Introduction
This chapter discusses contending theoretical approaches to political economy relevant to the study of Southeast Asia and outlines the approach taken in the rest of this book. Whatever their differences, all scholars investigating âpolitical economyâ share a belief that economics and politics cannot meaningfully be considered or studied as separate domains. Economic developments powerfully shape political ones, while politics has an enormous impact on markets. This distinguishes political economy from mainstream (neoclassical) economics, which tends to see politics as at best an unwanted intrusion into, or âdistortionâ of, the smooth operation of markets, and which seeks to understand economic life in an apolitical, technical manner. But it also distinguishes the field from much scholarship in politics and international relations (IR), which often ignores economic matters or treats them very simplistically. For example, many comparative politics scholars focus on the nature of party systems, manifestoes, political institutions, elections and regime types, neglecting the economy except as a domain of grievances and national policy-making, while some IR scholars still persist in viewing national economies as a property of statesâ national power.
For political economists, by contrast, the interconnections of politics and the economy are so obvious that they are perhaps too rarely specified. On the one hand, political conflict and decisions clearly shape how markets emerge and âmediateâ their operation. Even if they do not seem to substantively âinterveneâ in economic matters, all states (and their agents, like international organisations) engage in or regulate the provision of the basic infrastructureâhard and softâthat allows economies to function. States issue currencies and typically regulate their value to some extent. They issue laws that create markets and regulate market exchange, covering everything from imports and exports to weights and measures. However unevenly, states enforce these rules and, crucially, defend private property, by maintaining laws, police, and judicial and penal systems. States are also often big taxers and spenders. Even in Southeast Asia, which is well behind the average for developed countries, tax revenues range from 12 to 25% of GDP, while government spending accounts for 15â30% (ADB 2018: 336â337). This withdrawal and expenditure of funds has a significant impact on economic activity. Moreover, Southeast Asian states have taken a major role in guiding and producing economic development, a fact grudgingly recognised even by organisations typically hostile to economic interference by the state, such as the World Bank (1993, 1997, 2002).
On the other hand, the reverse is also true: the economy strongly influences political conflict and decision-making. At the most basic level, states survive because they tax economic activity. If the economy falters, the state itself is in trouble. That could precipitate cuts in expenditure, which might provoke social unrest or shifts in perceptions of political legitimacy. To avoid this, in a very general sense political leaders must adopt policies that promote growth. Even setting aside the much-theorised relationship between the state and capital, and changes in the balance of forces over time, it should not be surprising that, under capitalism, states exhibit a systematic bias towards the interests of business. More broadly, economic development has a huge impact on societyâs basic composition. A highly industrialised economy is likely to have a large urban working class, for example, while a largely agrarian economy will have a substantial peasantry instead. An economy that has developed heavily through state leadershipâas in Southeast Asiaâwill have a less independent capitalist class than one that developed primarily through private enterprise. A highly developed economy will have a bigger middle class, proportional to the overall size of the population, than a less developed one, and so on. This will naturally influence the kind of political actors that exist, and the strategies they can develop.
Beyond these uncontroversial truisms, however, political economists rarely agree on how to conceptualise the relationship between states and markets, and on how political outcomes shape economic outcomes and vice versa. This chapter surveys the three most important positions in debates on Southeast Asia: Weberian approaches; historical institutionalism; and the Murdoch School, also known as âsocial conflict theoryâ. This survey cannot be exhaustive, and the groupings are to some extent analytical contrivances, but they do serve to provide a reasonable overview.
The major difference between these approaches concerns how they conceptualise institutions. Weberians have primarily focused on describing the institutions seen as necessary to promote economic development. Drawing implicitly or explicitly on Weberâs conceptualisation of the state, they claim that institutionsâlike states or market regulatorsâcan (and ideally should) be quite autonomous from society. Notably, for the purpose of this book, they have drawn attention to the emergence of âdevelopmental statesâ in Asia, which, by virtue of their bureaucratic capacity and insulation from socio-political forces, have been able to make policies conducive to development, ostensibly underpinning the so-called âeconomic miracleâ of the post-World War II era (e.g. Evans 1995; Johnson 1982). Historical institutionalism also broadly derives from a Weberian intellectual tradition. However, the apparent withering away of the institutions associated with the developmental state has led most historical institutionalists to shift attention away from evaluating state capacity and autonomy and towards explaining institutional dynamics and how they shape a range of political outcomes, including regime types and policy-making. By contrast, for the Murdoch School, which has always been concerned with explaining a wide range of political outcomes in Southeast Asia, institutions reflect and entrench existing distributions of power among constellations of social forcesâespecially class forcesâwithin particular historical junctures. They evolve and operate not through autonomous political decision-making by enlightened and meritocratic bureaucracies, or specific historical legacies (paths), but through dynamic and evolving struggles for power and resources rooted in the structure of the wider national and global political economies.
This book takes the Murdoch School approach . As this chapter argues, there is little evidence that political or economic institutions are, or can be, autonomous from socio-political struggle, making Weberian approaches inadequate. Meanwhile, historical institutionalismâs focus on institutional dynamics of stasis or change is hampered by an under-developed theorisation of the wider ...