Comparing Institution-Building in East Asia

Power Politics, Governance, and Critical Junctures

H. Yoshimatsu

• Publisher: Palgrave Macmillan
• Year: 2014
• Print ISBN: 9781137370549
• eBook ISBN: 9781137370556
• Topic: Politics & International Relations
• Subtopic: Energy Industry
• Index: Politics & International Relations

Yoshimatsu explores the causes and implications of the diverse degree of institution-building in East Asia by examining two processes of initiating and developing multilateral institutions in five policy areas: trade, finance, food security, energy security, and the environment.

1

Introduction

In the new millennium, East Asia has emerged as an increasingly prominent region in the global economy and in world politics. The region has continuously achieved relatively high economic growth, becoming the world’s primary source of manufacturing products with intensive production networks and supply chains. Such growing economic capabilities have led to an enhanced political presence. Not only three core Northeast Asian countries – China, Japan, and South Korea – but also Indonesia gained a seat in the Group of Twenty (G-20), an increasingly important political grouping. The Association of Southeast Asian Nations (ASEAN) has raised its international profile by forming substantial linkages with its neighbouring countries such as India and Australia/New Zealand and by pursuing closer relationships with global players such as the United States and the European Union (EU).

For a long time, initiatives and projects for regional cooperation in East Asia stayed at a preliminary stage especially compared with Europe, where regionalist ideas and projects have been advanced for more than half a century. The East Asian states, which have a strong propensity to pay respect to maintaining sovereignty and domestic regime autonomy, find great difficulties in coordinating their interests for achieving far-reaching, collective goals. Despite such backwardness and difficulties, a regionalist aspiration in East Asia has surely intensified in the new millennium. The states in the region have developed various multilateral frameworks with the expanding scope of issue-areas for cooperation and deepening efforts to institutionalise cooperative initiatives. This book intends to make some contributions to the study of international relations in East Asia by elucidating complicated processes of institution-building in the region.

Evolving regionalism in East Asia

Regional cooperation has evolved and proliferated in East Asia by advancing several multilateral frameworks. The members of ASEAN and the three major Northeast Asian countries have deepened and expanded regionalist ideas and projects under the framework of the ASEAN Plus Three (ASEAN+3). The framework, formed at a summit meeting in December 1997, was positioned as the ‘main vehicle’ for the building of an East Asian community. The East Asian Summit (EAS) was created in 2005 among the ASEAN+3 members as well as Australia, New Zealand, and India as a regional forum to discuss political, security, and economic issues in East Asia. The EAS became an 18-member institution in 2011 by adding the United States and Russia as new members. In addition to these two frameworks, the East Asian countries have advanced cooperative activities under the economic-oriented Asia-Pacific Economic Cooperation (APEC) and the security-relevant ASEAN Regional Forum (ARF), which hold a larger membership involving several countries in the Americas or South Asia. Thus, multilateral frameworks for regional cooperation in East Asia have developed in the multilayered structure under complicated political configurations involving diverse memberships.

ASEAN members as well as China, Japan, and South Korea have been the key players of institution-building in East Asia, and the ASEAN+3 framework has provided the main locus for their collaboration. The range of cooperative fields under the framework expanded to various functional areas including finance, energy, trade, health, and agriculture. As a consequence of continuous dialogues among participating countries, multilateral institutions for advancing cooperative programmes have gradually developed in several policy areas. While financial ministers achieved the multilateralisation of bilateral swap agreements under the Chiang Mai Initiative (CMI), agricultural ministers reached an agreement to establish the ASEAN+3 Emergency Rice Reserve (APTERR). In the trade field, the East Asian countries are engaging in the formation of the Regional Comprehensive Economic Partnership (RCEP) as an advanced step from the ASEAN+1 free trade agreement (FTA) networks.

In the process of regional cooperation, political leaders in East Asia have confirmed political will and the overall direction of cooperation at the summit meetings, and the building of cooperative institutions has been advanced in specific policy fields. Under the ASEAN+3 framework, ministerial meetings for discussing cooperative initiatives and projects have been organised in individual policy areas. Significantly, there are notable differences in the progress of cooperative initiative and the degree of institutionalisation among different policy areas. While there are areas where the progress of cooperation has led to the relatively tighter institutionalisation of cooperative projects, such as the financial sector, the process for realising cooperative arrangements has been slow and fragmented in other sectors such as trade and energy. Such differences are produced by various factors including political bargaining among participating governments, commitments and pressures from extra-regional states and forces, the creation and development of collective norms and principles sustained by common identity, consideration of domestic political and economic interests, the range and involvement of non-state actors, and so on.

This research explores the causes and implications of the diverse degree of institution-building in different policy areas in East Asia by examining two processes of initiating and developing multilateral institutions in five policy areas: trade, finance, agriculture, energy, and the environment. It pays particular attention to political interactions among China, Japan, South Korea, and ASEAN – the four major parties in East Asia – in realising their specific interests and preferences in the process of institutional creation and evolution.

Reviewing research on regionalism in East Asia

The main objective of this book is to examine the process of regional institution-building by shedding light on the genesis, evolution, and design of concrete institutions in specific policy fields. Such an examination is designed to make contributions to the study of regionalism in East Asia. Importantly, regionalism in East Asia incorporates specific features of an emphasis on informality, consultation, and voluntarism largely because ASEAN, the driver of regional institution-building, has paid respect to these norms. Moreover, regionalism in East Asia has developed in seemingly contradictory political economic conditions: lingering political tensions and dynamic economic interdependence. These factors have encouraged the students of international relations, area studies, and comparative politics to explore the origin, development, and effects of regionalism in East Asia from various theoretical angles.

The first set of studies highlights the influence of power politics on the evolution and management of regional affairs. Quite a few studies have demonstrated that the predominance of the United States and its bilateral links with regional states (the so-called hub-and-spokes system) were the major reasons why the development of regional institutions among East Asian states and political will to sustain such a development have been weak and fragmented (Grieco 1999; Beeson and Berger 2003; Beeson and Higgott 2005; Katzenstein 2005; Sutter 2008). In this respect, Katzenstein’s research needs particular attention. Katzenstein (2005) explains the evolution of regional institutions in Asia (and Europe) in terms of the American imperium and the presence of the regional core state. The American imperium through preponderant material and ideational capabilities has established specific interactions with Asia such as cross-fertilisation, co-evolution, and blowback. Japan, which held specific historical experience and evolution in the American imperium, played a role as the core state in creating an institutional order in Asia. While some scholars have applied the neorealist perspective to an analysis of regional cooperation in specific functional areas, others have analysed the cases where the US veto power disturbed the development of cooperative initiatives in East Asia.¹

The second set of studies sheds light on domestic politics as the main source of constraint in regional affairs in East Asia. Solingen (2008) argues that while the nature of dominant domestic coalition often explains the genesis of regional institutions, it is underdetermining in accounting for their design, and that the nature of domestic coalitions matters when the consequences of creating or designing institutions for relative power distribution, transaction costs, or normative convergence are negligible. Stubbs (2011) applies the domestic coalition model to the relationships between the responses of the East Asian governments to the global financial crisis and domestic battles of state-interventionist and neo-liberal coalitions. Other studies also focus on domestic elements such as the adherence to domestic political legitimacy (Narine 2004) and domestic regulatory capacity (Hamilton-Hart 2003) as the most critical factors disturbing the creation of effective multilateral mechanisms in East Asia. These studies posit that preferences of dominant domestic actors and their coalitions or the state’s political capabilities and shared beliefs are crucial factors conditioning the genesis and design of regionalism in East Asia.

The third set of studies explains regional affairs in East Asia by employing constructivist concepts such as identity and norms. Several scholars account for growing momentum to regional cooperation in East Asia in terms of gradually developed collective identity. They hold that the Asian financial crisis in 1997–98 played a catalytic role in consolidating the East Asian identity by strengthening policymakers’ perception of living in a common destiny and the image of a region in adversity besieged by outsiders (Nabers 2003; Terada 2003; Yu 2003). Other scholars have paid attention to ASEAN and its shared norms as variables that have promoted regional cooperation and integration in East Asia (Acharya 1997; 2001; 2003; 2004; Khong and Nesadurai 2007). The development of ASEAN became possible in search of a common identity through shared norms and socialisation. ASEAN members have developed, through diplomatic interactions and practices, the so-called ‘ASEAN Way’, a set of norms that include the non-interference principle, informal consultation, pragmatic expediency, consensus-building, and flexible incrementalism (Acharya 1997: 329–33; Liu 2003: 20–22).² According to Acharya (2003: 211), regional leaders have asserted that their non-legalistic, consensual, and process-centric ASEAN Way is a distinctive and workable alternative to a European-style multilateralism. The cumulative and social process has played a critical role in making Southeast Asia a stable, cooperative, and coherent region. ASEAN has distinctive founding ideas on regional resilience for ‘One Southeast Asia’, which was bounded by the members’ nationalism. ASEAN’s elites have, then, reaffirmed, maintained, or renegotiated ASEAN ideas through dynamic dialogue-driven social processes such as argument, consensus-seeking, and social reinforcement (Ba 2009).

The brief overview of the past research reveals complex causal factors that affect regionalism and regional affairs in East Asia. Although I categorised the studies of regionalism in East Asia into the three groups, quite a few studies have sought to synthesise certain theories and approaches and build an integrated analytical framework (Katzenstein and Sil 2004; Aggarwal and Koo 2008; He 2009; Rathus 2011). In reality, an approach that relies on one or two theoretical angles or conceptual frames is not enough to elucidate regional cooperation in East Asia, especially the complicated process of institution-building. This study also adopts an integrative approach to look into evolving and complex political processes for the initiation and development of specific regional institutions. A critical issue is what factors are considered as variables that have significant effects on progress or regress in the building process of the institutions.

Four factors influencing regional institution-building

This research takes up four key variables that are assumed to bring about diverse institutional designs and processes in different policy areas. The first is political interactions among involved parties. In East Asia, distribution of capabilities among great powers has constituted the basic framework for international affairs, and the states have a strong adherence to maintaining national interests and sovereignty. This neorealist perspective is considered the first variable that influences the process of institution-building in East Asia. The second is policymakers’ preferences in the domestic political process. The great powers can reflect domestic political elements in pursuing specific goals in external policies. In particular, policymakers’ preferences in relation to political legitimacy are regarded as influencing the states’ external commitments and policies. The third is the involvement of non-state actors in the policy formation process. State actors do indeed remain vital and active participants in regional public affairs, but they are no longer the only players who initiate regional policies, nor do they control the entire process of policy development. The non-state actors can provide specific information and expertise that state actors require in making decisions in a wide range of issue-areas such as the economy, technology, social development, and the environment. In other words, the governance perspective on sustaining coordination and coherence among a wide variety of actors is crucial for understanding public policy formation in the current world. The fourth is critical junctures in historical trajectory. Regional affairs including institutional arrangements follow the overall historical sequence. The historical sequence is not smooth and even, and some contingent shocks and events create critical junctures in the trajectory. Such critical incidents and crises have profound influences on the subsequent track, changing patterns in the path of institutional development.

The main argument of this book is fourfold. First, regional power transition casts significant shadows on the development of institution-building in East Asia. Japan initiates regional institutions in major policy areas, but the key actor who conditions the progress of these institutions is China. The degree of commitment that China makes to regional cooperation directly influences the degree of institutional development. Second, the configuration of policymakers’ preferences for political legitimacy is different between Japan and China: Japanese government officials seek to pursue political legitimacy of their own ministries through regional commitments, while the ruling party’s aspiration for maintaining its political legitimacy has strong influences on Chinese behaviour and policies towards East Asian cooperation. Third, governance elements in regional institution-building remain underdeveloped in East Asia. The non-state actors represented by research institutes can be involved in the policy formation process, but their real influences on policy development are limited largely because of weak internal cohesion and the states’ dominance of policy networks involving non-state actors. Fourth, the building of regional institutions proceeds under the marked influence of critical events. The critical events represented by global/regional crises play a catalytic role in revealing the dysfunction of the existing institutions and making policymakers recognise the need to hold effective regional mechanisms, resultantly elevating the institutional path to a new level at which it is impossible to return to the previous point.

The values of the research

This research has four diverse values and significances. First, it contributes to developing the theoretical study of regionalism in East Asia by synthesising theoretical perspectives of politics and international relations. The dominant theoretical approach that explains international relations in East Asia is neorealism, and liberal and constructivist approaches provide alternative theoretical foundations. This study gives priority to political interactions over power and interests, but seeks to go beyond the neorealist paradigm by incorporating three additional theory-oriented perspectives – domestic politics, regional governance, and critical juncture. The influence of the variables that derive from the perspectives is woven into power-based interactions among the states.

Second, this study contributes to deepening the study of regionalism in East Asia by expanding the scope of empirical research. The growing importance of East Asia in international politics and the global economy has encouraged the study of the political economy of regionalism in East Asia. These studies have surely made valuable contributions to regionalism in East Asia, but representative studies have dealt with major empirical cases, typically security, trade, and finance. Comprehensive and comparative research on other policy areas has been limited although multilateral cooperation has gradually developed in these areas. This study can fill in the gap in research by examining the development of regional institutions in two cases in the economics field, two in the non-traditional security field, and one in the environmental field.

Third, this research can reveal the complicated political process of regionalism in East Asia. It highlights specific policy fields, and traces scrupulously the initiation and development of major institutions mostly formed under the ASEAN+3 framework. The development of institutions and political interactions among state actors are carefully examined by paying attention to their interests and preferences. Such a process-tracing method enables this study to elucidate forward and backward forces in the construction of institutions and changes in the forces in the evolving historical context.

Fourth, this research can provide perspectives on the maintenance of a contemporary regional order in East Asia. While the gradual formation of cooperative institutions is seen in East Asia, various challenges are also emerging in the region. Representative of such challenges is the rise of China in an accelerated regional power transition. While China’s rise surely provides economic and social benefits for the entire region, its rising economic power and resultant assertive diplomacy tend to provoke political concerns among its neighbouring countries, which search for various strategies including balancing and hedging. This research is expected to elucidate how the rise of China occurred in the practical context of policy evolution and to provide some insights on the management of the Chinese ascendency in East Asia.

The structure of the book

The main objective of this study is to describe how processes in regional institution-building are different in diverse policy areas and explain why such differences have been produced in the institutions’ developmental path. In order to achieve this objective, this book sets up an analytical framework on the basis of independent and dependent variables, and traces the creation and development of particular institutions in five policy areas.

Chapter 2 presents analytical frameworks that comprise primary and supplementary pillars. The primary pillar is based on the neorealist perspective that highlights political interactions among states with an interest in initiating and developing multilateral institutions for regional cooperation. The supplementary pillars consist of three variables: state policymakers’ policy preferences for pursuing political legitimacy; non-state actors’ involvements in the policy formation process; and a contingent crisis or critical event in historical trajectory. On the basis of the frameworks, I will undertake empirical analyses regarding institutional creation and evolution in specific policy fields.

In chapters 3–7 empirical analyses are conducted in five policy fields. In Chapter 3, the development of FTAs in East Asia is examined. Although major states in East Asia engaged in the formation of bilateral or minilateral FTAs after the late 1990s, it took a long time to develop these bilateral, line-based FTAs into a multilateral, square-based FTA. Chapter 3 examines the political p...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Tables and Figures
• Preface and Acknowledgments
• List of Abbreviations
• 1. Introduction
• 2. Frameworks for Analysing Institution-Building in East Asia
• 3. Promoting Trade Liberalisation through Free Trade Agreements
• 4. Developing Institutions for Regional Financial Stability
• 5. Food Security Cooperation through Emergency Rice Reserve
• 6. Energy Security Cooperation under ASEAN+3
• 7. Environmental Cooperation: The Monitoring of Transboundary Air Pollution
• 8. Conclusion
• Notes
• References
• Index