A Stake in the Heart of Lipset's Law? Indonesia versus Modernization Theory
Seymour Martin Lipset famously claimed that the more well-to-do a nation is, the greater the chance that it will sustain democracy. This "law" fits the experience of several countries in Northeast and Southeast Asia. Formerly authoritarian South Korea and Taiwan grew rich and became stable democracies with active civil societies, as Lipset would have expected. His "law" fits the Philippines and Thailand as well- -poor countries with tenuous holds on democracy where uncivil societies have mobilized to defend elite hegemony against mass-based electoral challenges.
The case of Indonesia, in contrast, limits Lipset's Law. Poor yet stably democratic, Indonesia is free of regime-threatening social conflicts. Arguably, despite its poverty, its democracy is already consolidated. India's record of sustaining democracy is another case in point. These poor yet successfully democratic polities amount to large stakes in the heart of modernization theory.
Prof. Thompson will contend that Indonesia's democracy is neither middle-class-based nor dominated by big business, but is instead still characterized by traditional cross-cutting ethno-religious cleavages that limit the impact of money politics, reduce the risk of populism, foster elite consensus, and thereby encourage democratic stability. He will link his argument not only to Lipset's Law but to the intellectual legacies of Alexis de Tocqueville, Antonio Gramsci, and Barrington Moore among other students of democracy and modernity.
Mark R. Thompson is a professor of political science at the University of Erlangen-Nuremberg in Germany. A Chicago native, he took his first degree in religious studies at Brown University followed by postgraduate work at Cambridge University and the University of the Philippines. Fascinated by Philippine people power, he wrote his dissertation at Yale University on the anti-Marcos struggle (Yale University Press, 1996). After moving to Germany, he witnessed popular uprisings in East Germany and Eastern Europe, inspiring him to conceptualize democratic revolutions in essays later published as a book (Routledge, 2004). He is in residence at Stanford from February through April 2009.
Philippines Conference Room
Mark Thompson
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
Professor Thompson builds on Barrington Moore's insight that there are different "paths to the modern" world. Thompson's manuscript explores alternatives to the familiar South Korean-and Taiwan-based model of "late democratization." According to that model, political pluralism follows a formative period of economic growth during which labor is demobilized and big business, religious leaders, and professionals depend upon and are co-opted by the state.
Thompson argues that even when these preconditions are in place, democratization need not follow. Singapore is an illuminating case in point. The autocratic growth model pays insufficient attention to politics, including the sometimes crucial role of student activists in challenging developmental authoritarianism and triggering a democratic transition, as in Indonesia. As political actors, students (rather than a progressive bourgeoisie) may fill the oppositional vacuum created by the preconditions that characterized predemocratic South Korean and Taiwan.
In his critique of Northeast Asian-style, post-authoritarian "late democratization" and its emphasis on economic growth as the driver of political change, Professor Thompson uses evidence drawn from paired comparisons of Vietnam with China, Hong Kong with Singapore, and between South Korea and Taiwan on the one hand and other major Southeast Asian cases on the other.
Mark R. Thompson is a professor of political science at the University of Erlangen-Nuremberg in Germany. A Chicago native, he took his first degree in religious studies at Brown University followed by postgraduate work at Cambridge University and the University of the Philippines. Fascinated by Philippine people power, he wrote his dissertation at Yale University on the anti-Marcos struggle (Yale University Press, 1996). After moving to Germany, he witnessed popular uprisings in East Germany and Eastern Europe, inspiring him to conceptualize democratic revolutions in essays later published as a book (Routledge, 2004). He is in residence at Stanford as Lee Kong Chian Distinguished Fellow in Southeast Asian Studies from February through April 2009.
March 2009 Dispatch - Venture Capital in China and India - A Comparison
Venture capital (VC) investment provides a unique mechanism for gauging the technological and entrepreneurial sophistication of a national economy. It is no surprise, then, that the two giants of Asia—China and India—have rapidly become important destinations for VC investment. The latest data available from Ernst & Young reveals an astonishing development: China received more VC investment than any nation except the United States. India, though lagging behind China, still received $862 million. To compare, over $30 billion in VC money was invested in the United States in 2007; $823 million was invested in Canada. Clearly, China and India are becoming nodes for the global VC practice. Many of the largest and most prestigious Silicon Valley VC firms have established significant presences in both nations.
China and India differ in many ways, but with respect to the development of VC they share important characteristics. Until late 2008, both nations had rapidly growing consumer economies. The Chinese and Indian governments and populations both agree that education—and particularly engineering—is critical to their future. Both China and India are leaders in sending their graduate students abroad, which has created a pool of well-trained nationals overseas who can advise their peers at home, or even return home themselves to set up new ventures. Many of these Chinese and Indian nationals have worked in U.S. sciences and engineering-based firms. Such professional experience, especially during the last two decades, has laid the basis for successful technology-based entrepreneurship, and the growth in VC that accompanies it.
When VC investing is viewed globally, U.S. dominance is unquestioned. In the United States, 30–35 percent of all VC-financed firms are located in the San Francisco Bay area. Another 10–12 percent are located in the Boston and New York areas, respectively. In India and China, VC investments are similarly concentrated, and generally occur in locations with the greatest concentrations of highly educated persons. As Table 1 indicates, the investment concentration is remarkable. Forty percent of all the VC-funded firms are located in Beijing, 26 percent are in Shanghai, and the Southern Chinese triangle of Shenzhen, Guangzhou, and Hong Kong accounts for another 14 percent. VC investment in China is even more concentrated than in the United States.
Table 1 VC Investments in China and India by City, 2004–2007
(more than 5 investments per city)
Chinese City Number of Firms Percent Indian City Number of Firms Percent
Beijing 213 40 Bangalore 55 38
Shanghai 137 26 Mumbai 31 21
Shenzhen 36 7 Chennai 21 14
Hong Kong 19 4 New Delhi 16 11
Guangzhou 16 3 Hyderabad 11 8
Hangzhou 13 2 Pune 8 5
Nanjing 11 2 n/a
Suzhou 9 2 n/a
Wuhan 7 1 n/a
Others 66 13 Others 4 3
Unknown 1 0 Unknown 0 0
Total 528 100 Total 146 100
Binational 9 2 Binational 45 31
VC-backed startups in India, though more diffuse in terms of the top six, are more concentrated overall. Three city regions—Bangalore (38 percent), Mumbai (21 percent), and Chennai (14 percent)—attract the largest investment. However, when including Delhi (11 percent), Hyderabad (8 percent), and Pune (5 percent), these six cities account for an even greater percentage of overall VC investment. The most technology-oriented cities in both nations, Beijing and Bangalore, have received approximately 40 percent of all VC investment. The second largest recipients are Shanghai and Mumbai, which are also the financial capitals.
In China, an enormous economy growing at nearly 10 percent per year even as it emerges from a socialist past, there are significant opportunities in infrastructure development and in supplying the burgeoning underserved consumer market. In a recent Ernst & Young report, Fan Zhang, one of the founding managing partners of Sequoia Capital China, was quoted as saying that “one of the factors that attracted Sequoia Capital to China is the country’s booming consumer market that provides an opportunity to create companies to define certain sectors and fill the need for strong brands, not only in technology but also tech-related consumer services and more traditional industries.”
Zhang is correct—VC investing in China does not directly compete with U.S. firms seeking VC investment. Table 2 shows the fields that VC firms are targeting in China. The table is divided into two binary categories—whether the firm receiving the investment targets the domestic or the global market across a variety of industries, and whether a given firm is in a high technology or non-high technology sector. Chinese firms, even those in technology-based fields, overwhelmingly target the domestic market (87 percent). The Internet has given rise to the largest number of VC startups, nearly all of which are focused on the Sinophone market. Two other key areas—software (10 percent) and mobile phone applications (10 percent)—also cater almost exclusively to the Chinese market. This domestic focus suggests that it will be quite some time before VC-backed Chinese firms threaten counterpart firms in the United States. A possible exception may be semiconductor design, where there are some Chinese startups. Though few Chinese VC-financed firms are likely to be directly competitive with U.S. firms in global markets, many of these Chinese firms compete ferociously against U.S. multinationals trying to make their own inroads into the Chinese domestic market.
Table 2 VC Investments in China and India by Sector and Market, 2004–2007
India China
Sector Domestic* Global Domestic ** Global
Semiconductors 0 7 22 20
Internet 16 3 144 2
Software 2 14 55 4
Communications 1 4 23 9
Services 4 53 28 9
Mobile phone 7 5 51 1
Media 2 0 35 0
Healthcare 1 4 26 4
Retail 1 1 19 0
Miscellaneous 2 0 20 2
Components 0 0 2 1
Energy 0 0 6 8
Environment 0 0 5 1
Manufacturing 0 0 25 6
Total 34 91 461 67
* Domestic firms are identified as those that made no apparent attempt to serve overseas markets.
The profile of Indian firms differs from those in China. First, Indian firms are internationally oriented (73 percent); only 27 percent focus on the domestic market. With respect to sector concentration, VC investing in India favors the services sector (46 percent) and software (13 percent). This is not surprising, given India’s well-known comparative advantage in these arenas. Unlike most VC-backed companies in China, many Indian firms may well create competition for U.S. service firms, despite the less developed nature of the Indian economy as a whole.
China and India continue to attract significant VC investment, albeit in different sectors. Today, China is second only to the United States in terms of VC investing, and this is unlikely to change. In China, the preponderance of VC investment is geared to the rapidly growing internal market. The size and unique nature of this market offers entrepreneurs lucrative opportunities to provide “knock-off” U.S. Internet sites for the Chinese market. There are Chinese interpretations of Yahoo!, Google, eBay, Facebook, and Monster.com that service Chinese customers. These firms are self-limited by the language; as such, they do not threaten companies overseas. Moreover, these Chinese companies do not own unique or global class technology that could challenge larger multinational players. It is unclear whether this situation will change over time.
Indian firms differ from Chinese firms in their strong outward orientation. In percentage terms, more Indian than Chinese firms operate in hard-core technology fields. Thus, while China currently enjoys greater VC investment, it is possible that Indian firms may ultimately play a bigger role in the global economy.
Leadership in Transition: Heterodox Pathways to Good Governance in Post-Suharto Indonesia
What makes some governments perform better than others? With rising levels of decentralization and local democracy, the focus of "good governance" is increasingly shifting from national to subnational levels. While much of the existing development literature remains preoccupied with formal institutional and society-centered explanations, there is growing evidence that local policy reforms are strongly affected by informal norms and elite-centered processes.
Post-Suharto Indonesia, a country with one of the most pronounced shifts to democratic decentralization anywhere in recent history, is a case in point. Drawing on empirical comparisons across ten districts (comprising 1000 business surveys and 150 interviews), Dr. von Luebke argues that societal pressures are often less significant in explaining policy differences than the quality of local government leadership. In the early transition to democracy, local firms, associations, and district councils continue to be constrained by collective action and political incentive problems. Local government leaders, on the other hand, have wielded historically strong formal and informal powers and stand, for better or worse, at the gateway to local policy reform. Motivated by direct elections and prospective donor funding, some district heads have become catalysts for better governance by introducing informal public-private dialogues, innovative monitoring instruments, and meritocratic promotion schemes. In response to current development debates, these findings highlight the importance of government leadership as an often underestimated policy determinant that can compensate for weak societal checks in periods of transition from authoritarian rule.
Christian von Luebke is completing a book manuscript titled “Heterodox Governance: The Political Economy of Local Policy Reform in Post-Suharto Indonesia.” He has been awarded a 2009-2011 German Science Foundation Fellowship for a follow-up project incorporating cases from the rest of Southeast Asia and China. In 2001-2006 he worked in rural Indonesia as a technical advisor for the World Bank and the German Development Agency. He holds a Ph.D. in public policy from the Crawford School of Economics and Government at the Australian National University.
Daniel and Nancy Okimoto Conference Room
Christian von Luebke
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
Christian von Luebke is a political economist with particular interest in democracy, governance, and development in Southeast Asia. He is currently working on a research project that gauges institutional and structural effects on political agency in post-Suharto Indonesia and the post-Marcos Philippines. During his German Research Foundation fellowship at Stanford he seeks to finalize a book manuscript on Indonesian governance and democracy and teach a course on contemporary Southeast Asian politics.
Before coming to Stanford, Dr. von Luebke was a research fellow at the Center of Global Political Economy at Waseda (Tokyo), the Institute for Developing Economies (Chiba), and the Center for Strategic and International Studies (Jakarta). He received a JSPS postdoctoral scholarship from the Japan Science Council and a PhD scholarship from the Australian National University.
Between 2001 and 2006, he worked as technical advisor in various parts of rural Indonesia - for both GTZ and the World Bank. In 2007, he joined an international research team at the Institute of Development Studies (IDS) analyzing the effects of public-private action on investment and growth.
Dr. von Luebke completed his Ph.D. in 2008 in Political Science at the Crawford School of Economics and Government, the Australian National University. He also holds a Masters in Economics and a B.A. in Business and Political Science from Muenster University.
His research on contemporary Indonesian politics, democratic governance, rural investment, and leadership has been published in the Bulletin of Indonesian Economic Studies, Contemporary Southeast Asian Affairs, Asian Economic Journal, and ISEAS. He regularly contributes political analyses on Southeast Asia to Oxford Analytica.
What is Left about the New Left in China?
A group of writers and academics in China in recent years have come to be known as the "New Left." But the range of views encompassed under this rubric is broad and seemingly contradictory. Many are critical of the inequality that has come from the market reforms; some seem to look fondly back on the Maoist system and even the Cultural Revolution, while others hold very different views, preferring to call themselves "critical intellectuals," who see a "Chinese alternative" to a neoliberal market economy. This panel will explore the range of views within this group loosely termed the "New Left," to understand what exactly the "New Left" is. How are these "New Left" views different from the Old Left? What are the implications of these views for China's political and economic reforms? Discussing these issues are Wang Hui, a central figure in the "New Left" in China, and David Kelly, a leading Western scholar on the subject.
Wang Hui is professor of Chinese language and literature at Tsinghua University and guest professor at Nankai University. In May 2008, he was named one of the world's top 100 public intellectuals by Foreign Policy magazine. His essays, commentary, and teaching examine the paradoxes of social change in modern and contemporary China. He was editor-in-chief of Dushu, China's leading intellectual journal.
David Kelly is Professor of Chinese Politics at the China Research Centre, University of Technology Sydney. Professor Kelly's work ranges widely across Chinese politics: intellectual history, especially of Marxism and liberalism; political sociology, mainly of intellectuals, urban homeowners and migrant workers; and public policy, focusing on the dilemmas of governance under turbulent current conditions.
Philippines Conference Room
Personnel Systems in Japanese Local Government
Human Resource Management (HRM) is a core element of any organization. This is especially true in public service organizations whose employees are often their most valuable resource. As an employee in a Japanese local government, Ichinomoto attempts to analyze the current problems in the personnel system that are severely criticized, to find a solution on how to develop more motivated government employees to provide efficient and customer satisfactory public service.
Mari Ichinomoto is a corporate affiliate visiting fellow at Shorenstein APARC for 2007-08 and 2008-09. She is also an official of the Industrial Recruitment and Location Division, Kumamoto Prefectural Government in Japan, with a mission to promote overseas direct investment into the country. Prior to this position, she was sent to Kumamoto trade promotion office in Singapore as a representative of the Kumamoto Prefectural Government dealing with trade promotion between Asia and Kumamoto. She graduated in foreign studies from Kitakyushu University.
Daniel and Nancy Okimoto Conference Room
Mari Ichinomoto
Mari Ichinomoto is a corporate affiliate visiting fellow at Shorenstein APARC for 2007-08 and 2008-09. She is also an official of the Industrial Recruitment and Location Division, Kumamoto Prefectural Government in Japan, with a mission to promote overseas direct investment into the country. Prior to this position, she was sent to Kumamoto trade promotion office in Singapore as a representative of the Kumamoto Prefectural Government dealing with trade promotion between Asia and Kumamoto. She graduated in foreign studies from Kitakyushu University.
Health Care Reform Under Progressive Governments in Korea; and Late Life Inequality in Health, Work, and Economic Resources in Korea
This seminar will feature two presentations: an attempt to evaluate the impact of health policy under a decade of progressive governments in Korea; and an investigation into the health and economic well-being of the elderly in Korea. The presenters will be Dr. Byongho Tchoe, a 2008-09 visiting scholar at Stanford University, and Dr. Young Kyung Do, the inaugural postdoctoral fellow in the Asia Health Policy Program at Stanford.
Korea achieved universal health care coverage in 1989 only twelve years after the introduction of social health insurance under an authoritarian government. In 1992 a civil government won the presidential election. Consistent with a conservative ideology oriented toward market principles and globalization, that government emphasized competitive principles in health care policy. However, at the end of 1997 in the face of economic crisis, the progressive party won the Korean presidential election; their health emphasized strengthening equity, redistribution, and regulation of providers’ rent seeking behavior. Under successive progressive governments from 1998 to 2007, ambitious health policy reforms integrated insurers, separated prescribing from dispensing, reformed provider payment, expanded benefits coverage, increased medical-aid enrollees, and increased the role of government providers in the health care market. But in the election of 2007, they were defeated by a conservative party, which insists that competition among insurers and providers will enhance efficiency and quality in health care, and stresses consumer choice and responsibility.
Dr. Tchoe's talk will attempt to evaluate impact of health care policy under a decade of progressive governments in Korea. Although equity in both access to care and financial responsibility appear to be enhanced, there is controversy about whether the policies were cost-effective or improved health, and what will happen as the new government repeals regulations in the health care market. The return of economic crisis also brings renewed urgency to debates of economic and social policy.
Byongho Tchoe is a 2008-09 visiting scholar at Stanford University. After working at the Korea Development Institute from 1983 to 1995, he took up his current post with the Korea Institute for Health and Social Affairs. He has been influential in formulating health and social policy in Korea, having served as an advisor to the minister of health and social welfare and participated in many task forces and committees. In 2007, he was awarded a National Medal in honor of 30 years achievement related to Korea’s National Health Insurance. He has published many articles and books and served as president of the Korean Association of Health Economics and Policy and as vice president of the Korea Association of Social Security. He holds a master’s degree in public policy from Seoul National University and a Ph.D. in economics from the University of Georgia.
Young Kyung Do is the inaugural Postdoctoral Fellow in Asia Health Policy Program at the Walter H. Shorenstein Asia-Pacific Research Center. He completed his Ph.D. in health policy and administration at the University of North Carolina at Chapel Hill School of Public Health in August 2008. He has also earned M.D. and Master of Public Health degrees from Seoul National University (in 1997 and 2003, respectively). He earned board certification in preventive medicine from the Korean Medical Association in 2004. He received the First Prize Award in the Graduate Student Paper Competition in the Korea Labor and Income Panel Study Conference in 2007. He also is the recipient of the Harry T. Phillips Award for Outstanding Teaching by a Doctoral Student from the UNC Department of Health Policy and Administration in 2007. In May 2008, he was selected as a New Investigator in Global Health by the Global Health Council.
Daniel and Nancy Okimoto Conference Room
Byongho Tchoe
Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055
Byongho Tchoe is a 2008-09 visiting scholar at Stanford University. He began his research career at the KDI (Korea Development Institute) which is a topnotch government think tank in Korea and served from 1983 to 1995. After earning his PhD in economics, he continued his research career at KIHASA (Korea Institute for Health and Social Affairs) from 1995 up to now.
He has always been an influential resource in formulating health and social policy in Korea, and served as an advisor to the minister of health and social welfare in 2000. He participated as a member of many task forces and committees for health and social policy making. He was awarded a National Medal for contributing 30 years achievement of National Health Insurance in 2007.
He was also active in academic society. He published many articles and books. He served as a president of Korean Association of Health Economics and Policy and a vice president of Korea Association of Social Security. He holds a master's degree in public policy from Seoul National University and a PhD in economics from the University of Georgia.
Young Kyung Do
Young Kyung Do is the inaugural Postdoctoral Fellow in the Asia Health Policy Program at the Walter H. Shorenstein Asia-Pacific Research Center. He completed his Ph.D. in health policy and administration at the University of North Carolina at Chapel Hill School of Public Health in August 2008. He has also earned M.D. and Master of Public Health degrees from Seoul National University (in 1997 and 2003, respectively). He earned board certification in preventive medicine from the Korean Medical Association in 2004. His research interests include population aging and health care, comparative health policy, health and development, quality of care, program evaluation, and quantitative methods in health research.
He received the First Prize Award in the Graduate Student Paper Competition in the Korea Labor and Income Panel Study Conference in 2007. He also is the recipient of the Harry T. Phillips Award for Outstanding Teaching by a Doctoral Student from the UNC Department of Health Policy and Administration in 2007. In May 2008, he was selected as a New Investigator in Global Health by the Global Health Council.