Architects of the State: International Financial Institutions and the Reconstruction of States in East Asia

Authors

  • Terence C. Halliday

    Corresponding author
    1. American Bar Foundation
    2. Center on Law and Globalization
    3. Northwestern University
    4. School of Regulation, Justice and Diplomacy, Australian National University
      Terence C. Halliday is Research Professor, American Bar Foundation; Co-Director, Center on Law and Globalization, a partnership between the American Bar Foundation and University of Illinois College of Law; Adjunct Professor of Sociology, Northwestern University; Adjunct Professor, School of Regulation, Justice and Diplomacy, Australian National University. This research was generously supported by the National Science Foundation grant (SES-0214301) and the American Bar Foundation and benefitted greatly from the comments of Gregory Shaffer.
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Terence C. Halliday is Research Professor, American Bar Foundation; Co-Director, Center on Law and Globalization, a partnership between the American Bar Foundation and University of Illinois College of Law; Adjunct Professor of Sociology, Northwestern University; Adjunct Professor, School of Regulation, Justice and Diplomacy, Australian National University. This research was generously supported by the National Science Foundation grant (SES-0214301) and the American Bar Foundation and benefitted greatly from the comments of Gregory Shaffer.

Abstract

For international financial institutions (IFIs), it is a continuing puzzle why the global norms they propagate are enacted either reluctantly or not at all. This article shows that failures of enactment and implementation frequently occur because many IFI-initiated law reforms go far beyond changing the law; they amount to a restructuring of the state itself and the accompanying redistributions of power. This article demonstrates how state restructuring can occur in a technical area of commercial law by reanalyzing the ways global and transnational designs of corporate bankruptcy regimes fared between 1998 and 2006 in three countries variously affected by the Asian financial crisis: China, Indonesia, and South Korea. State restructuring occurred by (1) shifting the boundary between the market and state, (2) shifting power inside the state, and (3) vesting new powers in the state. The article identifies the recursive dynamics through which the changes unfolded and shows how variations in the efficacy of international architects of the state can be attributed to the interplay of four sets of factors: the coherence of global norms, the relative power of global versus state actors, domestic demand and mobilization for restructuring, and the extent of state restructuring that reforms will induce.

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