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Overview
The Asian financial crisis of 1997-98 involved, among other
things, a failure of regulation. Some believe this failure is endemic
to global capitalism, and others believe it was profoundly local
and idiosyncratic, emanating from regulatory flaws in the affected
countries, stretching an arc from Thailand and Indonesia to Korea
and Japan. There is also a debate about the nature of the regulation
that failed. Some argue that the crisis emanated from a surfeit
of nettlesome regulations and endemic industrial policy;
others claim it happened for want of effective regulations and (even)
industrial policy. Across the hypotenuse of these disagreements,
however, stretches a universal recognition that regulatory infrastructure
and institutions do matter and that they must play a major role
in the way we think about economic development. After the
miracle years in East Asia, "good governance" has become the Spirit
of the Age.
