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Transaction Costs and Crony Capitalism in East Asia

2003/07/01 by David C. Kang · 1 citation
Social Sciences · Economics, Econometrics and Finance · #Culture, Economy, and Development Studies #Economic Growth and Productivity #Global Financial Crisis and Policies

paper · doi:10.2307/4150189

openalex publication_date 2003/07/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/02

Abstract

The previous generation of scholarship on Asian development agreed on one seemingly plausible analytic point: uncorrupt governments were better at fostering growth than those riven by crony capitalism and corruption.1 Yet the events of 1997, combined with the waves of corruption scandals during the 1990s in successful cases such as South Korea and Taiwan, have made the widespread existence of crony capitalism too obvious to ignore.2 As Richard Doner and Ansil Ramsey argue, if corruption and rent-seeking can be damaging to growth in some countries, but not others, we need a clearer understanding of what kinds of corruption and rentseeking affect economic performance in what kind of circumstances.3 Why did corruption and cronyism impede growth in some developing countries but not in others? 4

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