In this paper we set out to accomplish three objectives. First, we wanted to track and describe the way the fiscal reforms have been implemented in China's townships. Second, we have tried to identify the effect that the fiscal reforms have had on the fiscal health of the township. This objective was pursued in three contexts: the effect on the average township; the effect on townships in different provinces; and the effect on townships in poor and rich townships. Finally, we sought to assess the impact that the fiscal reforms had on village fiscal health and farmer satisfaction.

Although farmers certainly have expressed their support for tax and fee reduction through a variety of media, our results show that the fiscal reforms are far more complicated and complex than tax reduction policies. They include a large set of policies that have sought to reassign expenditures, realign responsibilities (for control over resources that flow from county to town and town to county), reduce the importance of extrabudgetary and self raised funds, and increase investment into the public goods infrastructure in rural areas. When assessing the broad impact of these policies on township fiscal health, we find the average township has not fared well. Although county to town transfers have risen, the targeted transfers to offset the decline due to the tax and fee reduction policies do not nearly cover the losses of fiscal resources in the system as a whole. In addition, many policies are putting increasing control in the hands of the county financial office. through changes such as increasing requirement to hand up town to county transfers and expenditure reassignments (even though the fiscal resources come out of the township's budget). Hence, overall the fiscal condition of township's operating budget has clearly deteriorated between 2000 and 2004.

The bright side of the fiscal reforms has come in the area of capital budget management and flows of fiscal resources into new infrastructure investment. Between 2000 and 2004 there has been a veritable explosion of investment into the rural economy, mostly in roads, but also into irrigation, drinking water and to a lesser degree into clinics. The investments have risen largely due to the rising allocation by upper level governments. While we show that the rising investment from any source increases farmer satisfaction, there are some concerns with the new effort to improve rural infrastructure. First, in many places (and especially in Jiangsu and other richer townships) as investments from above have risen requirements for matching funds apparently have led to an increase in township debt. Second, the increasing reliance investment from above also has a drawback. While any investment from any source is shown to increase the satisfaction of farmers, ceteris paribus, when the investments come from above, they appear to reduce farmer satisfaction. Apparently, when villages are less involved with the project selection, design and implementation, the projects leave farmers less satisfied.

Health is an important factor in the process of economic development. Good

health is important for increasing the productivity of labor force and for raising the

income-earning ability of farm households. Health also has been shown to have positive and statistically significant effects on economic growth. For example, Fogel (1994) argues that about a third of income growth in Britain between 1790 and 1980 can be attributed to improvements in health. In developing countries, good health is viewed as a critical input into poverty reduction and long-term economic development. In short, it has been argued that investment in health is good business in many different settings and environments.

Previous studies have found that the returns to education in rural China are far lower than estimates for market economies. In this paper, we try to determine why previous estimates are so low. Whereas estimates for the early 1990s average 2.3 percent, we find an average return of 6.4 percent. Furthermore, we find even higher returns among younger people, migrants, and for post-primary education. We further show that although part of the difference between our estimate and previous estimates can be attributed to increasing returns over time, a larger portion of the difference is due to the methodology used by other authors.

Since the mid-1990s, China, Japan, and Korea have come under severe pressure to restructure and reform their economic systems. Indeed, across East Asia, governments are attempting to address their structural problems with a variety of reform programs. It is still too early to declare the triumph of financial globalization, and East Asian financial and corporate systems continue to fall short of global standards in structure and performance. Yet now that the reform process has been under way for more than five years, old models have been discarded and new patterns are emerging.

This book identifies and accounts for empirical regularities across East Asian countries and sectors, which previous studies have left largely unexplained. In general, the distinguished contributors to this collection conclude that the interaction between financial globalization and domestic politics is the key to unlocking the reform process. In particular, the authors address issues important to the study of East Asian political economies—their receptivity to financial globalization, their financial integration, the convergence or divergence of their economic institutions, and the impact that their institutional transformations will have on national competitive advantage and the global economic system.

This title is out of print. Download PDFs below.

1. Front matter/ Financial Globalization and East Asian Capitalism: An Overview (Jongryn Mo and Daniel I. Okimoto)
2. The Politics of Reform in Japanese Finance: Assessing the Relative Influence of Foreign Investors (Jennifer Amyx)
3. Policymaking in the Era of Financial Globalization: The Battle for Japanese Corporate Reforms, 1996–2002 (Yves Tiberghien)
4. Turning a Crisis into an Opportunity: The Political Economy of Korea’s Financial Sector Reform (Wonhyuk Lim and Joon-Ho Hahm)
5. East Asian Capital Flows: Political Networks, Liberalization, and Crises (A. Maria Toyoda)

Ten years ago, in the summer of 1995, it was fashionable in Washington and Seoul to predict the imminent collapse of North Korea's political and economic systems, and even the state itself. While clearly an errant forecast, it is easy to see why pundits and analysts thought as they did. Kim Il-Sung had died. Kim's son and successor, Kim Jong-Il, was failing to lead just as the country suffered a massive agricultural failure. A nuclear-weapons dispute with the United States had forced a costly full-scale mobilization of the country's million-man army. It was likewise clear that North Korea's industry had shut down; night imagery of the peninsula showed, quite literally, that the lights were out in North Korea.

Ten years on, this volume aims to rectify misconceptions and increase collective understanding about North Korea. It is intended to present a snapshot of what is happening in North Korea now -- economically, politically, and socially. To be sure, much of the country remains in shadow, and there is much we still do not know. Moreover, issues of North Korean nonproliferation are so often binary that compromise becomes difficult, if not impossible.

The distinguished contributors -- specialists in politics, economics, human rights, and security -- advocate a subtler, more multidimensional approach to the North Korea problem. Offering cautionary perspective on this poorly understood place, they highlight recent positive developments and suggest solutions to seemingly intractable problems. Most attest that economics, commerce, and integration -- all arenas in which slow progress is being made -- may be the most powerful forces for change on the Korean peninsula. This timely book encourages thoughtful, pragmatic discussion about North Korea and seeks to light the road ahead, for the Korean Peninsula and beyond.

(This book is now out of print. You may download the full text here.)

China's size and the nature of its integration into the world economy imply that rural development in this country has to respond to big challenges that cannot be solved by resorting to government intervention but instead require the operation of well -functioning markets. To assess the links between land and labor markets market imperfections, institutional rigidities, or other entry barriers either prevent market s from operating or lead to undesirable outcomes, we use a large nationally data set that is representative for China's rural areas. We find that households with limited endowments of land and higher agricultural ability (and from villages with less restriction on land transfer in terms of to whom to rent and types of land to rent) tend to rent in land. And a well functioning of land transfer markets facilitates the emergence of labor markets.

One of the few ways to get a taste of North Korea, short of leaping through numerous hoops to get a visa to visit the country, is to eat cold noodles (naengmyen). Most South Korean cities and even a few American ones offer several types of North Korean-style noodle restaurants. The version often prepared in Pyongyang, North Korea's capital, is mul naengmyen, or cold noodles in broth. It is served in a large metal bowl and looks like a flowering mountain rising up from the sea. Artfully balanced atop the mound of noodles made from buckwheat flour are julienned cucumbers, several slices of beef, half a hardboiled egg, and a few pieces of crisp Korean pear. When prepared Hamhung-style -- named after the industrial city on North Korea's east coast -- noodles are made from sweet potato flour and often topped with raw skate, which has a slightly ammoniac flavor.

The signs in the South advertising Northern-style cold noodles are a reminder of the Korean War and the division of the peninsula. After the Korean War, refugees from the conflict set up stalls in the markets of Seoul to sell the "taste of the north" to those who could no longer travel there. The recipes they brought with them to the south were sometimes the only valuables they carried. In the 1990s, a new wave of North Koreans came to the South and established naengmyen restaurants. Hailing from the North lends a certain authenticity to the preparation of the dish. Whether prepared by the refugees of the 1950s and their descendents, the defectors of the 1990s, or North Koreans themselves in Pyongyang or Hamhung, cold noodles are something that North Koreans are widely credited with doing better than South Koreans.

But the way naengmyen is "consumed" in the South reveals the great disparity between the two countries. There are many jokes in South Korea about the number of North Korean defectors who have only this one marketable skill. Since cooking in Korea is largely a woman's job, the close association of North Koreans with the production and sale of cold noodles subtly feminizes and, according to patriarchal Korean values, devalues them. North Koreans are thus second-class citizens, both those who are unemployed (the majority) and those who are employed only to provide service to the real "breadwinners" of the country. Anthropologist Roy Richard Grinker relates how South Korean textbooks and popular culture often depict North Korea as the younger brother of the more advanced South Korean older brother. Given the cultural associations of naengmyen, wife to husband might be the more appropriate analogy. A recent Joongang Ilbo Photoshop cartoon reinforces this sexist gloss on inter-Korean relations by depicting South Korean President Roh Moo Hyun dressed as a Choson-era husband with North Korean leader Kim Jong Il as his bride.

In a divided country, cold noodles serve as an important reminder of a common culture. They also represent a unique contribution that the economically weaker North Korea can bring to the reunification process. But however tasty Pyongyang-style mul naengmyen may be, cold noodles ensure neither a sustainable livelihood for every North Korean defector nor an equal place at the reunification table for North Korea.