in the cases under study. This discussion will focus particularly on modernisation theory and new institutional theory, two approaches that in different ways claimed to be vindicated by the Asian crisis but are challenged by the propositions in this book.

Capitalism and democracy as natural partners

Early modernisation theorists in the 1950s and 1960s operated from an assumption that there was only one institutional model on the road to progress. It involved the joint adoption of liberal economics and liberal politics (Higgott et al. 1985: 17–18). Essentially, to modernise, traditional societies needed to adopt the same organisational structures and social and political values as in the West. This entailed a largely technical process of diffusion, including diffusion of capital and technology (Rostow 1960), cultural values (Lerner 1968), and Western political values (see Higgott 1980). From this perspective, authoritarian regimes were regarded as remnants of traditional societies and inevitable casualties of modernisation.⁴

Theorists from the modernisation school developed empirical models identifying correlations, depicted as law-like relationships, between political development and various socio-economic variables – such as education, literacy and income levels (Potter and Goldblatt 1997: 12). One of the most influential studies in this vein was by Lipset, who concluded that ‘the more well-to-do a nation, the greater the chances that it will sustain democracy’ (Lipset 1960: 31).⁵ However, identifying a correlation is not the same thing as explaining it. On the actual causal links, modernisation theorists were less precise, although the political consequences of expanded middle classes and more extensive civil societies were thematic and strategic elements of most accounts. It was assumed that the higher educational levels of the middle class would translate into greater political rationality and tolerance of diversity. More broadly, increased complexity of social groups and plurality of interests resulting from economic and social transformations were thought to translate into a shift away from the centralisation of power in the state. In short, modernisation was seen to generate pressures for a political accommodation that only liberal democracy could effectively provide.⁶

The demonstrable capacity of authoritarian regimes not only to survive but also to preside over rapid industrialisation – especially in East and Southeast Asia – ensured that traditional modernisation theory diminished in influence by the early 1970s. Ironically, it was during this period that one of its most eminent exponents actually argued that authoritarianism was a necessary interim regime to establish the requisite social and political order for capitalist development – a position that assisted authoritarian leaders to rationalise repression within and beyond East and Southeast Asia (huntington 1973).

however, modernisation theory proved only to be in temporary retreat. From the late 1980s, numerous authoritarian regimes collapsed in East Asia, Latin America and Eastern Europe. Now Huntington (1991) argued we were witnessing an historical ‘third wave of democratization’ that was related to the last few decades of rapid capitalist market development. The arguments this time were generally far more sophisticated than earlier modernisation accounts, with more attention to the factors mediating the political impact of economic development (see Diamond, Linz and Lipset 1989, Diamond 1993). Nevertheless, expanded middle classes, better educated populations, increased exposure to international influences via sophisticated communication and media technologies, and other consequences of economic transformation, argued modernisation theorists, had both raised political expectations and fostered the organisational means for more liberal political regimes.

A feature of this literature was the emphasis on functional pressures towards liberal democracy deriving from more advanced and globalised market systems. This was encapsulated neatly in Pye’s (1990: 6) observations that:

All governments are put under pressure by the increasingly significant flows of international trade, finance and communications; by the effects of contemporary science and technology; and by all the other elements that make up what we imprecisely call modernisation. But the authoritarian regimes are the most vulnerable and are therefore being seriously undermined.

Moreover, the technically educated, middle class populations ensuing from this market development were understood to create new centres of power that simply can’t be accommodated under authoritarian rule. They represented a force for civil society and decentralised political systems (Pye 1990). Fukuyama (1992) reinforced this theoretical direction, boldly restating the idea of a linear pattern of human history with his claim that the conclusion of the Cold War represented the ‘end of history’ and the triumph of liberalism.

Modernisation theorists were not alone in restating the view that whatever detours might occur along the way, capitalist development was necessarily charted within limited institutional paths. Adopting a Marxist analysis, Harris (1988: 247), for example, argued that when capitalism matures in late industrialising countries: ‘The old state must be reformed or overthrown, to establish the common conditions of all capital: a rule of law, accountability of public officials and expenditure, a competitive labour market and, above all, measures to ensure the common interests of capital can shape the important policies of the state.’ In other words, corruption and crony capitalism would increasingly rub up against the functional requirements of more sophisticated forms of capital accumulation. However, the prospect of this resolving in favour of liberal democracy was contingent on social and political struggles.

There were other writers who also argued that, due to historically specific conjunctures of class and state interests, continued accommodations between advanced forms of capital and authoritarian regimes remained possible and viable within the region (Robison, Hewison and Rodan 1993, Khoo 1997). This work underlined the importance of distinguishing between liberal democracy and Weberian rationalism, suggesting that regardless of whether liberal democracy was the best political shell for capitalism it was by no means the only one.

For quite different reasons, a range of other perspectives countenanced the possibility of authoritarianism surviving within different parts of East and Southeast Asia in spite, and even because, of the rapid advance of capitalism. Cultural determinist arguments were revived, spearheaded by self-interested authoritarian leaders but often picked up with gusto by their functionaries and apologists who emphasised the distinctiveness of ‘Asian values’ and its implications for political regimes (Zakaria 1994, Emerson 1995, Mahbubani 1995, Robison 1996, Kausikan 1997). This was very much an attempt to hose down expectations that political pluralism was simply a matter of time throughout the entire region. Transitions theory literature analysing divergent experiences of collapsed authoritarian regimes in Latin America and East and Southern Europe also suggested a less certain trajectory for political regimes in East and Southeast Asia. It emphasised factors like leadership, negotiation processes and even chance as influential determinants in the survival and possible effective reorganisation of authoritarian regimes (O’Donnell, Schmitter and Whitehead 1986).

However, the point was that during the late 1980s and early 1990s modernisation theory regained much of its earlier ascendancy in the literature and policy circles. Remaining authoritarian regimes in the region were increasingly being viewed as exceptions to the general rule rather than as viable alternative political models for capitalist development.

Governance and authoritarianism

The late 1980s and early 1990s was also a period when, within the broad framework of neo-classical economic thought, the emerging new institutional economic theory began to exert a significant influence (Bates 1981, North 1981, 1995). New institutionalism is grounded in the notion that individuals make rational market choices, but that institutions – represented both by organisations and broader sets of procedures, rules and laws – fundamentally shape the choices available. This contrasts with the orthodox neo-classical conception of abstract, atomised individuals as well as the Marxist conception of class relations as the defining context within which market choices are made. From the new institutionalist perspective, institutions exert an influence in their own right and generate a logic that conditions actors’ behaviour. This represented a shift away from seeing institutions as the passive by-products of market forces to the potential generators of more rational and efficient market systems.

Within elements of the neo-classical camp, new institutional theory inspired a reassessment of the relationship between markets and states, most notably within the World Bank. Concern had surfaced over development failures in Africa and Eastern Europe, where despite Bank projects market systems were seen to be struggling due to what were seen as governance shortfalls. It was observed, for example, that: ‘Privatization may not succeed or be politically sustainable… unless clear rules and institutions contain transaction costs (i.e. The cost of arranging, monitoring and enforcing contracts)’ (World Bank 1991: i). This approach had implications for East and Southeast Asia, although they didn’t seriously manifest until after the Asian crisis of 1997–98.

The Bank (1991: i) broadly defined ‘governance’ as ‘the manner in which power is exercised in the management of a country’s economic and social resources for development’. It argued that sound development management was hampered by such factors as ‘weak institutions, lack of an adequate legal framework, damaging discretionary interventions, uncertain and variable policy frameworks and a closed decision-making process which increases risks of corruption and waste’ (World Bank 1991: i). Towards improving public administration and thus development management, the Bank prescribed four main areas of reform: increased accountability of public officials; a legal framework for development; the availability of accurate information about the economy, market conditions and public policies affecting the private sector’s competitiveness; and the adoption of transparency in decision-making to enhance accountability, restrict corruption and generate consultation between government and private interests over development policy.

Yet the Bank seemed to be open to the possibility that ‘good governance’ didn’t necessarily entail liberal democratic regimes. Thus, on the issue of accountability, it explained that how this might happen varies ‘widely in different countries, depending upon cultural characteristics, history, political institutions, administrative capacities and the public’s level of information’ (World Bank 1991: 26).⁷ Not surprisingly, authoritarian leaders and their custodians who were irritated by increased international scrutiny over human and political rights issues following the end of the Cold War preferred talk of ‘good governance’ to ‘democracy’. They staked claims to the former on the basis of sound market administration (see Koh 1993).

Though slower to move in this direction, the International Monetary Fund (IMF) also adopted the Declaration on Partnership for Sustainable Growth in late 1996 that committed it to ‘promoting good governance in all its aspects, including ensuring the rule of law, im...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• PREFACE
• ACKNOWLEDGEMENTS
• GLOSSARY
• 1: INFORMATION CONTROL AND AUTHORITARIAN RULE IN EAST AND SOUTHEAST ASIA: UNDER CHALLENGE?
• 2: BEDDING DOWN MEDIA AND INFORMATION CONTROL IN SINGAPORE AND MALAYSIA
• 3: BUREAUCRATIC AUTHORITARIANISM AND TRANSPARENCY REFORM IN SINGAPORE
• 4: KEEPING CIVIL SOCIETY AT BAY: MEDIA IN SINGAPORE AFTER THE CRISIS
• 5: CRONY CAPITALISM AND TRANSPARENCY REFORM IN MALAYSIA
• 6: CHALLENGES to MEDIA CONTROL IN MALAYSIA
• 7: CONCLUSION
• NOTES
• REFERENCES