Fahimul Quadir, Jayant Lele - Democracy and Civil Society in Asia_ Volume 1_ Globalization, Democracy and Civil Society in Asia (International Political Economy) (2004) - libgen.lc-1

Democracy and Civil
Society in Asia: Volume 1

Globalization, Democracy and Civil
Society in Asia
Edited by
Fahimul Quadir and Jayant Lele
International Political Economy Series
General Editor: Timothy M. Shaw, Professor of Commonwealth Governance
and Development, and Director of the Institute of Commonwealth Studies,
School of Advanced Study, University of London
Titles include:
Pradeep Agrawal, Subir V. Gokarn, Veena Mishra, Kirit S. Parikh and Kunal Sen
POLICY REGIMES AND INDUSTRIAL COMPETITIVENESS
A Comparative Study of East Asia and India
Roderic Alley
THE UNITED NATIONS IN SOUTHEAST ASIA AND THE SOUTH PACIFIC
Dick Beason and Jason James
THE POLITICAL ECONOMY OF JAPANESE FINANCIAL MARKETS
Myths versus Reality
Mark Beeson
COMPETING CAPITALISMS
Australia, Japan and Economic Competition in Asia-Pacific
Deborah Bräutigam
CHINESE AID AND AFRICAN DEVELOPMENT
Exporting Green Revolution
Kenneth D. Bush
THE INTRA-GROUP DIMENSIONS OF ETHNIC CONFLICT IN SRI LANKA
Learning to Read between the Lines
Steve Chan, Cal Clark and Danny Lam (editors)
BEYOND THE DEVELOPMENTAL STATE
East Asia’s Political Economies Reconsidered
Abdul Rahman Embong
STATE-LED MODERNIZATION AND THE MIDDLE CLASS IN MALAYSIA
Dong-Sook Shin Gills
RURAL WOMEN AND TRIPLE EXPLOITATION IN KOREAN DEVELOPMENT
Jeffrey Henderson (editor)
INDUSTRIAL TRANSFORMATION IN EASTERN EUROPE IN THE LIGHT OF THE
EAST ASIAN EXPERIENCE
Takashi Inoguchi
GLOBAL CHANGE
A Japanese Perspective
Dominic Kelly
JAPAN AND THE RECONSTRUCTION OF EAST ASIA
L.H.M. Ling
POSTCOLONIAL INTERNATIONAL RELATIONS
Conquest and Desire between Asia and the West
Pierre P. Lizée
PEACE, POWER AND RESISTANCE IN CAMBODIA
Global Governance and the Failure of International Conflict Resolution
S. Javed Maswood
JAPAN IN CRISIS
Ananya Mukherjee Reed
PERSPECTIVES ON THE INDIAN CORPORATE ECONOMY
Exploring the Paradox of Profits
CORPORATE CAPITALISM IN CONTEMPORARY SOUTH ASIA (editor)
Conventional Wisdoms and South Asian Realities
Cecilia Ng
POSITIONING WOMEN IN MALAYSIA
Class and Gender in an Industrializing State
Fahimul Quadir and Jayant Lele (editors)
DEMOCRACY AND CIVIL SOCIETY IN ASIA: VOLUME 1
Globalization, Democracy amd Civil Society in Asia
DEMOCRACY AND CIVIL SOCIETY IN ASIA: VOLUME 2
Democratic Transitions and Social Movements in Asia
Mark Turner (editor)
CENTRAL–LOCAL RELATIONS IN ASIA-PACIFIC
Convergence and Divergence?
Fei-Ling Wang
INSTITUTIONS AND INSTITUTIONAL CHANGE IN CHINA
Premodernity and Modernization
International Political Economy Series

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Democracy and Civil
Society in Asia: Volume 1
Globalization, Democracy and Civil
Society in Asia
Edited by
Fahimul Quadir
York University
Toronto
Canada
and
Jayant Lele
Queen’s University
Kingston
Canada
Editorial matter and selection and chapter 1 © Fahimul Quadir and
Jayant Lele 2004
Remaining chapters © Palgrave Macmillan Ltd 2004
All rights reserved. No reproduction, copy or transmission of this
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First published 2004 by
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Library of Congress Cataloging-in-Publication Data
Democracy and civil society in Asia / edited by Fahimul Quadir and Jayant
Lele.
p. cm. – (International political economy series)
Includes bibliographical references and indexes.
Contents: v. 1. Globalization, democracy, and civil society in Asia –
v. 2. Democratic transitions and social movements in Asia.
ISBN 1–4039–1883–X (v. 1 : cloth) – ISBN 1–4039–1884–8 (v. 2 : cloth)
1. Democracy–Asia. 2. Civil society–Asia. 3. Globalization–Asia.
4. Asia–Economic conditions–1945- 5. Democratization–Asia. 6. Social
movements–Asia. I. Quadir, Fahimul. II. Lele, Jayant. III. International
political economy series (Palgrave Macmillan (Firm))
JQ36.D46 2004
320.95–dc22 2003062674
10 9 8 7 6 5 4 3 2 1
13 12 11 10 09 08 07 06 05 04
Printed and bound in Great Britain by
Antony Rowe Ltd, Chippenham and Eastbourne
Contents
Acknowledgements vii
List of Tables and Figure ix
List of Abbreviations x
Notes on the Contributors xii
1 Introduction: Globalization, Democracy and Civil Society after

the Financial Crisis of the 1990s 1
2 Discontents of Democracy: Elite Pluralism, Mystification

and Rule of Big Capital 13
Amiya Kumar Bagchi
3 Globalization, Economic Restructuring and the Implications

for Democracy in Developing Countries 29
Jayati Ghosh
4 Globalization, Economic Restructuring and the

Democratic Implications 56
William K. Tabb
5 Nation Against Democracy: The Rise of Cultural

Nationalism in Asia 81
Radhika Desai
6 Political Culture, Alternative Politics and Democracy in

Greater China 111
David Zweig
7 From Victimized Communities to Movement Powers and

Grassroots Democracy: The Case of the Assembly of
the Poor 140
Suthy Prasartset
8 Grassroots Democracy and Community Empowerment:

The Quest for Sustainable Poverty Reduction in Asia 182
Leonora C. Angeles
v
vi Contents
9 Civil Society and Good Governance: A New Chapter

in Thailand’s Political Reform? 213
Chantana Banpasirichote
Index 234
Acknowledgements
The central importance of the countries of Asia in the rapidly chang-

ing global political economy requires that their role in global change
and the impact of that change on the people of Asia be regularly
examined. The desire to contribute to such an examination led to the
conference ‘Democracy and Civil Society in Asia: The Emerging
Opportunities and challenges’ at Queen’s University in Canada in
August 2000. The conference brought together scholars from Asia
and North America to engage in presentations and exchange of ideas
around the central concern about challenges to and prospects for
democracy in Asia. The conference gave the scholars an opportunity
to focus on these central concerns and to bring to bear on them their
knowledge and experience of the enormous intellectual, political and
economic diversity of Asia.
This volume contains a selection of papers presented at the confer-
ence and subsequently revised for publication. The success of the con-
ference and the publication of this volume is a result of the support
from a number of institutions and individuals. Centre for the Study of
Democracy, then under the leadership of Professor George Perlin pro-
vided intellectual and financial support. Professor Steve Page, Professor
and Head of the Department of Political Studies was generous with his
support and Evelyn McCaugherty and Shirley Frazer were instrumental
in keeping the planning of the conference on track. Alex Choi and
Paritosh Kumar carried the enormous burden of planning and smooth
running of the conference and have made valuable intellectual contri-
butions to the project. They also helped establish and maintain
ongoing liaison with participating scholars, both before and after the
conference.
The editors would like to thank Roberta Parris, Program Secretary,
International Development Studies at York University for her superb
editorial support. We also acknowledge the contribution of three York
University students: Andrew Aziz, Hiba Masood and Noorjahan Pirani.
Their cheerful assistance enabled us to put together this manuscript.
The editors are grateful to Professor Timothy M. Shaw and Amanda
Watkins of Palgrave for their support and encouragement throughout
this project.
vii
viii Acknowledgements
Other colleagues, students and members of the staff in the

Department of Political Studies, including Sujata Ramachandran,
Dave Dorey, Lasha Tchantouridze and Youngwon Cho, took on
major responsibilities in the organization of the conference. Wendy
Erickson-Grey was, as always, generous in volunteering her time and
talent. Julie Hoffarth of Odyssey Travel went out of her way to find
ways to make the complex travel plans of the participants work suc-
cessfully. There were others, of course, whose support was crucial but
are far too numerous to mention here. Their contributions are also
greatly appreciated.
Fahimul Quadir
Jayant Lele
List of Tables and Figure
Tables
Table 3.1 Net Capital Inflow into Developing Countries 45
Table 8.1 Poverty Incidence in the Philippines 192
Table 8.2 Causes of Poverty and Required Interventions in
the Philippines, Summary of Various Studies 194
Table 9.1 A Synopsis of Thai Political History and
Dynamics of Civil Society 217
Table 9.2 Civic Groups and Good Governance in
Political Reform 226
Figure
Figure 6.1 The Distribution of Democratic Values in Rural
China, 1999 128
ix
List of Abbreviations
AAN Alternative Agricultural Network

ACPC Agricultural Credit Policy Council
ADB Asian Development Bank
AIDS Acquired Immune Deficiency Syndrome
AOP Assembly of the Poor
APPEND Alliance of Philippine Partners for Enterprise Development
APEC Asian Pacific Economic Cooperation
ASEAN Association of Southeast Asian Nations
BIS Bank for International Settlements
CCP Chinese Communist Party
CIDA Canadian International Development Agency
CP Communist Party
CPT Communist Party of Thailand
DAB Democratic Alliance for Betterment of Hong Kong
DECS Department of Education, Culture and Sports
DOF Department of Finance
DOH Department of Health
DOLE Department of Labour and Employment
DP Democratic Party
DPP Democratic Progressive Party
DSWD Department of Social Welfare and Development
DTI Department of Trade and Industry
EIA Environmental Impact Assessment
ESG-TU Economic Studies Group of Thammasat University
EU European Union
FDI Foreign Direct Investment
FIES Family Income and Expenditure Survey
FIO Forest Industry Organization
GATT General Agreement on Tariffs and Trade
GDP Gross Domestic Product
GFSME Guarantee Fund for Small and Medium Scale Enterprises
GNP Gross National Product
G7 Group of Seven
IFI International Financial Institution
ILO International Labour Organization
IMF International Monetary Fund
x
List of Abbreviations xi
LGC Local Government Code

MIT Malaysia, Indonesia, Thailand
M-M Modigliani-Miller
MNCs Multinational Corporations
MPs Members of Parliament
NAPC National Anti-Poverty Commission
NCCC National Counter-Corruption Commission
NCRFW National Commission on the Role of Filipino Women
NEC National Election Commission
NGO Non-governmental Organization
NHRC National Human Rights Commission
NICs Newly Industrialized Countries
NSO National Statistics Office
OECD Organization for Economic Cooperation and
Development
PDAP Philippine Development Assistant Program
PNET People’s Network for Elections
POs People’s Organization
PPSE Promoting Participation for Sustainable Enterprises
PRC Peoples Republic of China
SAPs Structural Adjustment Programmes
SFAN Small Farmers Assembly for the Northeast
SRA Social Reform Agenda
SBGFC Small Business Guarantee and Finance Corporation
UK United Kingdom
UNCTAD United Nations Conference on Trade and Development.
UNDP United Nations Development Programme
UNESCO United Nations Educational, Scientific and Cultural
Organization
UNRISD United Nations Research Institute for Social Development
USA United States of America
USAID United States Agency for International Development
USIP United States Institute of Peace
VC Villagers’ Committee
WCED World Commission on Environment and Development
WDR World Development Report
WHO World Health Organization
WTO World Trade Organization
Notes on the Contributors
Leonora Angeles is an Assistant Professor at the School of Community

and Regional Planning and the Women’s Studies Programme,
University of British Columbia. She is also a faculty research associate
at the Centre for Human Settlements, the Centre for Research on
Women’s Studies and Gender Relations, and the Centre for Research
on Southeast Asian Studies.
Amiya Kumar Bagchi is a renowned economist and historian. He has

taught and researched at Presidency College, Calcutta, University of
Cambridge, University of Calcutta, Cornell University, USA, University
of Bristol, UK, Maison des Sciences de l’Homme, Paris, Roskilde
University, Denmark and University of Naples, Italy. Formerly the
Director of the Centre for Studies in Social Sciences, Calcutta, he is an
RBI Professor of Economics at the Centre for Studies in Social Sciences
in Calcutta.
Chantana Banpasirichote is an Assistant Professor of Government, in

the Faculty of Political Science, at Chulalongkorn University, Bangkok,
Thailand. She teaches the politics of development, democracy and
development, political conflict and violence, and conflict resolutions
and non-state actors in policy process. Banpasirichote’s current research
interest is on development and conflicts, social impacts of dams, com-
munity resource management, state-civil society relations, and parti-
cipatory democracy. She is also serving as a Board member of a few
non-governmental organizations in Thailand.
Radhika Desai is an Associate Professor in the Department of Political
Science at the University of Victoria in Victoria, British Columbia,
Canada. She is the author of Intellectuals and Socialism: ‘Social Democrats
and the British Labour Party’ and Slouching Towards Ayodhya as well as a
number of articles in professional journals.
Jayati Ghosh is an Associate Professor at the Centre of Economic

Studies and Planning in the School of Social Sciences at Jawanharlal
Nehru University, India, where she also works with the Planning
Committee of the Indian Government. She also is a research fellow at
Cambridge University. She writes a regular current affairs column for
Frontline Magazine, as well as an economics column for The Economic
xii
Notes on the Contributors xiii
and Political Weekly. She sums up the last decade of her life as one
spent opposing the Policies of the International Monetary Fund.
Jayant Lele is Professor Emeritus at Queen’s University, Kingston,

Canada. He is the author/coauthor/editor of many articles and books
including, Tradition and Modernity in Bhakti Movements, Elite Pluralism
and Class Rule, Language and Society, Hindutva: The Emergence of the
Right, Unravelling the Asian Miracle, and Asia: Who Pays for Growth?
Suthy Prasartset is presently Associate Professor of Economics, at

Chulalongkorn University, Bangkok, Thailand. His current research
focuses on global political economy and social movements. He has
published a large number of books and articles in Thai, Japanese and
English. He is currently an adviser to Thailand’s Assembly for the Poor
and vice-chairperson of the Campaign for Popular Democracy.
Fahimul Quadir is an Assistant Professor of the Division of Social

Science and coordinator of the International Development Studies
Program at York University in Toronto. He taught Global Studies at
St. Lawrence University, Canton, New York, Political Studies at
Queen’s University, International Development Studies at Dalhousie
University and Political Science at the University of Chittagong,
Bangladesh. He has recently been published in Canadian Journal of
Development Studies, Contemporary South Asia, New Political Economy,
South Asian Studies, Hentz and Bøa[o]s (eds.), New and Critical Security
and Region, Mukherjee Reed (ed.), Corporate Capitalism in Contemporary
South Asia, Thomas and Wilkin (eds.), Globalization and the South, Gills
(ed.), Globalization and the Politics of Resistance and Poku and Pettiford
(eds.), Redefining the Third World. He also co-edited (with MacLean and
Shaw) a volume entitled Crises of Governance in Asia and Africa
(Ashgate, 2001).
William K. Tabb is Professor of economics and Professor of political

science at Queens college and Professor of political science at the
Graduate Center of the City of New York. He is the author of The
Postwar Japanese System: Cultural Economy and Economic Transformation
(1995) and Restructuring Political Economy: The Great Divide in Economic
Thought (1999).
David Zweig is Professor of Social Science at Hong Kong University of

Science and Technology. In 1999–2002, he taught in the Department
of Political Studies, Queen’s University. He is a political scientist
specializing in Chinese politics and political economy. He is the author
xiv Notes on the Contributors
of Agrarian Radicalism in China, 1968–1981 (1989), China’s Brain Drain

to the U.S. (1995), and Freeing China’s Farmers (1997). His most recent
book, Internationalizing China: Domestic Interests and Global Linkages
(2002), was published by Cornell University Press in the Cornell Series
in Political Economy, edited by Peter Katzenstein.
1
Introduction: Globalization,
Democracy and Civil Society after
the Financial Crisis of the 1990s
This volume brings together a group of scholars from various parts of

the world to explore the future of democracy and sustainable human
development in Asia. Its immediate focus is on the current process of
globalization, mainly economic and financial globalizations, and its
effects on the changing socio-economic landscape of the region. The
purpose is to see whether or not the decision of opening up the
economies in much of the region has created an opportunity for Asian
countries and communities to achieve the goals of democratic develop-
ment in the new millennium. This volume also takes a closer, critical
look at the Asian financial crisis of the late 1990s not only to offer an
analysis of why and how it happened, but also to assess the impact of
such an unanticipated crisis on both financial and political governance
of Asia. When the financial crisis hit the region, which exposed Asia’s
economic vulnerabilities to external shocks and pressures, there were
expectations among mainstream organizations and authors that the
crisis would lead to the creation of a much-desired political environ-
ment in which both democracy and human development would find a
rational, institutional expression. The hope was that the crisis would
force the state to give way to civil society that would come to play an
important role in establishing a more open structure of democratic
governance in the region. Asia is still struggling to realise such a vision.
In addition to identifying the key factors that appear to have
impeded the process of building a democratic, just social order in the
region, the authors of this volume explore an alternative agenda for
democratic development. They consider both the strengths and weak-
nesses of civil society to promote a different vision of democracy
and/or development that is grounded in the ideals of equality, justice,
1
2 Globalization, Democracy and Civil Society
empowerment, and participation. While the consensus is that civil

society is the domain for greater socio-political changes, the authors
explain the difficulty that societal groups face to assert popular control
over the decision-making process. Most of the authors in this volume
therefore express cautious optimism as to the future of democratic
governance in Asia in the twenty-first century.
Deconstructing the myths of globalization
At the heart of this volume is an analysis of economic globalization

that not only called into question the so-called notion of ‘Asian
miracle’ (World Bank 1993), but also posed a formidable challenge to
the ability of Asian countries to maintain their autonomy vis-à-vis the
International Financial Institutions (IFIs). While globalization means
different things to different people, most authors in this volume,
including Amiya Kumar Bagchi, Jayati Ghosh, and William Tabb, view
globalization as a process of expanding capitalist relations and institu-
tions across national geographical boundaries. This involves the
restructuring of the entire mechanism of production, finance and dis-
tribution on the principles of a market economy. It requires countries
around the world to undertake wide-ranging economic reform policies
that focus primarily on redefining the role of the state in national eco-
nomic development, freeing the private sector from the grip of the
state, liberalizing the trade and exchange rate regimes, and allowing
the private sector to emerge as a key actor in decision-making.
This process of developing a pure market-oriented structure of
national and global economic governance, as Bagchi and Ghosh
explain, has further contributed to the growing inequalities between
and within nations in different parts of the world, including Asia. With
empirical evidence, they demonstrate that only a few selected countries
and communities have been able to actively participate in the process of
globalization and benefit from it. A vast majority of the countries in the
South have witnessed a clear decline in their living standards in the last
two decades. The recent Human Development Report (UNDP 2003)
confirms that some 54 countries are poorer now than they were in
1990. It shows how the inability of many Southern countries to focus
on human development concerns has negatively affected their desire to
make a dent on the poverty conditions. In 21 countries, a large number
of people simply can’t put food on the table twice a day. Life
expectancy has fallen in 34 countries while more children now die from
hunger and related diseases before they celebrate their 5th birthday
Fahimul Quadir and Jayant Lele 3
(UNDP 2003). The irony is that, although a few developing countries

appeared to have made some progress in both restoring macro-
economic balance, and accelerating higher levels of growth through the
implementation of market reform programs, these economic achieve-
ments have hardly made any positive impact on the human conditions
in much of the South.1 Most official aid agencies, including the UN,
now admit that economic liberalization programs sponsored by the IFIs
have left behind a vast majority of marginalized groups, mainly the
poor who were hit hard by the retreat of the state (UNRISD 1995). The
absence of an effective safety network has made it almost impossible for
a large number of people to access various essential socio-economic ser-
vices – from heath care to education – that used to be provided by the
state. Many of these services are currently available for purchase at a
market value that most poor simply cannot afford.
The authors of this volume, especially Bagchi, Ghosh, and Tabb,
identify the inherent contradictions of the contemporary process of
building a global structure of capitalism. Ghosh calls into question the
commonly held assumption that economic globalization would set in
motion the free flow of capital across national boundaries, thus allow-
ing the developing world to bridge the growing gaps between their
domestic savings and investment requirements. The belief is that, once
the trade and monetary regimes are liberalized, private capital will flow
into the South to help them attain higher levels of economic growth.
However, the recent trends in foreign direct investment (FDI) disputes
such a thesis. What most developing countries find extremely frustrat-
ing is that the flow of private FDI has remained concentrated into the
hands of a few so-called newly industrialized countries (NICs) of Asia
and Latin America (UN 1998). As Ghosh demonstrates in her chapter,
between 1990 and 1997, only 10 NICs were actually able to take
advantage of the free flow of capital which received some 75 per cent
of the total FDI that went into the developing world. The tragic events
of September 11 made the whole situation even worse. Private capital
flows have fallen sharply since the incidents of September 11. In Asia,
for instance, the flows of FDI sharply dropped from $134 billion in
2000 to $102 in 2001, setting a negative trend in the flow of net capital
from the North to the South (UNCTAD 2002). Contrary to the opti-
mism expressed by mainstream policy-makers, the developing coun-
tries have continued to witness a negative resource transfer since 1996.
In other words, they transferred more capital to the North than they
received from the industrialized world in the last several years (Ghosh
2003: 2).
Apart from generating and/or perpetuating inequalities, liberaliz-

ation programs also appeared to have undermined both the political
and financial viability of states and commercial institutions, includ-
ing private companies, corporations, and banks, in Asia. As analysed
by Tabb in his chapter, Asia’s decision to create a healthy market
mechanism allowed transnational forces of production and finance to
move capital freely across national territorial boundaries. Given that
there was no real restriction put in place in much of the region,
foreign companies and corporations were able to bring in short-term
capital for investment in East and Southeast Asia. While their pres-
ence had generated a wave of optimism among investors in corrup-
tion-ridden economies of the region, the sudden departure of foreign
private capital made the region completely vulnerable to external
shocks, contributing to the collapse of indigenous currencies in many
parts of the region in 1997.
The introduction of liberalization programs also paved the way for
private companies to establish their dominance over the decision-
making processes which used to be controlled by the semi-authoritarian
states in East Asia. By taking advantage of the prevailing culture of pat-
rimonialism, nepotism, and cronyism, private corporations were able to
quickly (re)establish unholy alliances with the state that prevented a
number of Asian governments, including the Thai and South Korean
regimes, from sharing the real picture of the economy with their own
people. In most cases, as Tabb finds in his research, people were not
alerted to the deepening crisis of the economy, leaving ordinary citizens
in the dark. The financial crisis of the late 1990s, then, took the region
by surprise. People were simply not prepared to deal with such a huge
crisis that profoundly affected their lives and livelihoods.
The financial crisis of the 1990s and the ‘push’ for

democracy
The recent resurgence of the modernization paradigm reinforces a

complementary dynamic between economic reforms and political
democratization. Drawing upon the arguments once presented by
Schumpeter (1950) and Lipset (1959), neo-modernizationists are now
claiming that market-oriented reform programs contribute to the
creation of a political framework for democratic governance. The belief
is that the introduction of a competitive market mechanism would
generate political pressures for democratization. It is expected that the
need to ensure greater competition among diverse socio-political
groups would force authoritarian regimes to develop an open, transpar-

ent, and participatory form of political governance (Huntington 1991
and Prezeworski 1991).
Such an understanding of the mutually dynamic relationship
between economic and political reforms has also been manifested in
the newly developed aid paradigm called ‘good governance’ through
which official aid agencies are now offering assistance to the develop-
ing world in constructing liberal, pluralist democracy. The World Bank,
for instance, officially acknowledged the linkage between market capi-
talism and democracy by publishing its first major revisionist analysis
in 1989, Sub-Saharan Africa: from crisis to sustainable growth (World
Bank 1989). In this document, the Bank claims that the crisis of
governance is the major cause for continued underdevelopment and
growing poverty in the developing world, in general and in Africa, in
particular. The document calls for an immediate improvement in the
structures of development management in the South. The Bank
believes that without helping the developing world to create a political
system that promotes such notions as participation, accountability and
transparency, the goal of equitable growth is unlikely to be achieved. It
therefore devises a concrete plan to offer technical and financial assis-
tance to developing nations in order to create what it calls ‘an enabling
environment for sustainable and equitable growth’ (World Bank 1992:
3 & 10). The expectation is that this framework of governance will
ensure more productive use of development resources (World Bank
1994).
While the non-political mandate makes it a bit difficult for the
Bank to use the notion of governance as a means to promote such
concepts as democratization and human rights, a vast majority of
donor countries and agencies have already used good governance
programs to export liberal political and social philosophy. In order
to support the movements for democracy in the developing world,
many official aid agencies have already widened the definition of
governance by incorporating a variety of political issues, including
civil society, freedoms of speech, religion and expression, the rule of
law and free and fair elections (Islam & Morrison 1996). The
Canadian government, for instance, views good governance as a
framework for implementing broader socio-political programs that
are designed to give both democracy and development a chance to
survive (Schmitz 1995). Similarly, when providing aid, the US,
British, German, and Swedish governments are now attaching more
importance to undertaking programs that are directly aimed at the
promotion of democracy and the strengthening of associational life

(Robinson 1995).
The authors of this volume, especially Lenora Angeles and Chantana
Banpasirichote, seek to shed light on how pro-market reforms created
the push for democracy in the rapidly changing context of Southeast
Asia. In her chapter, Banpasirichote establishes a direct link between
the financial crisis of the 1990s and the movement for constitutional
democracy in Thailand in the late 1990s. She explains how the crisis
brought together groups with diverse, often contradictory, interests to
forge strategic coalitions to fight for democracy. These socio-political
groups were able to use the political space created by the financial crisis
to question what she calls ‘bad politics’ in Thailand. By conveniently
appropriating the discourse of governance and civil society, they chal-
lenged the state’s desire to maintain its hegemonic control over the
decision-making process. This movement reached its peak when NGOs
and the new middle class of the ‘Miracle Era’ decided to actively parti-
cipate in it. Their involvement eventually contributed to the adoption
of a new constitution in 1997, making the state more responsive to
popular concerns in Thailand.
David Zweig’s comparative analysis takes the issue of democratiza-
tion beyond local pro-democracy actors. His case study of political atti-
tudes and participation in mainland China, Hong Kong, and Taiwan
offers an insight into the role of the international community in
pushing the demand for democracy. He assesses the role of democratic
values and political structures in the likely choice by citizens in alter-
native vs. formal forms of politics. Zweig presents results of comparative
and discrete survey data from the three Chinas, on interest and par-
ticipation in as well as attitudes towards politics, attention to public
affairs and the frequency of public meetings. His study finds that inter-
national pressures contributed, with varying degrees, to the choice of
the forms of democracy embraced in these three countries.
Is civil society a panacea?
The concept of ‘civil society’ has recently come into sharper focus as
most analysts, policy-makers and activists now claim that societal
groups are central to the creation of a democratic political culture
(Ottaway and Carothers 2000). Although the term has received wide-
spread support from across the philosophical spectrum, the definition
of civil society still remains a subject of major controversy among
academics and activists. In mainstream literature, civil society is
defined as the ensemble of private, non-state organizations working

independently of the state for the protection and advancement of
citizen’s rights, freedoms and interests (Bernhard 1993). Focusing on
the dichotomy between the state and civil society, liberal authors often
see it as an arena or political space outside of the state (Wood 1990:
60–64). They view civil society as the centre of opposition to all kinds
of arbitrary rule, including military dictatorship, authoritarianism, and
totalitarianism. Gelner, for instance, refers to civil society as a:
set of non-governmental institutions which is strong enough to

counterbalance the state and, while not preventing the state from
fulfilling its role of the keeper of the peace and arbitrator between
major interests, can nevertheless prevent it from dominating and
atomising the rest of society (Gelner 1994: 5).
The primary purpose of a vibrant civil society is to ensure that govern-

mental authority is exercised on the basis of popular acceptance
(Bratton 1994: 59). In other words, civil associations explore ways to
keep a check on state power, making sure that the state does its job
properly (Christenson 1994: 724). They act collectively, as Diamond
claims, ‘to express their interests, passions, and ideas, exchange in-
formation, achieve mutual goals, make demands on the state, and hold
state officials accountable’ (Diamond 1994: 5–7). Another major object-
ive of civil society is to promote individual rights and freedoms.
Considering the liberation of civil society from the control of the
state as a prerequisite for the construction of both liberal democracy
and free markets, an increasing number of donor organizations are
placing greater emphasis on programs that aim to strengthen civil
society. Likewise, many Southern organizations, mainly NGOs, are also
describing their work in civil society terms and are claiming that they
are facilitating groups in civil society to work together for the promo-
tion of democracy and development both at the local and national
levels (Blair 1997: 31). A considerable amount of donor money is cur-
rently directed to the creation of civil society networks, which are
expected to assume a greater responsibility for promoting liberal
democracy and free markets throughout the world. The hope is that, in
addition to forcing authoritarian regimes to embark upon democratiza-
tion initiatives, these networks of private associations will play a
crucial role in widening political participation, deepening govern-
mental accountability, promoting democratic citizenship and support-
ing market liberalization initiatives (Diamond 1994).
Much has been written about the enormous diversity of meanings

and contents that get attributed to the concept of civil society.
However the underside of this conception rarely finds a place in the
mainstream discussion about its origin, its significance and its demo-
cratic credentials. Radhika Desai’s chapter in this volume explores an
important aspect of this underside, the relation between democracy
and the cultural nationalisms that have grown in Asia under condi-
tions of globalization.
The analysis presented in this volume goes beyond this liberal
approach to civil society. Drawing upon the Gramscian perspective,2
Lenora Angeles, Chantana Banpasirichote, and Suthy Prasartset show
that the democratic potential of civil society in the region is more
limited than is widely assumed. Both Angeles and Banpasirichote
question the ability of civil society groups to insist on their auto-
nomy vis-à-vis both the state and market in East and Southeast Asia.
Many of these organizations contain neo-conservative and neo-
liberal elements that put a direct limit on their ability to successfully
protect popular interest. Banpasirichote’s research also identifies a
clear link between civil associations, the government, and big busi-
ness. The traditional reliance of the voluntary sector on government,
business, and religious organizations for financial support con-
tributes to the continuing inability of civil society groups to actively
pursue an agenda for democracy and human development. A vast
majority of these groups have used the notions of good governance
and civil society so as to advance their own interests. Banpasirichote
concludes that political reform, in which the grassroots movements,
such as the Assembly of the Poor (AOP), will find their own space, is
going to be long and incremental.
Going beyond constitutional democracy: the future of

democratic governance in Asia
Most authors in this volume emphasize the need for the region to go
beyond the discourse of constitutional democracy, as they argue that
liberal democracy is unlikely to set the stage for human progress and
prosperity in Asia. In the presence of greater inequalities, Tabb
reminds us, procedural democracy cannot offer any real optimism
about introducing a political system that is motivated by the goals of
equality, justice, human development, and participation. The analyses
of this volume point to the growing evidence that a transition to
democracy does not necessarily guarantee the creation of political
institutions that allow people to determine their own future. It is

evident that the functions of constitutional democracy are rather
limited primarily to the holding of periodic elections and resolving
socio-political conflicts through existing political institutions.3 Recent
political histories of a number of countries in Asia, including
Bangladesh, Pakistan, the Philippines, and Thailand clearly illuminate
the failure of constitutional democracy to bring about the necessary
political changes that are essential to ensure political freedom and
material prosperity for the majority. In most cases, popularly elected
regimes have only paid lip service to democracy. The so-called demo-
cratic regimes in these countries have continued to rely on practices
that are essentially ‘authoritarian’.
What therefore is needed for the region is to explore an alternative
route to democracy and development. The purpose of this alternative
route would be to create a political space in which voluntary organi-
zations and civil society groups will work together to promote the
values and goals of democratic governance. Strong emphasis will be
given to the maintenance of an autonomous space for civil society so
that societal groups can resist the process of co-optation either by the
state or the market. Efforts will also be made, as Angeles explains, to
hold governmental institutions accountable to the people for all of
their actions. A participatory structure of governance is expected to
give communities the power needed to establish their control over
the socio-political institutions that profoundly affect their lives and
livelihoods.
Such a vision of democracy and development has already begun to
take root in different parts of the region, including Bangladesh, the
Philippines and Thailand. In his chapter, Suthy Prasartset shows how
grassroots movements in Thailand have acted as a countervailing
power to both the state and big business. In addition to challenging
the programs and policies of the state that often served the interests of
a small group of political and financial elites, these movements for
democratic development have managed to develop strategic alliances
with like-minded groups that transcend religious, ethnic, political, and
economic divides. He explains the success of the AOP, which emerged
as a response to the failure of state sponsored growth-led development
agendas, in forging a trans-class coalition to promote the goals of
participatory development.
What is interesting is that the signs of the emergence of such non-
partisan, autonomous civil society networks can be seen in almost
every single corner of Asia. Popular organizations are now making
an effort to bring marginalized groups together to form powerful

trans-border coalitions of civil society to defend peace, human
security, and sustainable democratic development in the region.
Suggesting that collective action has no practical alternative, the vol-
untary sector is devoting itself to the creation of trans-national civil
society networks simply to give both democracy and development a
new meaning. If this current trend continues and if the voluntary
sector can manage to maintain its autonomy vis-à-vis both the state
and the market, Asia is likely to witness the development of a new
socio-political order where the emphasis is going to be placed, not so
much on the free movement of capital, but rather on efforts to free
the continent from poverty, discrimination, and exploitation.
Notes
1 Although many African and Latin American nations are still trapped in a low
growth cycle, countries in Asia have managed to grow at around 5 per cent a
year due to the growth in domestic demand and the rapid expansion of the
service sector (Ghosh 2003).
2 Unlike the liberal approach, the critical perspective does not proceed from
the distinction between the state and civil society. Although it does admit
that civil society may exist in opposition to the state, it rejects the thesis
that the state is the primary source of oppression and exploitation.
Gramsci’s civil society is composed of those long-lasting institutions that
are neither part of the material basis of society, nor of the state machinery.
These organizations are engaged in developing what is called ‘the moral and
intellectual leadership’. Some of the examples of such organizations would
be voluntary associations, educational institutions, the media, religious
institutions and organizations, professional groups and cultural associations
(Bocock 1986: 33–34). Many of these ‘social’ associations are very much
engaged in a complex set of power struggles, where they often compete
with each other for the creation and maintenance of hegemony (Kumar
1993; Simon 1982). Such an understanding of civil society not only calls
into question the liberal distinction between the state and civil society, but
also challenges the assumption that civil society is the site of democratic
and egalitarian relationships.
3 Important to mention is that democratically elected regimes often refuse to
put a constitutional limit on the use of state power necessary to protect and
promote basic human rights. Instead of allowing democratic institutions
such as the parliament and judiciary to play any meaningful role in repre-
senting popular interests, they tend to exercise a form of personal rule giving
the rise of what Zakaria (1997) calls ‘illiberal democracy’.
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Harbeson et al., eds., Civil Society and the State in Africa, Boulder, CO: Lynne
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Law’, Human Rights Quarterly 19(4): 724–737.
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Penguin Books.
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2
Discontents of Democracy: Elite
Pluralism, Mystification and Rule
of Big Capital
Amiya Kumar Bagchi
Elite rule, class rule, and elite pluralism in India
Marxist scholars have grappled with the nature of the state and the
basis of governance in a society deeply scarred by divisions of class,
caste, ethnicity and religious affiliation.1 Democracy as a possible and
desirable form of organization of the government of state had been put
forward by Rousseau, Paine, Mary Wollstonecraft, Condorcet and
William Godwin. In England, the so-called Philosophical Radicals,
Ricardian Socialists, the Chartists and John Stuart Mill added to the lit-
erature on democracy. In France and Germany, the work of Alexis de
Tocqueville, early socialists such as Louis Blanc and the Fourierists,
Moses Hess, and of course, Marx and Engels enriched the understand-
ing of how democracy could and should function. Tocqueville
accepted democracy with resignation rather than with enthusiasm, but
was nonetheless an insightful pioneer in its conceptualization. The
ruling strata in the European countries came to accept some version of
democracy as a necessary evil, to be tolerated and even advanced at
times in order to appease the discontent of the masses and contain the
possibility of their revolt.
However, along with theorists of democracy, there were theorists
who wanted to preserve a hierarchical social order with democracy if
possible, and without it if necessary. Drawing on both the memory of
feudal Europe and on the scientism of Saint Simon and his adherents,
Auguste Comte put forward the vision of a society which would be
governed by an educated elite and ensure ‘order and progress’. By the
last quarter of the nineteenth century, a new crop of theorists existed
who put forward the thesis that the fate of the majority of mankind
13
14 Discontents of Democracy
was to be governed by a minority. The thrust of their critique was

directed most powerfully against the vision of the socialists but also
against political theorists who wanted democracy to assure substantive
freedoms to the people and their active participation in government.
Perhaps the three most prominent theorists of this broad anti-
democratic, anti-socialist school were Vilfred Pareto (1986), Gaetano
Mosca (1939) and Robert Michels (1949).
Pareto put forward the hypothesis that all goods and resources in
every known society are distributed unequally according to a statistical
function which has come to be known as the ‘Pareto distribution’. This
law of inequality of distribution applies also to ability, intellect, and
political power. However, he had no theory to explain why and how
the distribution of wealth, power or prestige is cut off at a particular
point and the ‘haves’ above that threshold form the governing minor-
ity and the ‘have-nots’, the subjugated majority.
This is where Mosca made his entry with the idea of a political
class. The political class is a subset of the governing class: it special-
izes in politics and utilizes a political formula to organize itself. The
political formula, ironically enough, can be said to be a development
of Marx’s formulation that the ruling ideology of a society is gener-
ally the ideology of the ruling class, and an anticipation of the
Gramscian formulation that a successful ruling class has to exercise
ideological hegemony over the general populace. Mosca also pro-
vided an incisive critique of US democracy, which has long been
taken as the most successful example of a working democracy. He
brought out, for example, the power of money and manipulation of
opinion in the USA, and a high degree of continuance of political
power within the same ruling group.
Robert Michels focused on the proliferation of bureaucracy within
those social democratic parties of Europe of the 1920s that had taken
part in the actual running of affairs in central governments, prefectures
and municipalities. Building on the work of his predecessors, he saw
political parties themselves being ruled by a few party functionaries,
and democracy being the resultant rule of the few powerful men who
emerged out of the competition and compromises between these polit-
ical parties. It can be seen in the words of Joseph Schumpeter (1947)
that under procedural democracy the people select rulers rather than
principles of governance. This view sat comfortably with his vision of
capitalism as a world ruled by oligopolistic firms.
Against this model of elite rule, several theorists of American demo-
cracy put forward the vision of a democratic polity being associated
Amiya Kumar Bagchi 15
with a pluralist society. In such a society, interests and cultures would

compete with one another and procedural rules would guarantee that
these interests and cultural values would find a place in actual patterns
of governance. However, these theorists of pluralism could not actually
demonstrate that the members of the groups which were supposed to
espouse different interests and cultures would have an equal chance of
representation in the body politic, and that power would not gravitate
towards a small elite.2
In India, there was a caste-based pluralism before the advent of inde-
pendence and democracy. The Hindu-Brahmanical social order defined
a rough hierarchy of castes but all the castes could go about their busi-
ness unhindered so long as they accepted their place in the caste and
social hierarchy. Looking back it would seem that any political scientist
studying India would recognize a model of caste-based pluralism as the
homologue of elitist. Myron Weiner, and others following him, came
to regard castes as abiding formations and the building blocks of
Indian democracy. But they regarded the castes as somehow closed
groups, and did not see that class rule was mediated through castes and
their shifting alliances.
It is useful here to glance briefly at the obstacles that the conven-
tional courses offered in Indian universities on political theory and
practice created for a proper appreciation of the role that elitism and
class rule played in maintaining the stability of formal democracy in
independent India. Much of the nineteenth and early twentieth-
century theories on democracy in mainstream political science courses
in my undergraduate days were silent about the interaction between
the civil society and the organs of state in a democracy. The simple
question, ‘How does democracy work?’ remained unanswered in most
textbooks. John Stuart Mill’s ‘Representative Government’ was more of
a cautionary tale to avoid the dangers of an uninformed majority
rather than a guide as to how the wishes of the majority should be
reflected in political decisions. For understanding the working of the
highest level of the state, the Marxists appealed to Lenin’s ‘State and
Revolution’. However, this proved to be a handbook for a revolution-
ary party in a society with an old-style, pre-democratic, authoritarian
government rather than a guide to the working of a state with a for-
mally democratic apparatus of rule, or the modus operand of a radical
party in a deeply unequal society but with a formally democratic gov-
ernment. As mentioned earlier, the theories that sprang up to fill this
void were mostly theories of oligarchy or theories of dominance by the
elite in a so-called pluralistic society.
In the nineteenth-century era of British liberalism, we learned about

the supreme goal of advancing individual utility or, in a Mill-Green-
Hobhouse extension, individual welfare. We also learned about the
need to pursue politics in terms of values that would transcend indi-
vidual self-interest. How those values would find expression in a
system where political parties ultimately have to consult the self-
interest of their electoral supporters was never made clear. Into that
vacuum entered the Mosca-Michels theory of parties inevitably grav-
itating towards an oligarchic formation. Individual interests could only
be aggregated in parties with a centralized leadership and competition
between such parties would result in an oligarchic conducted polity. A
variation on this theme was provided by the theory of competition
between interest groups. Interest groups would form their own parties
or their own causes in large party formations, and the pluralism of
such parties or formations would guarantee the pluralistic character of
the governance structure and hence protect the pluralism of the civil
society.
A further twist to this line of argument was provided by Joseph
Schumpeter, Anthony Downs, and following them, the Virginia-
Chicago School of Political Economy and Public Choice (Mueller 1989:
chapters 10–12). It was claimed that electors do not choose policy
packages rather they only choose policymakers. The chosen rulers are
entrusted with the task of representing the interests of the electors.
Policy-makers pursue their own agenda and often implement policies
that are contrary to the interests or wishes of the people they are
meant to represent. There are two kinds of protection available for this
situation. The first is to devise incentive mechanisms that will lead the
electors and the policy-makers to stick to the most suitable course of
action, which was defined by the economists implicitly, or explicitly,
to be one guiding the economy to a Pareto-efficient equilibrium. The
second type of precaution is to simply minimize the scope of public
action in the first place. Even in situations characterized by externali-
ties, that is, by an essential interdependence between the outcomes of
actions of two agents acting independently, the state need not inter-
vene: bargaining between the two agents will lead to a solution that
approximates a Pareto-efficient outcome (Coase 1960).
I wrote an extended critique of Myron Weiner’s ‘Politics of Scarcity’
(Bagchi 1964/1995). My critique was primarily normative, but it also
had a component that challenged the empirical validity of Weiner’s
construct. In concentrating on group interests driving politics in India,
Weiner did not succeed in demonstrating how individual interests
were represented in group interests. Moreover, he ignored the issue

of public goods – the kind of entity that had been the staple of earlier
theories of civic virtue and liberalism – and the question of class
interest.
In this chapter, I have distinguished between several varieties of
pluralism, or in a slight displacement and translation, multicultural-
ism. These varieties include elite pluralism in a procedural democracy,
elite pluralism in an authoritarian state, egalitarian pluralism in a
democratic state, and egalitarian pluralism in an authoritarian state.
The pluralism or multiculturalism which was characteristic of, say
Mughal India, Kashmir under Zain-ul-Abidin (1420–1470 C.E.) or
Bengal during the reign of Husain Shah and Nusrat Shah (1493–1532
C.E.) was elite pluralism in an authoritarian state (Majumdar et al.
1978: 395–401, 571, 577). Different faiths and cultures were tolerated
and often actually patronized on condition that adherents of those
faiths or practitioners of those cultures were known to be loyal to the
ruler.
Lele (1981) demonstrates how in a formally democratic state like
India, elites base their power on the control of material assets such as
land, industrial and mercantile capital and cultural assets such as mem-
bership of a dominant caste, and then use this control to exercise polit-
ical power. Through the exercise of that power they accumulate further
material assets and greater political influence. In India caste is only
one, though in many cases, the most important marker, used for class
manipulation. Power brokers and power-wielders across caste bound-
aries incorporate leaders of other castes and kinship networks into
their power bases.
Global elite pluralism, political strategies and market

strategies of exclusion and tropes of popular and elite
resistance in contemporary Asia
We move to a different register when we take up questions of civil

society and democracy in Asia. In many ways, if Bombay is a metaphor
for modern India, then modern India is a metaphor for the whole
world. The governance pattern of the world is a criss-cross of authori-
tarian, elite multiculturalism, democratic multiculturalism, elite multi-
culturalism, and egalitarian multiculturalism in an authoritarian state.
This classification does not reveal the dynamics of civil society and
democracy in Asia or in the world. In order to grasp that, we have to
scrutinize three processes working simultaneously: deliberate strategies
of exclusion on the basis of ethnicity or other ascribed stigmata

(analysed, for example, by Taylor, 1997), exclusion effected by market
processes, and heightened insecurity of ordinary people in an increas-
ingly privatized world. The security of health and life is further endan-
gered by the global political economy of agriculture under which, on
the one hand, the Washington twins (The World Bank and the
International Monetary Fund), in combination with their terrible and
dictatorial little sister in Geneva (the World Trade Organization) are
pushing the total liberalization of trade and finance down the throats
of the developing countries, and on the other hand, the G-7 countries
continue to subsidize their agriculture at a rate which has not even
been approached by all the developing countries taken together (for a
short analysis of the inconsistencies of the WTO agreement, see Das
1998). A global food surplus pulls down the prices of farmers in poor
countries even as tens of millions of people cannot buy enough food
for their minimum nutritional requirements (Sen 1999).
In many developing countries, such as India, the poor go hungry,
even as food stocks pile up in government and private storehouses, as
the public distribution system is pared down in the name of market
efficiency (Hopper 1999; Swaminathan 2000). The cruel irony of the
situation was perhaps best brought out in a cartoon by R.K. Laxman,
India’s leading cartoonist in the Times of India, on November 4, 2000.
This showed a subordinate in a warehouse of the Food Corporation of
India frantically informing his boss: ‘Not an inch of space left, sir. If
another lot comes, we will be left with no choice, but to distribute it
among the poor, and the hungry’.
Let me recapitulate very quickly some of the characteristics of the
global economy that have become evident in the 1990s. First, almost
without any exception, all countries have experienced an enormous
increase in income and wealth inequality (see the summary and refer-
ences in UNCTAD 1997; UNDP 1999). Second, the vulnerability of
ordinary people with respect to fluctuations in incomes earned has
increased in many countries, especially of Latin America, Africa and
South and West Asia (UNRISD 1995; UNDP 1999). Third, the volatility
of financial markets that had been mainly confined to Latin America
has spread to Asia and the ex-Soviet countries as well. Fourthly, money
laundering and earnings from the drug trade have reached a historic
high (Laniel 1999). The production of crops yielding the drugs has
come to provide subsistence to a major fraction of the poor in coun-
tries like Colombia, Ecuador, Myanmar, and Afghanistan, which have
been devastated by civil wars and/or policies of structural adjustment.
Fifthly, armed conflict between warring states or claimants to state

power have become endemic in Southeast Europe, many sub-Saharan
African countries, South Asia and Afghanistan. Connected with the last
development, sectarian conflict has become more open and taken
more violent forms in many countries. Finally, covering all these devel-
opments and managerially involved in provoking conflicts and mediat-
ing them has been the role of the global rich who sought to free capital
from all social control even as they sought to impose ever more oppres-
sive shackles on the freedom of labour to manoeuvre (Bagchi 2000; ILO
2000).
Soon after the French Revolution held aloft the banner of ‘Liberty,
equality and fraternity’, fraternity was dropped from the vocabulary of
bourgeois democratic politics. Sorority never found a place in that con-
ception of a male-dominated political sphere: women were relegated to
the status of passive citizens. But fraternity was often used in struggles
of resistance against imperial aggression and of liberation from that
rule. The imperialists themselves used the supposed fraternity of the
conquered groups to impose a little big brother working in tandem
with the imperial Big Brother. Communitarianism served as cogs in the
machine of imperial governance in Spanish-ruled America, British-
ruled India, Dutch-ruled Indonesia, and Africa under formal European
rule. Now again, the ruling elites in many countries are using commu-
nities as easily manipulable aggregates, and the values of community
are often being preached from the media capital of the world, namely,
the USA. If Asian values are today discovered as values of authoritarian-
ism cultivated by dictatorial regimes in Asia, they were given
favourable media coverage only a few years back as a distinguishing
mark of dynamic East Asia as contrasted with stagnant Latin America
or incoherent South Asia.
History, of course, uses models beloved of manipulators to befuddle
them at the next roll of the dice. Community values have also been
used to resist and overturn authoritarian regimes, often professing to
be secular but possessing the supreme virtue of being capital friendly.
The most striking example of such a revolt in recent memory is
perhaps the Iranian revolution organized by Ayatollah Khomeini and
his followers. But, of course, where communities do not have internal
democracy or easy exit routes, they turn out to be oppressive to the
people imprisoned in them (Alam 1999). The ideology of the Golkar
Party in Indonesia was illustrative of this. The Indonesian economic
crisis of 1997 ultimately led to the overthrow of the murderous
military-authoritarian regime of Suharto and his capitalist and military
cronies. But this happened because of popular revolts led by students

in 1998, and not through the goodwill of the self-proclaimed pro-
tectors of democracy worldwide, namely, the ruling coterie of the
United States and their allies (Human Rights Watch 1994).
The elite pluralism, authoritarian or semi-democratic, practised in
most states, and in such bastions of democracy as the USA or the UK is
mirrored in the ambivalent attitude of the establishment of those
states towards the blatant violations of democracy and multicultural-
ism in other states of the global system, including, of course, the Asian
states. It is acceptable for Saudi Arabia or the United Arab Emirates to
rule out all possibilities of democracy and multiculturalism, but it is a
crime when Saddam Hussein exercises a variety of authoritarian ways
to manage cultural diversity – a crime to be punished by further penal-
izing the Iraqi children, women, and of course, men.
To look at the paradox in yet another way: the authoritarianism of
some regimes finds popular support because it is seen, often wrongly,
as a shield against the worst depredations of global capital. Thus,
Mahathir Mohamad’s style of semi-democratic authoritarianism finds a
sympathetic echo among many ordinary Malaysians because they look
upon his policies as a bulwark against the machinations of financial
capital. Even if liberals might fume against his suppression of dissent,
ordinary Malaysians will remember that they benefited from the
affirmative action pursued by his party in the 1970s and 1980s when
growth took place without a rise in inequality (Hashim 1998). The fact
that Malaysia escaped the worst effects of the financial crisis and re-
covered quickly from the crisis, partly because of the controls imposed
by Mahathir’s regime on capital mobility would also have enhanced
his popularity (World Bank 2000). What applies to Mahathir’s Malaysia
applies with redoubled force to Communist China. Until now, in spite
of the fact that China has aggressively entered into the global markets
for commodities, technology and capital, it has broken all records of
growth. Moreover, ordinary people’s standards of living have improved
in almost all areas despite a tremendous growth in regional inequality
and a tendency for rural-urban differentials to widen again. Hence, the
talk of violations of human rights in China until now has found only a
faint echo among the majority of the Chinese people.
The claims of the self-proclaimed leaders of democracy sound hollow
when they have extended the politics of exclusion from their own gov-
ernment to the rest of the world. In the USA, presidents are routinely
elected only by a minority of the voters. The two-party machine and
the financial requirements ensure that nobody can even compete
without support from some section of the wealthy. Because of this

dominance of money in the electoral process, ordinary people do not
find candidates who will focus their attention on real issues affecting
their welfare, issues of insecure employment at low wages, limited
access of the poor to higher education, and an inefficient and expen-
sive healthcare system in the richest country of the world (WHO 2000).
Moreover, the rich and right-wing groups in the USA have systemat-
ically used so-called initiative campaigns to reverse gains made by
the poor and the underprivileged, such as laws authorizing affirmative
action or enabling women to obtain abortion facilities safely and
cheaply (Broder 2000). Presidential and Congressional plutocracy is
thus not equivalent to rule of all the people, for the people, by the
people. The three major organizations now laying down rules for the
operation of the global economy, as designed by the G-7 countries, are
thoroughly undemocratic in composition and operation. The democ-
rats that the G-7 countries bless, such as Carlos Menem, and Alberto
Fujimori, have repeatedly flouted constitutional norms and have con-
tinued to enjoy the support of the elite pluralists in Washington,
London, Berlin and Paris. On 5 April 1992, for example, Fujimori vio-
lated Peru’s constitution, dissolved the Congress, suspended the judi-
ciary, jailed members of the opposition and assumed dictatorial
powers. Under Fujimori’s rule, the military jailed, killed and disap-
peared anybody suspected of connection with terrorists, and presiden-
tial immunity was granted to the perpetrators of these crimes (Human
Rights Watch 1993). In the year 2000 again, Fujimori, in violation of
the constitutional ban on any President being elected for a third term,
decided to contest the election, and suspicion of widespread electoral
fraud was confirmed by all impartial observers, including the interna-
tional media. The opposition candidate, Alejandro Dolado, withdrew
in protest, and Fujimori declared himself president. Such is the charac-
ter of democracy the US establishment helped restore in Peru.
Exclusionary strategies can use non-market instruments (Taylor
1999) but the market can render them nearly invisible and therefore
more difficult to fight. When international finance and media support
the exclusionary strategies, the fact of exclusion becomes obscured
from the public gaze.
The French Revolution trinity of collective goals to be pursued by a
revolutionary people did not inscribe yet another goal, which has
become more and more important in the quotidian existence of
human beings, even as unrestrained capitalism is making it less and
less of an attainable objective. This is the goal of security. Before the
industrial revolution appeared on the scene and was followed by the

sanitary and medical revolutions in Europe, human beings were inse-
cure because of natural causes which flooded them, or parched their
fields, or destroyed their homes in hurricanes, or killed them with bac-
terial or viral infection, or with starvation; alternatively, they were
insecure because of attacks by wild animals, other men who might be
brigands or soldiers of a warring state, or soldiers of their own state.
Now economic forces, most of them born out of human decisions and
human institutions, can take away their livelihood, and starve and kill
them because of their inability to purchase food or healthcare. All this
has happened, when the technology for providing enough food for
everybody in the world has arrived, and when the preventive and cura-
tive measures have allowed the average life of a woman to exceed
85 years (Manton, Stallard & Tolley 1991).
The spread of the capitalist system had led to ever-widening cycles of
fluctuations in prices, employment and incomes. But since the end of
the nineteenth century, in western Europe, in Australia and New
Zealand, and then in the Soviet bloc countries from the 1930s, the
state had stepped in to provide social insurance against man-made,
and pathogenically caused insecurity. Much of that welfare or social
security system has either already collapsed or is being steadily eroded.
Together with that development, several other, connected processes
are further increasing the insecurity of human beings everywhere. The
first is the steady withdrawal of the state from most sectors providing
goods and services. In the ex-Soviet countries this has led to massive
unemployment and declines in incomes. As is well known, in the
Russian Federation this has been attended by a rapidly declining
longevity with a contracting population (Andreev et al. 1998; Ellman
1994). Even in China, the downsizing of the state enterprises has led
to the dismissal of several hundred thousand, if not millions, of em-
ployees. As in other countries (such as South Korea after the economic
crisis of 1997) the women have suffered much more than men: a larger
proportion have suffered retrenchment because of the closure or down-
sizing of the enterprises undergoing adjustment (UNDP 2000: 53). In
India also, a steady process of attrition of state enterprises and employ-
ment provided by them is continuing. In spite of a decline in fertility
in most developing countries of Asia, the workforce is expanding at
fast rates – at more than 1.5 per cent per year in most countries. With
deteriorating terms of trade of agriculture and shrinking opportunities
of employment in that sector, workers are moving to cities and towns
in their own countries and migrating abroad in search of work. When
they find employment, it is generally in low-paid, casual or contract

work (Bagchi 1999b). A large proportion of migrants to other countries
turn up as illegal immigrants. Even as the World Trade Organization
and the Washington twins are increasing the area of unhindered
operation of capital, they are also tacitly or openly supporting the
attempts of governments, especially in rich countries, to suspect most
intending immigrants as possible criminals. The widely publicized case
of 58 Chinese immigrants found dead in a Dutch tomato-carrier at the
port of Dover in England, in the year 2000, is only one illustration of
how this kind of insecurity has been heightened under the current
global order (Bagchi 2000).
A frantic process of privatization has accompanied the gradual or
sudden withdrawal of the state from the productive sphere. The logic
of this has often been non-transparent, as in India: improving
efficiency, finding a positive value for rapidly deteriorating assets,
meeting budgetary deficit, and attracting foreign direct investment
have all been offered as reasons. Reasons unstated are pleasing transna-
tional capital and its backers, the governments of G-7 countries, and
global watchdogs of capital, and allowing cronies and associates of
decision-makers to get part of the expected capital gains in the role of
go-between or temporary handlers, causing a flutter on the stock
market.
The unleashing of capital has been accompanied by the burgeoning
of securitised assets all over the world. That this unabated financial lib-
eralization has been responsible for most of the turmoil in global stock
markets has been admitted by all sides, including the watchdogs of
capital (BIS 2000; Giron and Correa 1999). The financial turmoil has
been largely responsible for banking crises in many countries. The
World Bank calculated that resolving bank crises (primarily caused by
unregulated financial liberalization) has cost between 10 and 15 per
cent of GDP in the Czech Republic and Mexico, between 23–24 per
cent and 40 per cent in Cote d’Ivoire, Macedonia and Indonesia (all
between 1988 and now) and more than 40 per cent of GDP in Chile in
the crisis of 1982–85 (WDR 2000: 37). The Bank for International
Settlements in its latest annual report has documented the enormous
volatility in financial markets, even in 1999, when most of the turbu-
lence caused by the Asian financial crisis and the worst of the Russian
financial crisis is supposed to have been absorbed (BIS 2000: chapter
VI). The increased volatility of the stock markets in a situation in
which more and more assets are being privatized and securitized, of
course, exposes the ordinary people in Asia to further insecurity, as the
effects of this volatility are felt through the whole banking and produc-
tion system (Bagchi 1999a).
While all these developments are badly disrupting the lives of ordi-
nary people everywhere, they are not accepting the changes like dumb
animals. From Chiapas to Jakarta, ordinary people have fought the
capital-friendly state and sometimes succeeded in making it change its
ways, at times quite radically. The demand for participation in the
democratic process has led many countries to decentralize government
responsibilities. One of the most hopeful of such experiments is being
conducted in Kerala in India (Isaac & Franke 2000). But the elite can
also talk about decentralization, meaning decentralization of respons-
ibilities and routine administration, but not generally of political
power, including powers of regulation. So long as global capital
remains fancy-free but fetters are put on people’s geographic mobility
and collective action, civil rights as well as political rights will continu-
ally be violated by sectarian terrorists, and terrorists donning the legiti-
macy of the state. There have also been movements against the
irresponsible behaviour of the global watchdogs of capital but the
citadel of global rule of capital is yet to be seriously challenged.
I shall end with stories of two women caught up in the maelstrom of
sectarian turbulence and ancient domestic violence in the city of
Bombay. A woman’s NGO which was trying to document the violence
unleashed in Bombay between December 1992 and January 1993, by
the Shiv Sena and its allies and also provide relief to some of the
victims of that violence was approached by a Hindu woman complain-
ing about domestic violence perpetrated by her husband. In the course
of conversation, it turned out that she had also taken part in the
violence against her Muslim neighbours. If in this situation, the NGO
encouraged her to register a case with the police against her husband,
the police were quite capable of letting her husband go scot-free but
harassing her, in order to show that they were not so sectarian in their
activities as they were alleged to be. Around the same time, another
woman, this time a Muslim, approached the NGO again complaining
of domestic violence. This time again, the NGO had seriously to con-
sider the proper course of action. A complaint with the police,
knowing the anti-Muslim bias of the typical policemen, might result in
the husband being subjected to a dose of punishment in the hands of
the police much greater than was his legal dessert.3
Thus with class rule, elite pluralism and growing insecurity of
ordinary people, the democratic rights of those people cannot be
guaranteed simply by passing laws. The separation of the sphere of
civil society from that of the state remains virtually meaningless so

long as liberty is not combined with equality and security provided in
a framework of genuine fraternity and sorority. Elite pluralism will
remain an enemy of the substantive freedoms of the people even when
a procedural democracy has been installed all over the world. The fight
for egalitarian multiculturalism (acceptance and nurturing of cultural
diversity), in a framework of procedural democracy is yet to be won
even in most much-vaunted bastions of democracy in the North
Atlantic seaboard. In Asia many countries have still to get rid of the
domination of local military-feudal oligarchs supported by predatory
transnational capital and its client governments in G-7 countries. The
fight for democracy in Asia, as in most other developing countries of
the world, is thus to be waged both against the local ruling class and
against the global controllers of finance and international economic
policy. The introduction of formal or procedural democracy as such
will not protect the substantive freedoms of the people if the local and
international oligarchs can continue to practise elite pluralism, and
marginalize the majority.
Notes
1 Not to speak of that fault line, gender division, which cuts across all the
other markers of separation and hierarchy). It may be useful to glance briefly
at the model of rule by an elite as an alternative to the model of a ruling
class governing an unequal society – a model that had been powerfully con-
ceptualized by Marx, Engels and their followers (Marx and Engels 1848/1969;
Marx 1850/1969; 1852/1969; Bottomore 1964; Wright 1997).
2 As it happens, even as the theory of a democratic polity presiding over a plu-
ralist society was being elaborated, the majority of the African Americans in
the USA, had been suffering disfranchisement a century after the formal abo-
lition of slavery and the US government was actively encouraging the instal-
lation of dictatorships in countries under their influence so long as the latter
were friendly to ‘free enterprise’. But this is only one illustration of the gap
between the theorizing of mainstream political theorists and the real world
of democracy.
3 I owe these two stories to Dr. Flavia Agnes, a fearless activist-lawyer based in
Mumbai.
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3
Globalization, Economic
Restructuring and the Implications
for Democracy in Developing
Countries
Jayati Ghosh
Introduction
Even in the context of the extraordinary twentieth-century, the 1990s

could be described as a remarkable decade. Rarely in modern economic
history has there been a period characterized by such dramatic volatil-
ity, not only in material forces and economic and political conditions,
but also in perceptions and expectations. The most recent phase of
international capitalism, which is now described as the process of glob-
alization, has been one of very rapid and dramatic changes, and the
promise – largely belied thus far – of even greater changes to come. At
the start of the new century, the majority of the people in the world
are living in countries where various sorts of economic insecurity has
increased quite significantly, and has changed the ways in which citi-
zens can react to both national and international economic forces.
In this chapter, the implications of the basic processes of economic
globalization for patterns of democracy in developing countries will be
considered. The focus is on developing countries in general, while the
perspective is South Asian. In the next section, the important tenden-
cies of the world economy in the 1990s are briefly outlined. In the
third section, some of the myths about globalization, which in turn
affected both government policies and expectations of elites and ordi-
nary people in developing countries, are exposed in relation to reality.
This section also deals with the economic strategy of economic liberal-
ization which has both created and resulted from the process of global
economic integration, and considers its effects on the material condi-
tions of people in developing countries. The fourth section contains a
consideration of some of the implications of the global spread of media
29
30 Globalization, Economic Restructuring and Implications for Democracy
and a certain kind of cultural homogenization. This concluding section

also briefly outlines some of the effects this can have on democracy at
different levels and on social tension and cohesion.
The world economy in the 1990s
One of the most striking characteristics of the world economy over the
1990s was the substantial increase in the economic vulnerability of
nations. Such vulnerability was not confined to the economies that
have traditionally been regarded as more fragile, such as the least
developed countries or those developing countries that relied heavily
on external bank finance for their accumulation, but affected even the
largest and most powerful economies. Because of the sudden incorp-
oration of previously ‘socialist’ countries into the international capital-
ist system, it also penetrated countries that were earlier relatively
insulated. This enhanced economic vulnerability took several forms.
The most obvious was the increased potential for sudden and sharp
economic shocks, whether in the form of dramatic movements in
exchange rates, large inflows or outflows of capital, or changes in trade
flows. The greater volatility in foreign exchange markets was reflected
in the increased variance of exchange rates in the 1990s compared to
earlier decades, and was a predictable outcome given the sheer volume
of such liberalized transactions. The daily value of total foreign cur-
rency transactions in just one such center – New York – was estimated
in 2000 to amount to more than $1.4 trillion, of which less than 3 per
cent referred to trade in goods and services, while the remainder
reflected capital flows and other speculative transactions.
Further, shocks were no longer isolated in nature, or confined to par-
ticular countries, but tended to spread through ‘contagion’ to other
countries. The transmission mechanism could have been either real or
financial flows, but increasingly it came to be recognized that short-
term capital flows were now the primary via media. Contagion itself,
which is qualitatively new, was something that was still little under-
stood. Quite often it has been simply geographical proximity that has
been responsible for the transmission of shocks from one country to
another, while in other cases some assumed common characteristics
(which the financial press has dubbed ‘fundamentals’) have been held
to blame. But the lack of any systematic pattern that holds for all cases
of supposed contagion suggests that financial markets do not necessar-
ily operate according to any clearly defined rules, and this makes pre-
diction very difficult. Once the financial contagion occurs, the
Jayati Ghosh 31
transmission of other economic shocks and recessionary tendencies is

easy to explain. This is why the possibility of even worldwide conta-
gion is now taken seriously.
Another marked feature of this decade was the sheer rapidity of the
changes that were being generated from within or forced upon
economies. Once again, large and highly volatile capital movements
were associated with this, but that was not the only factor behind the
greater speed of movements in various real and financial markets. Both
economic expansions and downturns, especially in developing coun-
tries, became highly intense and compressed processes, and the turn-
around was equally sharp and often unexpected.
In the closing years of the twentieth-century, these processes
reflecting external vulnerability assumed a greater significance because
they occurred in an overall context of global slowdown in economic
activity. In the heady days in the early 1990s, the explosion of the
forces of globalization and the apparent triumph of capitalism over
any rival economic system were taken as sufficient to establish more
rapid and sustained material expansion in much of the world. That
expectation has been tempered by a much more sober reality, in which
it is now clear that these forces have actually been associated with a
deceleration of economic activity in much of the developed world, a
continuing implosion in vast areas of the developing world including
the continent of Africa, and a dramatic downslide in what had hitherto
been the most dynamic segment of the world economy – East and
Southeast Asia. The later years of the decade brought the greatest disap-
pointment. Global output growth, which averaged 3 per cent in the
period 1990–97, was less than half that rate in 1998 and 1999, and as
many as 36 developing countries experienced declines in per capita
income.
The causes for this increased economic fragility of both the entire
world system and of individual countries within it, are to be found in
the greater integration of the international system through the various
forces which are collectively known as ‘globalisation’. There are numer-
ous such forces, which can be briefly categorized as trade integration,
foreign investment flows, portfolio capital movements, external debt
transactions, purely speculative currency movements, and finally inte-
gration based on technological changes such as the spread of satellite-
based media.
Consider first the growing importance of external trade. This is fre-
quently cited as one of the more significant manifestations of global-
ization, and it is certainly true that for many economies the share of
external trade in GNP is greater today than, say, half a century ago. Yet
it is also true that when the yardstick of comparison is the relative
importance of foreign trade during the late 19th century, the current
period appears much less remarkable. Thus, the share of external trade
in the GNP of the United Kingdom in 1870 was nearly 30 per cent,
that is one and a half times the ratio prevailing more than a century
later; while for the US the ratio was roughly the same as today, at
around 7 per cent. The ratios of trade to national income were much
higher for the African and Asian colonies, as well, and typically ranged
from one-fourth to one-third of national income, whereas for most
countries in these regions today (barring the high-exporting East and
Southeast Asian countries) they are around half that proportion. This is
equally true for the Latin American countries.
The feeling that international trade has grown substantially comes
about because of the massive decline in such trade during the War
years, after which they have recovered slowly in the second half of this
century. What we observe today is a shift back to the level of trade per-
formance achieved by the international economy in the last decade of
the nineteenth century. Then, as in the past decade, world trade
growth was faster than world output growth. However, relative price
equalization, one feature that economists typically expect to be among
the first effects of trade, has not really occurred. Instead of equating
prices across countries through international goods arbitrage, today’s
external trade leads to a lower degree of correspondence in price move-
ments than it did a century ago. This is partly a result of the greater
volatility of exchange rate movements, which makes companies and
traders less willing to react to short-run changes in nominal exchange
rates unless they are assured that these reflect secular trends. There
have also been changes in the internal structure of most capitalist
economies that make them less responsive to international price link-
ages and more prone to pricing to particular segmented markets,
largely because of the importance of oligopolies in production.
Furthermore, multinational companies in their internal and external
transactions now dominate an increasing share of world trade. This
shift in the pattern of international trade away from being dominated
by relatively homogenous products towards the greater role of product
differentiation, means that oligopolistic rents absorb much more of the
‘gains’ from international trade than ever before.
The other significance of external trade lies in the fact that since the
1980s, it has been seen as the basic engine of growth for developing
countries, and the chief means through which rapid industrialization is
Jayati Ghosh 33
possible. The incredibly high rates of export growth exhibited by the

East Asian region pointed to the positive aspects of global economic
integration through trade. It is now apparent that it was precisely such
excessive export dependence that engendered certain vulnerability in
the region. Similarly, there is the other side of the coin: that exports
mean some other country’s imports and sometimes can be seen in
importing countries as substituting for domestic production and
employment rather than simply adding to consumption. In developed
countries this perception has given greater political weight to calls for
protectionist policies, especially those directed against the manufactur-
ing exports of developing countries.
The second important agent of globalization is foreign direct invest-
ment (FDI), which expanded dramatically over the 1990s. Total FDI
flows into both developed and developing countries surged in the
1990s, to reach more than $600 billion in 1998. Consequently, FDI
became the single largest item in net private capital flows. FDI inflows
into developing countries increased at an average rate of around 14 per
cent per annum, well above the annual average increases in total gross
fixed capital formation at 4 per cent and in exports of goods and non-
factor services at 3.8 per cent.
Once again, there is need to put this into perspective. These flows
certainly appear large today, but in terms of proportion of world
income they are still relatively minor when compared to the enor-
mous and prolonged flows that marked the late 19th century, when
capital flows out of Britain amounted to between 5 and 7 per cent of
GNP and flows into the US accounted for more than 5 per cent of
her GNP.
Further, the dominant share of all FDI (more than 85 per cent in
1997 and 1998) was accounted for by mergers and acquisitions, which
do not represent new investment or asset creation but simply result in
changes in the ownership of existing assets. The major consequence of
such a drive towards mergers and acquisitions is greater international
industrial concentration in the hands of a few firms in each business
sector. Thus, the sources of most FDI – the large multinational corpora-
tions – have become even more dominant in the control of interna-
tional production and distribution. The top 100 MNCs, which are all
from the developed industrial countries, have approximately $1.5 tril-
lion worth of assets abroad and account for more than one-third of
global FDI stock. Their assets, sales and profits have all increased sub-
stantially in the past five years, but the same is not true for their total
employment, which has stagnated.
Even this FDI has been very unevenly distributed across regions.
Developing countries received less than one-third of total world FDI in
the 1990s, and of this, around one-third went to China alone. Only a
handful of countries in the developing world experienced FDI inflows
of any significance, while most countries received capital inflows that
were negligible in per capita terms.
Further, these FDI flows may have more than doubled over the past
five years, but their share of total capital formation remains very small,
at around 4 per cent for developed countries and 7 per cent for devel-
oping countries. It is only in some of the newly industrializing
economies of Asia that both inward and outward FDI flows were sub-
stantial in relation to domestic investment. Even in this region, the net
effect on domestic investment was typically rather small as well as
limited in terms of time span. The form of capital flow that is widely
seen as responsible for the increased vulnerability of nations in the
1990s is, of course, portfolio capital movement, in the form of invest-
ment in domestic stock and securities markets by non-residents. Such
flows registered a marked increase to developing country ‘emerging
markets’ in the 1990s, as a result of a combination of factors. These
included the wave of financial deregulation that swept the developing
world in the past decade; the increasing need for international asset
managers, including pension funds which have been growing in size,
to diversify their portfolios in order to assure larger returns; and the
economic slump in rich industrial countries, which reduced rates of
return on capital investments made and forced mobile capital to seek
alternative avenues for investment. This wave has already diminished
in strength, and most developing country equity markets have experi-
enced the negative effects of decelerating net inflows of foreign port-
folio capital.
Not only are today’s international capital markets very hierarchical,
oligopolistic and skewed, they are also notoriously imperfect in their
operations. Their behaviour over the past decade suggests that they are
clearly not efficient in any sense of the term. This is evident in two
important areas. While the mobility of capital internationally has
increased considerably over the past 50 years and especially in the past
decade, it has not resulted in equalization of rates of return on capital
or of wage rates across countries. There is no indication that capital
typically moves from capital-rich to capital-poor countries; rather, the
evidence points to the geographical and income concentration of
capital. Similarly, the increasing capital flows have not resulted in a
substantial transfer of savings from high saving to low-saving coun-
Jayati Ghosh 35
tries, even among the group of industrial countries (except for the
much-publicized example of Japan’s capital exports to the US). This is
clear from the fact that while savings rates across countries show wide
variation, the range of differences in the ratio of current account to
GDP is much narrower, so that variations in investment rates are not
much different from those in savings rates. Even the favoured recipi-
ents of capital inflow in East Asia have been economies with very high
domestic savings rates.
Most of all, however, such flows have tended to generate unparal-
leled degrees of volatility and uncertainty in capital and currency
markets. These in turn lead to much more dramatic material changes
as well as a much greater degree of volatility and uncertainty. It is now
clear that the all too brief period, when the financial markets of
some developing countries and economies in transition were seen
as the favoured destination of international investors, is over for the
time being. The outlook for most emerging markets is muddy if not
definitively negative. This is likely to imply significant net outflows of
foreign capital from many economies, as already witnessed in the
Asian crisis countries and in Russia. The growing fear and insecurity
among market participants, which is reflected in the large yield spreads
seen recently, could become self-fulfilling and result in the prolonged
disruption of international financial flows with severely depressing
effects on economic activity as well as on world trade.
What is important to note here is that the crisis – in the specific form
of dramatic reduction in net capital inflows – can attack virtually all
emerging markets, not simply those which have been identified as
having specific domestic problems or which are perceived as particu-
larly risky prospects. This is essentially a repetition of a historical
pattern in international lending and portfolio investment which can
be traced over more than a century, whereby problems of repayment or
potential default in one recipient country have led to dramatic declines
in all such inflows to all developing countries, rather than being
confined to the individual transgressor.
This brings us to the other important form of capital flow that has
generated very sharp cycles in the recent past – external borrowing. It is
true that international lending to developing countries has always been
characterized by boom-and-bust cycles, and sharp collapses in such
flows, consequent upon repayment problems of a small sub-group of
debtors, were evident in the 1920s, 1930s, and of course in the external
debt crisis of the 1980s. While it has typically been in the nature of
private international capital to move in such a manner, the current
expansion of global finance has only accentuated such a tendency. This

is because the wave of financial liberalization also involved easing
restrictions on external borrowing by domestic private agents, and this
has contributed in no small measure to sharp inflows and outflows of
resources in developing countries.
To these must be added those movements of capital, which are
purely speculative, betting on the future value of currencies or other
financial assets. These are empirically difficult to separate from other
capital flows, but the conceptual difference is important, because
such speculative behaviour played a major role in generating and
worsening financial crises throughout the 1990s. Of course, it is
worse than simplistic to blame currency traders – such as the
(in)famous George Soros – for the problems of economies in finan-
cial crises, but it is evident that their behaviour not only accentuated
market trends, but occasionally created financial pressure greater
than anything warranted by macroeconomic conditions in particular
countries.
These aspects of global economic integration led to the intens-
ification of some features of ‘traditional’ capitalism, which until
recently seemed to have become less relevant. Thus, one of the fea-
tures of the workings of the international economy, which had been
much discussed by development theorists and third world prac-
titioners, was the squeeze on primary commodity exporters, typi-
cally through terms of trade movements. The sudden rise in primary
commodity prices in the mid-1970s and then again in the early
1980s seemed to belie the existence of this secular trend. But the
past decade brought it back with even greater force, as international
terms of trade moved against primary commodity exporters, and
prices of agricultural and mineral raw materials, as well as of petro-
leum products, slumped.
The other features of the capitalist system, which used to be dis-
cussed earlier, were the tendencies towards economic centralization
and geographical concentration. In most Marxist or development liter-
ature, the nature of market functioning was held to be responsible for
the first, while the second was attributed to imperialism. Yet even here,
the patterns of development from the 1970s seemed to suggest that the
relevance of these processes was now more restricted. Various types of
economic and production organization got more attention, such as in
the ‘industrial clusters’ and ‘flexible specialisation’ which increased the
economic significance of small and medium sized units relative to large
enterprises. The changing world structure of production, especially the
Jayati Ghosh 37
emergence of semi-industrial countries as major exporters of manufac-

tured products, was highlighted to argue that imperialism was effect-
ively a past phase, and that modern globalization would involve a
much more complex dynamic between participating nations.
By the closing years of the decade, it became evident that both of
these conclusions were premature. If anything, international central-
ization of production and distribution accelerated in the 1990s, and
the wave of mergers and acquisitions, which continue to sweep across
all capitalist countries, suggest that the process still has some way to
go. The economic and financial crises in Latin America, Southeast Asia,
and other emerging markets, have brought into question the assess-
ment of regions which were earlier seen as examples of the successful
proliferation of capitalism as a means to development and transition to
industrial country status. Throughout these continents today, imperial-
ism does not seem dead at all for ordinary citizens; indeed, it may
never have seemed so potent.
This emphasis on the continued, indeed accentuated, potency of
imperialism obviously should not blind us to the role played by the
domestic ruling classes in thwarting or inhibiting the developmental
and democratic ambitions of most of the citizenry. The success of
imperialist globalization stems very largely from its ability to draw
local elites (and even middle classes) into their own ranks, to offer part
inclusion into a privileged international world where the travails of the
local poor can be forgotten, even while their crucial role in generating
productive surplus is not lost sight of. The incorporation of local elites,
and the consequent interplay of domestic class forces with the require-
ments of global capitalism, makes the political economy of the current
phase both more complex and more striking.
The Southeast Asian experience of the 1990s provides a graphic illus-
tration of many of these points, and indeed encapsulates a certain
development trajectory, which has a much wider significance. Many of
the features mentioned above were especially evident in the region: the
sharpness and rapidity of both economic expansions and slumps; the
increase in vulnerability expressed through both the effects of sudden
shock and the process of ‘contagion’; the processes of centralization
and concentration inherent in the current world economy. The subse-
quent recovery, in turn, based as it is on a combination of sale of
important productive assets to large external buyers and possibly
unsustainable fiscal impetus, also suggests that the earlier model of
export-led rapid expansion is no longer available even to the original
practitioners.
In turn, this highlights a feature of current capitalism, which is

similar to a crucial feature of an earlier heyday of globalization in an
earlier century: the dependence of the core economies on surplus
extraction from the periphery. This was critical for core capitalism not
only in the primary accumulation phase but also in financing and sus-
taining the industrial revolution and thereafter allowing for investment
rates, which ensured high rates of growth of economic activity in the
core countries. The mid-twentieth century changed that relation into
one in which, while resource extraction remained important, the focus
shifted towards the importance of the periphery in providing markets.
By the turn of the new century, the pendulum appears to have swung
back again to a situation in which countries of the periphery are viewed
in terms of their ability to generate surpluses which are to be consumed
by the capitalist core, and especially by the United States. The peculiar
circumstances whereby the US economy is on an extended consump-
tion boom financed by the rest of the world’s (including the developing
world’s) savings, is a reflection of this larger tendency.
All of this suggests that the search for an alternative model of indus-
trialization must be taken seriously, and that such a model should not
be dependent upon assumptions regarding the beneficial effects of
trade and capital account liberalization, which are now known to be
mistaken. In the next section, these assumptions, and the impact they
have had on developing country macroeconomics, are discussed in
more detail.
Globalization and growth: the recent evidence
Globalization has been welcomed because it has been seen to provide

an opportunity for the vast bulk of the world’s population, many of
whom still live in conditions that barely ensure survival, to ‘catch up’
materially with the more privileged richer minority. Yet the evidence
that we already have suggests that this pattern of growth is one, which
is fundamentally unequalizing. The process of global economic inte-
gration that we can observe thus far, has been one which concerns and
benefits large international capital in its various forms, and increases
worldwide economic concentration as well as greater inequality in
incomes and in access to resources. This is evident from some of the
data relating to patterns of growth and distribution in the past two
decades.
Thus, purely in terms of geographical distribution, around 1.6 billion
people (more than one-fourth of the world’s population) live in coun-
Jayati Ghosh 39
tries in which average incomes have actually fallen over the past
decade or more. By contrast, the number of people living in countries
where average incomes have risen in real terms is slightly less than
that, at under 1.4 billion. In 70 countries, per capita incomes are less
than they were in 1980, and in 43 countries (many of which are in the
continent of Africa) such incomes are less than they were in 1970. In
the 1990s, average incomes fell by a fifth or more in 21 countries,
mostly in the formerly socialist countries of Eastern Europe and the
former Soviet Union. Countries like Russia experienced historically
unprecedented declines in average living standards, which in turn pre-
cipitated major social disintegration and a collapse of demographic
indicators, pointing to severe crisis. Even in several countries in which
average incomes rose, including those in Asia, worsening distribution
meant that there are many more poor people in terms of absolute
numbers than the two decades prior.
The unequalizing nature of the growth process currently in opera-
tion is revealed most dramatically in the worldwide gaps between rich
and poor, which have widened even faster in the recent past. The gap
in per capita income between industrial and developing worlds more
than tripled between 1960 and 1990. Between 1960 and 1991, the
income share of the richest 20 per cent of the world’s population rose
from 70 per cent to 85 per cent, while the income share of the poorest
20 per cent of population fell from 2.3 per cent to 1.4 per cent. In fact,
the income shares of more than 85 per cent of the world’s population
actually fell over this period. The ratio of shares of the richest to the
poorest groups doubled from 30:1 to 60:1. This has also been reflected
in the growing concentration of assets. Thus, today the assets of only
the three richest people in the world amount to more than the com-
bined GNP of all the least developed countries put together. The net
worth of 350-dollar billionaires is equal to the combined incomes of
the poorest 45 per cent of the world’s population that is 2.3 billion
people, who are likely to hold assets worth even less than this. All of
these inequalities are estimated to have grown over the past decade
(UNDP 1996, 1998).
In the very recent past, tendencies towards stagnation and
enhanced inequality have become more accentuated. Consider the
pattern of international trade. World trade in volume terms grew by
only about 3.5 per cent in 1998. This is the smallest increase of the
decade and markedly less than half the rate of 1997. This low rate of
increase resulted from the almost 5 per cent decline in imports of
developing countries, mainly owing to the collapse of imports in the
crisis countries of East Asia, and the 10 per cent import drop in Japan.
In 1999, import levels just began to recover, but only very slowly,
with import volumes rising 2.5 per cent in the developing countries,
and 0.25 per cent in Japan.
The value of world trade in dollars actually fell in 1998. This is the
first time in the decade, or indeed in the current phase of globalization
since 1980, that world trade has declined in terms of dollar values. The
plunge in commodity prices, particularly of oil, was obviously a factor,
but the prices of manufacturing exports also fell. This was more than
enough to counteract the rather weak expansion of trade volume. All
this negatively affected the export earnings, and therefore the import
demand, of many economies.
Similarly, even though the countries that were hit by renewed
financial turbulence in early 1999 managed to stabilize their currencies
faster than expected, exchange rates for a majority of countries have
remained at values far below their pre-crisis levels. This implies a net
loss of real income and, therefore, purchasing power in these countries,
which has been compounded by the declining unit values of their
exports.
Movements in international finance further intensified low import
demand from developing countries. Between 1991 and 1996, develop-
ing countries had received a positive net transfer of financial resources,
which enabled them to finance an excess of imports over exports. The
East Asian crisis reversed this flow, with this region in particular being
faced with a massive withdrawal of funds. Financial flows to the region
declined from a net inflow of $31 billion in 1996 to a net outflow of
over $110 billion in 1998.
Even though there has been some resumption of capital flows to
developing countries including those in the Asian region in 1999, the
overall prognosis is not very optimistic. Despite the recent reduction in
interest rates for the majority of potential borrowing countries, the dif-
ferences between these and yields of Treasury bonds of the United
States remain higher than before the Asian crisis. Also, there appears to
be a more general reluctance to lend to most developing and transition
economies, almost regardless of the interest rate.
One reflection of this reluctance is the increasing investment-saving
gap in the United States, as measured by its high and rising current
account deficit. This gap has been filled by absorbing a significant pro-
portion of world savings that could have been directed towards
financing a higher level of capital formation in other countries. When
analysts wax eloquent on the positive role played by the US economy
Jayati Ghosh 41
in terms of being the only engine of growth in the current interna-

tional economic configuration, it should be remembered that this has
been made possible because of the inflow of savings into the US from
the rest of the world, including from some of the poorest countries
that can least afford it.
In this context it is worth considering another point that is fre-
quently made in such discussions, that ‘sound’ macroeconomic poli-
cies as exemplified in low deficit or surplus current accounts and low
fiscal deficits are the key to investor confidence. Currently the only
country in the world that can boast of continuously attracting interna-
tional investors is also the one with the largest current account deficit
(in excess of $246 billion at latest count), the largest external debt and
a large fiscal deficit – the US. Despite this, the inflow of the world’s
savings into the US economy continues unabated. Even within the
industrial world, the countries with the most prudent macroeconomic
policies and the largest current account surpluses – Japan and the euro
area – are those facing recession and falling investor confidence.
All these are not accidents; in fact they are necessary correlates of the
pattern of global integration and inequality over the last decade. Even
the UN has recognized this:
‘The pattern of output growth across nations is widening the dis-

parity between levels of living and personal incomes in the devel-
oped countries and those in the rest of the world. … In the
majority of countries, growth for the foreseeable future will fall
far short of what is necessary to effect a substantial improvement
in living standards and a reduction in the number of people
living in poverty. … Thus, whereas in recent years many of the
developed countries were able to take advantage of globalisation,
the effects on many developing and transition countries have
been perverse’ (UN 1999: 24).
On the basis of a slightly closer look at the experience of growth

and external imbalance in developing countries, the Trade and
Development Report published by UNCTAD points out that growth in
developing countries as a group in the 1990s was at an annual average
of around 4.3 per cent. This does represent a recovery from the levels
of the 1980s, but it is still well below the average of 5.7 per cent
per annum of the 1970s. Moreover, this partial recovery in eco-
nomic growth was accompanied by a significant worsening of external
deficits.
Indeed, if China (whose performance was exceptional for a variety of

specific reasons) is excluded, then it turns out that the average devel-
oping country trade deficit for the 1990s was higher than that for the
1970s by almost 3 percentage points of GDP, while the average growth
rate was lower by 2 per cent per annum. Of course, low oil prices in the
1990s (compared to high oil prices in the 1970s) played some role in
this average since a number of developing countries rely on oil exports.
But the same pattern is evident, to almost the same degree, even for
non-oil exporting developing countries, indicating that the basic
problem lay elsewhere.
The pattern was also the same across regions. In Latin America,
growth was lower while trade deficits as a share of GDP were the
same. In sub-Saharan Africa, growth fell but trade deficits rose.
Countries in Asia ran on average greater external deficits in the
1990s without achieving faster growth. The general tendency among
the majority of developing countries over the 1990s, therefore, was
of widening external deficits combined with stagnant or falling
growth rates. This was precisely the opposite of what had been
promised by the proponents of liberalization at the start of the
decade.
Two forces were supposed to create a virtuous cycle of growth
and (eventually) lower deficits for developing countries: the Uruguay
Round of GATT, which was supposed to bring about a dramatic
increase in market access for developing country exports; and the
greater freedom accorded to international capital flows in the wake
of financial liberalization, which would allow developing countries
to finance deficits easily and increase their domestic growth rates.
Obviously, neither of these forces acted quite in the manner predicted
by their votaries. What explains the more depressing reality?
If we eschew the simplistic explanations which have been all too
readily advanced in the recent past, which tend to blame everything
on ‘over-hasty financial liberalization’ or domestic problems like ‘crony
capitalism’, then it is possible to identify some common features which
apply to all or most developing countries, and which also reflect the
general conditions of the world economy. There are thus two import-
ant factors behind the adverse combination of payments deficits and
lower growth: terms of trade losses and rapid trade liberalization. Both
of these stem directly from the attempts of developing countries –
pushed by public international institutions like the IMF as well as
private ones like the World Economic Forum – to integrate more
closely with the world economy in terms of both trade and finance, to
Jayati Ghosh 43
make their economies more ‘open’ and to rely more heavily on export-
ing activity as an engine of growth.
Thus, the terms of trade losses reflected the growing numbers of
developing country exporters crowding into already saturated markets,
pushing down prices further, and reducing the income gains from
additional exports. Interestingly, the process of relative price decline
occurred for both primary and non-primary goods exported by devel-
oping countries. The decline in commodity prices (both oil and others)
is well known by now, reflecting both slow growth of aggregate
demand in industrial countries as well as substitution away from use of
such commodities because of technological change. But standard
adjustment policies continue to promote reliance on these traditional
exports for most developing countries, further worsening the problem.
But even for manufactured exports by developing countries, relative
prices fell. In fact, since the beginning of the 1980s, the terms of trade
of developing countries relying mainly on manufactured exports have
fallen by as much as 1 per cent per annum on average. This reflects the
increased concentration of developing country interest on certain labour-
intensive or natural resource based manufactured products, including
low-technology inputs to the electronics industry. There is growing
concern that such manufactures may be acquiring the characteristics of
primary commodities in world markets. The fear that several analysts had
expressed earlier, that all countries cannot play the same game of aggres-
sive export promotion in labour-intensive manufactures without affecting
international prices, now appears to have been justified.
The problem has been aggravated by inadequate market access for
developing country exports in developed markets. This has turned out
to be one of the major false hopes raised by the Uruguay Round and
the formation of the WTO. While developed country markets have not
become more open for developing exporters, the markets of developing
countries have been significantly liberalized. Many developing coun-
tries opted for ‘big bang’ forms of trade liberalization, which drastically
changed the structure of domestic demand in favour of imports, but
even the more gradual liberalizers have seen imports make big inroads
into their markets and erode the viability of domestic manufacturers.
In the past, it used to be felt that trade liberalization combined with
currency devaluation would ensure that trade deficits would not get
too large. Indeed, the inability to finance such deficits typically
ensured that trade would eventually be brought into balance, even at
the cost of domestic contraction. But the possibility of using private
capital markets to finance such deficits, even if only for short periods,
has meant that deficits now continue for slightly longer periods. More
significantly, because trade liberalization has often been accompanied
by financial liberalization, it has broken the link between the current
account and exchange rate movements, which now get determined by
the behaviour of capital flows at the margin. So the new scenario is one
of exchange rate instability and currency ‘misalignment’ driven by
capital flows that further cause trade balances to deteriorate.
Often, the imbalances can be sustained for some time, because of
continued capital inflow. But the story of the 1990s was one of increas-
ingly rapid reversal of such capital movements, leading to boom and
bust cycles. The Asian crisis and the ongoing difficulties in Russia,
Brazil and elsewhere, are evidence of this. In the process, there was also
significant damage to domestic industry, in many cases leading to
effective de-industrialization because nascent manufacturers simply
disappeared in the face of severe and cheap external competition.
This is portrayed by some determined advocates of indiscriminate liber-
alization, as bad for workers but good for consumers in the country. But it
can only be good for consumers if domestic economic expansion is
somehow sustained sufficiently to ensure that there is more purchasing
power in the hands of consumers. The pattern of terms of trade move-
ments along with effects on domestic economic activity and employment
suggests that this was not the case for most developing countries. So the
greater openness of developing countries in the 1990s was associated not
only with higher volatility and larger payments deficits, but even with
inferior economic growth performance.
Another of the great beliefs of the age of globalization has been that
foreign investment – and foreign direct investment in particular –
could and would transform the world by bringing more capital to
capital-scarce economies and causing great changes in the productive
structures of developing economies. From the mid-1980s, the voices
arguing for this perception became more insistent and confident, and
the experience of several Southeast Asian countries in the period
1986–1995 seemed to confirm their optimism. It was suggested that
pessimism and wrong-headed economic policies were the only things
holding back other developing countries from reaping the benefits of
FDI-led export-oriented economic expansion. Even now, it is rare to
find an official document of any developing country government, or
indeed even of any multilateral institution, which does not put a lot of
emphasis on the potential positive role of FDI in a country’s develop-
ment, or on the need for doing everything possible to attract such
investment through various incentives and other policy measures.
Jayati Ghosh 45
But what exactly was the record of such FDI in the past decade? In
some ways, this is an especially good period to study the positive
effects of FDI, because throughout the world foreign investors and
multinational companies never had it so good. Everywhere in the
world, including in developed countries, government were vying with
each other to attract such investment, and this led to a progressive
reduction of regulations and restraints that could have inhibited MNC
freedom in any way. Therefore, it is natural to expect, especially with
all the hype surrounding the decade of globalization, that both foreign
investment and FDI would have been quantitatively more significant
than ever before, and that they would have played much more im-
portant roles in furthering the processes of industrialization and struc-
tural change in developing countries.
In this context, the actual evidence on the role of foreign investment
comes as something of a surprise. Table 3.1 provides information on
the aggregate net capital inflow into developing countries, as a share of
their GNP, in three periods since 1975. Some explanation of the term
‘net capital inflow’ is in order. Non-residents minus sales of domestic
assets by non-residents define this as the acquisition of domestic assets.
This includes categories such as official inflows (grants and aid), FDI,
portfolio equity, bonds and bank credit.
It turns out that aggregate net capital inflows into developing coun-
tries was not all that significant as a share of developing country GNP
in the 1990s. In fact, the average for the 1990s was only marginally
higher than that for the period 1975–82, and only stood out because of
the much lower net inflows during the period 1983–89, that were
when the external debt crisis was working itself out. Indeed, if China is
excluded, then it turns out that the 1990s shows a lower quantitative
significance for net foreign capital inflow, in all other developing coun-
tries combined. The late 1970s turns out to have been the time when
foreign capital was most significant relative to national income, and
the globalizing 1990s comes a rather poor second.
Table 3.1 Net Capital Inflow into Developing Countries (as per cent of GNP)
1975–82 1983–89 1990–98
Total net inflow

Including China 4.91 2.87 5
Excluding China 5.45 2.97 4.22
Source: UNCTAD (1999).

The big change across the different time periods has been in the
nature of the capital inflow. In the period 1975–82, fully half the net
inflow consisted of bank loans; official flows, including development
assistance, amounted to another 32 per cent. FDI and portfolio
inflows together amounted to a measly 11 per cent. By the 1990s,
the picture had changed dramatically. All official flows were down to
20 per cent, and bank loans to 24 per cent. Instead, portfolio inflows
had increased to 21 per cent and FDI to 34 per cent of net inflow.
However, even this net capital inflow does not give us an idea of the
actual resource flows to or from the country. That is provided by net
capital flows, which represents net capital inflows minus net capital
outflows (that is, acquisition minus sales of foreign assets by resi-
dents). For a genuine idea of net resource transfer, we need to look
at the extent of net capital flow minus interest payment and profit
remittances, which emerge out of such flows. By this reckoning,
external savings have contributed really rather little to the develop-
ment process for all developing countries (including China) taken
together. Net resource transfer was actually negative in the 1980s,
but even in the period 1990–98, they amounted to only 2.65 per
cent of the GNP of developing countries, just slightly above that
ratio for the late 1970s and early 1980s (2.48 per cent).
One of the reasons for this less than wonderful performance of net
transfer in the 1990s was the change in the pattern of net capital flows
over the 1990s. Around 1992–93, a number of developing countries
across Asia and Latin America went in for substantial financial liberal-
ization, including deregulation of capital account transactions. In con-
sequence, while capital inflow increased, so did capital outflow, as
more and more domestic residents found it both more possible and
more attractive to hold foreign assets. The effects of this were that in
the period 1995–98, net capital inflow did certainly increase, by nearly
30 per cent compared to the earlier four-year period. But net capital
outflow went up even more, by more than 200 per cent, as domestic
residents rapidly (often frantically) acquired foreign financial assets. In
consequence, net capital flows for all developing countries taken
together in the second part of the 1990s were lower than they were in
the first part, by 8 per cent.
Even those previously seen as high priests of market orientation and
financial liberalization are now making similar points. Thus, the World
Bank, in its latest publication Global Development Finance 2000, is skep-
tical about the role played by movements of private capital in further-
ing sustained industrialization.
Jayati Ghosh 47
‘All past episodes of surges in capital flows to emerging markets

have ended in severe international financial crises. Hard landings
rather than soft landings have been the rule… Booms in private
capital flows to emerging markets have been punctuated by frequent
banking and exchange rate crises in the capital-receiving countries,
and have usually ended in severe economic dislocation or political
conflict. By contrast, financial crises and debt overhangs were rela-
tively rare during the Bretton Woods era, when capital controls and
stringent financial sector regulation limited capital flows to emer-
ging markets (although several exchange rate crises did occur). It
remains extremely difficult to determine to what extent these peri-
odic reversals of capital flows have been themselves the cause of
crises or a response to fundamental economic problems in the bor-
rowing economies. Certainly such reversals have responded to
excessive levels of debt, terms-of-trade shocks, or other events that
reduce the prospects for economic growth in the borrowing coun-
tries. However, actions by creditor countries or lending institutions
also have contributed. Monetary tightening in creditor countries
and sudden changes in tolerance for risk on the part of lenders has
sparked crises. Creditors have also contributed to crises by continu-
ing to lend even in the face of evidence that funds were being
directed to activities that could not generate sufficient returns with
which to repay the debts created’ (World Bank 2000: 120)
On a similar note, the World Bank report is cautious about reacting

to the possibility of a renewed spurt in capital flows to developing
countries such as India, the prospect of which currently causes much
excitement among our own policy makers. Thus, while it recognizes
that the current pause in capital flows could last for some years, it also
suggests that factors such as continued technological progress, rapid
economic growth, a favourable political climate, and the ageing of
industrial country populations (compared to the much younger age
structure of most emerging markets) may well lead to a renewed boom
in capital flows to emerging markets over the next decade.
The point, however, is that even such a renewed boom is not seen as
necessarily a cause for celebration among the host emerging economies.
Thus, the report argues that
‘if these inflows continue to be as volatile as they have been in the

past, their benefits to the developing world may be reduced. Also,
the spread of capital flows to countries with weak institutional
capacity may increase the likelihood of crises in those economies.

The great differences in incomes, legal and institutional frameworks,
and cultural backgrounds between creditors and borrowers will tend
to heighten the effects of asymmetric information and encourage
herding among lenders. The growing role of banking systems in
emerging markets in intermediating volatile capital flows could lead
to greater risk to financial systems and could intensify the devastat-
ing effects of crises on economic output, particularly given the
weakness of banking systems in many countries. Finally, continued
financial innovation is likely to facilitate speculation and the rapid
shifting of flows in and out of emerging markets’ (World Bank 2000:
120).
The global media: concentrating culture
By now it is almost a cliché that culture has become an economic good

under late capitalism, or that globalization in the past decade has
accentuated this process quite dramatically. Indeed, the very fact that
it is already a cliché, even though the process is so recent, is a pointer
to the extreme rapidity of social change in the current international
context. But despite this speed, even sudden or short-term cultural
influences tend to leave longer term residues in society, and can have
unexpected consequences.
One of the more significant aspects of the recent process of globaliza-
tion of culture is the idea that culture can be identified and expressed
in physical or other goods that can be traded and sold, such as crafts,
films, books as well as music. Even tourism is often presented as the
selling of particular cultures, the more ‘exotic’, ‘unspoilt’ or ‘non-
touristy’ the better. Trade in culture has become an explosively
growing activity thanks to new technologies, such as satellite televi-
sion, multimedia and the Internet.
Along with this, more and more culture itself is disseminated
through communications media that deal with news, entertainment
and other related aspects. This area is one of tremendous and growing
concentration in terms of ownership and control. Virtually all the
major productive and service sectors in the international economy are
currently undergoing a major process of concentration. To that extent,
the media and communication industries are simply part of a wider
trend, which reflects both the requirements, and the effects of global
deregulation and greater freedom of private enterprise. But the sheer
size of the mergers and acquisitions in this area, in the context of an
Jayati Ghosh 49
industry that was already highly concentrated, suggests that what is

happening here is of a different order. It is also qualitatively different,
because after all the media industries do not just produce ordinary
commodities: they produce the dissemination of information and cul-
tural artifacts that determine how societies think, how much they
know of and how they relate to the world around them, even how they
dream.
That is why it comes as something of a shock to realize just how
concentrated – and highly interlinked – the international media
industry is, and how much of this has occurred in the last decade
alone. The dissemination of information and culture has become one
of the most potent sources of profit for today’s large capitalists. Thus,
the international culture industry is currently the one of the largest
and certainly the fastest growing in the world. According to a
UNESCO study, world trade in goods with cultural content – such
as printed matter, literature, music, visual arts, cinema, along with
photographic and television equipment – nearly tripled in the period
between 1980 and 1991, amounting to $200 billion then. Since then,
it has grown even faster because of satellite technology and other such
vehicles. Internationally, the number of television sets per 1,000
people has nearly doubled from 121 in 1980 to 235 in 1995. In East
Asia alone, the number of televisions per 1,000 people zoomed from
less than 50 to more than 250 in the same period. The number of
hours of television watched globally nearly tripled between 1979 and
1991, and since then is estimated to have grown at an even faster rate.
Because of this, advertisers have also flocked to this medium – as they
are now increasingly flocking to the Internet – and advertising
expenditure in this sector in Europe and North America alone more
than doubled in just five years over the late 1980s.
The multimedia boom has spawned large multimedia companies
who can now be counted among the largest multinational corpora-
tions. This is really a phenomenon of the last decade, or at most the
last fifteen or so years, as giant media firms have sought ‘synergy’
through not just vertical integration but by effectively ‘acquiring
control of every step in the mass media process, from creation of
content to its delivery in the home’ (Bagdikian 1997). The 1990s in
particular have witnessed an unprecedented wave of mergers and
acquisitions among global media giants. As a result, the top six multi-
national conglomerates – News Corporation, Time Warner, Disney,
Bertelsmann, Viacom and TCI – now effectively own and control
huge swathes of the media, publishing and commercial entertainment
activities across the world. Competition between them therefore is also

based on the use of monopoly power and the open attempt to link
activities and consumer choices in different markets.
Many of these firms have explicitly rejected national identities and
posited themselves as global or internationally based corporations,
even though the dominant expression of content, the form of expres-
sion as well as the structures of ownership and management is really
from the United States. It is true that the domination of US-based
media programming has its limits, but the extent to which it neverthe-
less determines both format and content, even when the language used
is other than English, continues to be significant.
Globalization over the past decade has been associated with the
implantation of the commercial model of communication wherever it
did not earlier exist, and its intensification elsewhere. Insofar as this
has meant a reduction in state monopoly over information and its dis-
semination, this is a positive thing. But it carries other, potentially
even greater dangers in terms of the replacement of the state-driven
model of media control with one of control by oligopolistic private
corporations. The expansion, conglomeration and subsequent activity
of these large media firms was closely affected by the changes in gov-
ernment regulation – and effective deregulation – in most countries of
the world in the 1990s. It has been observed that ‘everywhere, govern-
ments are preparing new laws and regulations for the digital era, but in
virtually all of these debates the superiority of the market and the
profit motive as the regulator of all branches of communication is
taken for granted’ (Herman and McChesney 1998: 109). But there are
important reasons why this need not necessarily be the case, and that
is why the current processes of concentration of media ownership and
greater control by some conglomerates of all aspects of the media and
culture business, may have certain negative implications, which in
turn impinge on the freedom of people in society.
The first important implication relates to the fact that markets, and
media activities driven by the market, treat readers and audiences as
consumers, not as citizens. Since what is being purveyed is not an ordi-
nary good, but the very substance of knowledge, which makes for
informed politics, social consciousness and the ability to change the
social, political and economic context, this matters a great deal.
Indeed, in modern democracies, the media play a central role in terms
of the possibility of creating an informed population making choices,
which are critical for their own welfare and for society in general.
There are several aspects to this, which in turn have significance for
Jayati Ghosh 51
democratic practice. Thus, there tends to be a decline in the obligation

to serve non-commercial information interests, such as those involved
in public citizenship, or those which reach particular groups whose
economic power is relatively limited. This effectively marginalizes
the public sphere. On television, for example, when there is public
debate on issues of major political or social importance, it is typically
expressed in minuscule fragments or in such a frivolous manner that
the content is generally missed. This absence of knowledge or access to
it only in truncated and potentially misleading form, undermines
democracy. As Bagdikian (1997) points out, a public, which is inade-
quately informed about the substance of arguments that affect its most
important social policies, has effectively lost the substance of citizen-
ship rights as well.
Related to this is the generally conservative bent of the ‘information’
and analyses that are consequently presented in such media. The
crucial difference between what is good for private business (especially
large, multinational private business) and what is good for the quality
of life in a society gets ignored. This is not so much the product of an
overt conspiracy as a more insidious system of shared values, in which
the journalists, presenters and editors are all part of a system, which
promotes generally conservative economic philosophies. It also means
that in general, most news, analyses and even entertainment programs
are presented in ways that support particular entrenched positions and
are hostile to dissent.
Further, there is another sense in which the tone and content of
media dissemination is not even innocently determined: that relates to
the growing dependence of international media on advertising rev-
enues for its very survival and profitability. In a sense, therefore, while
international media is increasingly concentrated in ownership, it is
actually ‘owned’ by the advertisers. What is notable is that the advert-
ising industry itself is highly concentrated, even as it continues to grow
in both expanding and stagnant markets, because the need to encroach
on rivals’ markets is never diminished. Global advertising expenditure
growth has outstripped GDP growth in every year over the past decade
and the trend is expected to continue.
This, in turn, means that advertisers increasingly determine the
content of media service provision. And as their role in influencing
media content grows, so too the traditional notions of the separation
of editorial and commercial interests tend to weaken. Also, because
advertisers want affluent audiences who are likely to be influenced in
the choice of their consumption, so media content tends to cater to
the more affluent groups in society. This not only has a class bias, it
reveals a basically undemocratic tendency.
This may explain why, for all that the new media seeks to make its
content directed at consumers rather than at citizens in the more com-
plete sense, it still does not accord its consumers complete sovereignty
in terms of choice of content. Finally, owners, managers and editors,
often in conjunction with advertisers, determine the content of most
media dissemination. And this in turn, is influenced by perceptions of
what would be the most arresting image to hold the viewer’s attention
or the reader’s interest, the least demanding and therefore most likely
to be indulged of stories, and the most facile of sound-bytes and
printed epigrams. So the choices available to the consumer of the
various media are limited to those that are consciously provided by
those who purvey this service, and viewers or readers cannot hope to
go beyond this. Numerous surveys among the television watching
households of the US, for example, have found widespread dissatisfac-
tion with the nature of the content of the programs, the extent of gra-
tuitous violence, and so on, and have expressed the desire for
alternative programming – to little avail, because the basic pattern of
the programming has remained unchanged despite such knowledge.
Indeed, the plethora of television channels now available often serves
only to underline this ironic lack of real choice.
Add to this the sheer effect of particular forms of programming and
restricted information spread as well as so much directed advertising,
on the consumption and lifestyle decisions of individuals and house-
holds, and the actual lack of freedom of the recipients of this process of
cultural determinism becomes more obvious. Much in the frightening
manner predicted by Aldous Huxley in his ‘Brave New World’, what
appears to be much more choice and freedom for individuals in differ-
ent societies, ends up being predetermined aspiration without even the
knowledge that it is unfree.
It should be obvious that one other important implication of the
processes discussed here is that the media industry is less competitive
than ever, and is increasingly founded upon a range of monopolistic
practices. This too undermines its democratic possibilities. It has been
pointed out that this coexists with very fierce competitive pressures for
cutting costs and bringing down the bottom line, which in turn have
meant the decline of professional objective journalism. To a large
extent, the fact that profit motivation now dominates over any other
focus in this major social and economic activity has contributed to this
decline. It is not just that serious independent enquiry and investiga-
Jayati Ghosh 53
tive journalism may result in dissident or non-mainstream positions, it

is also that such activity is more time-consuming and expensive than
the quick and facile on-the-spot interpretations which are more com-
monly resorted to.
Of course, the entire picture is not as completely dire as may appear
from this account. Just as technological change at one level has made
the possibilities of and pressures for commercialization and concentra-
tion in the sector much stronger, so it has also created other possibili-
ties of spreading information – chiefly through the Internet – which
are cheaper, more open, more potentially questioning of the dominant
paradigm, and thus more democratic. It is true that Internet access is
still greatly limited, especially in the developing world, but neverthe-
less it does provide new opportunities for access to and dissemination
of information, and views and analyses which otherwise did not exist
or were being increasingly squeezed out by the process of media con-
centration described above.
Globalization does indeed create differences, even as it homogenizes
– but not in the positive form of encouraging genuine creative diver-
sity. Rather, globalization creates far deeper and more pervasive
inequalities – across regions of the world, within countries, across
classes and income groups. These inequalities encompass gaps in
wealth, income, access to productive employment, opportunities and a
whole range of other material and social conditions. And they are
made the more painful by the constant display of the advantages of
being better off, emanating from both media imagery and actual con-
sumption patterns of the wealthy.
The tensions and insecurities brought about by these widening
inequalities cause people to seek refuge in particularities: political sep-
aration, regionalist demands, revanchist cultural movements, and so
on. This may explain why Asian youth in particular appear to be so
susceptible to social tendencies that tend to identify and blame some
real or imagined ‘other’ for the harrowing gap between reality and
aspiration. In India, we are familiar with the growing potency of fun-
damentalist and communalist tendencies and the support for such
divisive forces even among the youth. In Indonesia, the response is
taking the form of Islamicist reaction; in the Philippines growing
support for populist and semi-mystical Christian cults has been noted;
in Malaysia increasing friction between ethnic groups is observed.
Everywhere in Asia, small-scale violence is on the increase, and in
some countries it has unfortunately been matched by large-scale
violence as well. In many countries, the latest social manifestation of
economic crisis is the attack on migrant workers, who are being

harassed and evicted from countries ranging from Malaysia and South
Korea to Bhutan and India.
Of course, there are always some cultural roots to such social divi-
sions, and it would be foolhardy to ascribe all social ills to material
processes. But the role of economic alienation in generating percep-
tions of more fragmented and divided socio-cultural identities, cannot
be denied. Even as the American created ‘McWorld’ expands and,
octopus-like, swallows up other cultures, it sows the seeds of divisive-
ness and suggests its own disintegration. This explains the paradox
that the most prominent recent social result of globalization has been
the assertion of narrow national identity in its least generous form. The
negative reaction to this has come in particularistic and tribalist
responses that often hark back to some imagined glorious past of par-
ticular communities. The sociologist Benjamin Barber called this the
‘jihad’ response to ‘McWorld’.
Of course, this is the most pessimistic and extreme scenario, and
there is much in today’s world that is already fighting against such cul-
tural hegemony. There are other, more inventive forms of cultural
dissidence to a unifying pattern, which sabotage hegemony more
effectively because they reaffirm the basic creativity of human
response. Interestingly, as mentioned above, these are often aided by
new technology such as the Internet, which – at least for now – allows
for an ease and freedom of information dissemination that was earlier
unthinkable. But they are successful only because they resist the
aggrandising onslaught of one form of culture from a position of
confidence and strength in their own, which in turn means with a
basic sense of tolerance as well.
Indeed, that is the basic challenge today for those who want to resist
the hegemonic onslaught of an international propagation of culture
that is both unnecessarily homogenizing and essentially undemocratic.
The need is to forge not only new types of cultural and social responses
without falling prey to reactionary fundamentalism, but also to work
out more creative ways of uniting people across the world who can
maintain their separate identity even as they create a new and more
participatory internationalism.
References
Bagdikian, B.H. (1997), The Media Monopoly, 5th edition, Boston, MA: Beacon
Press.
Barber, B. (1996), Jihad vs. McWorld: How Globalism and Tribalism Are Reshaping
the World, New York: Ballantine Books.
Jayati Ghosh 55
Herman, E.S. and R.W. McChesney (1998), The Global Media: The New
Missionaries of Corporate Capitalism, New Delhi: Madhyam Books.
Huxley, A. (1994), Brave New World, London: Flamingo.
UN (1999), The World Economy in 1999, New York: UN Department of Economic
& Social Affairs.
Press.
—– (1996), Human Development Report 1996, New York: Oxford University Press
UNTAD (1999) Trade and Development Report 1999, New York: Oxford University
Press.
World Bank (2000), Global Development Finance 2000, Washington, D.C.: World
Bank.
4
Globalization, Economic
Restructuring and the Democratic
Implications
William K. Tabb
Introduction
We have witnessed the process of globalization, seemingly increase and

widen economic vulnerabilities with its rapid and dramatic deregula-
tion. The contagion experienced in Latin America and most recently in
the East Asian financial crisis are products of the vast increase in short
term capital movements and international integration. Globalization
broadly, and economic restructuring in Asia specifically, both raise a
host of questions concerning what is best for the people of the region.
While there is general agreement among economists that foreign
direct investment can be a productive source of funds, Professor Jayati
Ghosh, in her chapter in this volume, has pointed out that Foreign
Direct Investment (FDI) has not gone to new plants and equipment.
Mergers and acquisitions do not represent new asset creation but
merely result in a change in ownership of existing assets, which
accounts for 85 per cent of FDI in recent years. In any case, only a
handful of developing countries are experiencing FDI inflows of any
significance. Most receive capital inflows that are negligible in per
capita terms and are small as a share of total capital formation. We are
not witnessing the development of local economies but rather the
growth of foreign control over these economies.
Why then have countries moved away from autonomous develop-
ment models to embrace foreign investment? Professor Ghosh, who is
critical of such developments, suggests that ‘imperialism does not seem
dead at all’ and indeed ‘it may never have seemed so potent’, but why
do host governments welcome the new imperialists? Perhaps a partial
answer can be found in the impact of an increasingly persuasive and
56
William K. Tabb 57
omnipresent media housed in the West that penetrates all corners of

the world. But the deeper answers lie in the coercions of what we may
call the global state governance institutions such as the International
Monetary Fund and the World Trade Organization that increasingly
limit the options of presumably sovereign states. Given the crises
created by globalization of markets and the financial cycles that have
caught so many economies in recent decades, debtors have been ham-
mered into a deeper dependency by the international financial institu-
tions. With that loss of sovereignty they are forced to follow the
policies of the Washington Consensus-privatization, liberalization of
markets, devaluation, deregulation, austerity and in all things except
the police power, a smaller public sector. Given such pressures, local
elites have moved away from nationalist development strategies and
some have found the seductive allure of junior partnership with
transnational capital appealing.
This chapter addresses questions related to these transformations. It
is divided into three sections. The first considers the meaning and
significance of globalization. The second describes and interprets the
contemporary economic restructuring in Asia. The last briefly com-
ments on the democratic implications of these developments and
processes.
Globalization’s meanings
Globalization is often seen as the growing, and in some versions the

unprecedented, international integration of economic life involving, as
Bob Sutcliffe writes, ‘a major rise in trade and foreign direct investment
relative to production, an enormous surge in international financial
transactions, and the growth of global economic institutions such as
the multinational corporation and international organisations such as
the European Union’ (Sutcliffe 1998: 321). He adds, ‘existing globaliza-
tion is characterized by very different levels of global mobility, accord-
ing to which elements of the economy is being referred to. And there is
a tendency for mobility to be greater the more abstract and less human
is the potential mover: finance is the most global part of the world
economy, while workers, especially unskilled workers are the least’
(Sutcliffe 1998: 326). Concern over the relative gains to capital and loss
to labour goes to the heart of the matter for many, and how this aspect
of globalization is treated, whether increased global efficiency or distri-
butional costs, is a key division. Those concerned with economics
focus on efficiency gains and thus see globalization as basically benign
58 Globalization, Economic Restructuring and the Democratic Implications
and beneficial for all in the proverbial long run. Those who come from
a political perspective often stress the seriousness of dislocations and
the impact of the activities, actual and potential, of those who consider
themselves victims of the process.
There is of course this economic base to globalization, driven as it is
by market forces and a new type of scale economies which come from
an Internet access to arm’s length suppliers, customers and relational
contracting alliances. The corresponding governance discussion has
been of the norms and standards appropriate in the new circumstances
and the policies and institutions appropriate to the more open political
economy. However, the social justice focus is never far from view. This
is the perspective which suggests that the market has gone too far in
dominating social and political outcomes. The opportunities and
regards of globalization are spread unequally and inequitably – con-
centrating power and wealth in a select group of people, nations and
corporations, marginalizing others.
Globalization also has ‘a material basis in technological change,
increased trade, investment and financial flows, enhanced corporate
power, an ideological shift in favor of free markets, and the imposition
of laissez-faire policies’ (Goodstein 1998: 298). The stress of an ideolo-
gical shift so that the policies which accompany globalization, neo-
liberalism are understood in terms of the power shift in favour of
corporate dominance. Richard Higgott, as part of his remarks on the
75th anniversary of the journal International Affairs, suggested that
perhaps the most important issue in international affairs in the next
century will revolve around the relationship between the impact of
globalization and the unbundling of territorial boundaries and the tra-
ditional sense of justice tied to ‘Westphalian coordinates’ which have
come unmoored. He suggests that reweaving the social bond in a post-
Westphalian order, under conditions of globalization is more than
a normative question, if indeed the normative issue of justice can be
separate from a positive analysis of globalization whose interpretative
subjectivities are integral to its definition (Higgot 1999).
What happens is that during waves of rapid globalizing change,
when ‘all that is solid melts into air’, those with short historical per-
spectives see the emergence of something totally new and unprece-
dented; in one sense they are right. The forms of globalization of each
globalization era are new even if the phenomena which they represent
is of long standing. The immediacy and the disruptiveness of the
changes are none-the-less real and often terribly painful. People organ-
ize to protect themselves as best they can against the destabilizing
William K. Tabb 59
force of the ‘creative destruction’ which threatens to sweep away secur-

ity they have known. Thus, there is both continuity and dramatic
change.
The conversations of efficiency and social justice cannot be kept sep-
arate because the popular movements have been able to make them-
selves heard and can no longer be ignored, but also because the
negative social impacts of globalization affect the interests and con-
cerns of the powerful directly and in numerous unforeseen ways. Non-
traditional threats to national security are increasingly evident.
Organized crime and drug trafficking, environmental catastrophe,
rapid population growth and massive migrations of undocumented
economic refugees of civil wars, economic stagnation and collapse, and
failed states are all front burner issues. Consider the way AIDS has
come to be perceived as a major threat to national security by US mili-
tary planners. It is, in an odd way, characterizing globalization’s
dangers. The thought that economic efficiency is all that matters and
can be the sole criteria for judging globalization is simply not tenable.
Recent financial crises in Asia and elsewhere have narrowed acceptance
of repressive development state regimes whose authoritarian rule and
grossly unequal distribution of wealth and power are no longer so
easily rationalized as necessary for growth. Corrupt leaders and their
partners in plunder are widely blamed by victims of these financial
reversals and there is a widespread view that much of the corruption
could be avoided or moderated with more open polities with active
movements of the democratic base.
The debate for the most part, however, is whether globalization is
‘good’ or ‘bad’, although it is becoming clearer that matters are more
complicated. It is an important task to sort through the intricacies of
who globalization is good and bad for, and how it might be made
better for those who are considered to be paying unacceptably high
costs. The operation of the globalization process takes place within,
and is mediated by, a set of governance frameworks stretching from
the transnational to the local. It is the nature of these institutions,
their operation, and the ways they could be restructured which is cen-
trally important. Accepting the free market outcome is not really a
possible answer. Markets are always embedded in a larger societal
framework. They require social mechanisms to enforce contracts, and
standards for judging what is permissible behaviour by participants.
When market outcomes favour a smaller minority and seriously dis-
commode majorities, these rules come to be questioned and there are
political ramifications which typically produce organizing efforts and
movements which eventually change the rules of the game. This has
historically been the case. The East Asian financial crisis and the
manner in which the US Treasury Department and the International
Monetary Fund have handled it provoked just such a rethinking.
The contrast between the policy measures traditionally taken in the
core countries, from deficit spending to ward off contractions to gov-
ernment subsidies to controls to prevent financial crises, contradicting
with the advise-cum-orders the IMF gave to the East Asian economies
in the wake of the region’s crisis. The IMF, the debt police, the enforcer
for US imperialism in the eyes of many has, in its evolution over a little
more than half a century, transformed itself profoundly. Initially, when
its clients were the Western European countries, it was an instrument-
ality devoted to promoting economic growth in time of unexpected
adversity, providing liquidity to avoid the deflationary impact financial
crises could generate. It has increasingly weighed its emergency loans
with an ever-growing list of conditionalities which more and more
tightly constrain borrower policies. Countries are forced to make so-
called structural reforms that they prefer not to make and indeed were
unwilling to make until their desperate situation gave them no real
choice but to accede to the Fund’s demands.
‘Conditionalities’, as Joseph Stiglitz, the former Chief Economist at
the World Bank, recently fired for his outspokenness, has said, ‘are
adopted without social consensus. It’s a continuation of the colonial
mentality’ (Komisar 2000: 36). The Bretton Woods philosophy was just
the opposite. To prevent global slowdown it was proposed by Keynes
that an international currency be created for accounting purposes
between countries and liquidity be made available as needed, quickly
and easily in the case of financial crises. The United States preferred to
see the dollar, under its own control, as the international currency and
the contemporary IMF forces opening of economies to foreign
investors who supply liquidity by purchasing local assets which are
vastly and temporarily undervalued. This forcing of contractionary
policies is, as Stiglitz says, ‘just the opposite of the economic analysis
that was the basis of the founding of the IMF. Why? In order to make
sure that creditors get repaid’.
To better understand how these elements have been playing out in
Asia in recent years and how they are likely to influence the trajectory
of democratic possibilities in the future, we need to consider the
region’s economic evolution in the decades immediately preceding the
crisis and how the interests of finance capital and its government allies
in the way the crisis was addressed impact contemporary develop-
William K. Tabb 61
ments. In this chapter, I focus on the East Asian economies through

the lens of the financial crisis of 1997–8. This is not to say that the
other countries are unimportant. Indeed the two giants of developing
Asia, China and India, are both fascinating and profoundly important.
I can only comment briefly on them. China has studied the strengths
and weaknesses of the variants of East Asian experience and, given its
own history, aspirations and the contemporary global political
economy, has drawn on East Asian development patterns to fit its
understanding of what is possible and desirable in terms of its own
development. It has adopted a strategy that has combined as tight a
control by the Communist Party as it can manage with a set of carrots
and controls to attract and manage foreign investors. China’s desire to
be admitted to the World Trade Organization and to gain normal trade
status with the United States has led to modification of this strategy in
ways that reflect substantial risk taking on the part of the government,
but which nonetheless leaves the Chinese state more control over its
economic destiny and greater autonomy in its foreign relations than
any other developing nation has managed to achieve in the current
conjuncture.
The case of India is also exceedingly interesting. It too is, potentially,
an economic force of major significance. As it opens its economy, it
faces similar questions as to timing and extent of liberalization. India
has been cautiously moving toward a greater openness for some time
now. Given the severe dislocations liberalization typically has entailed
for Third World countries and a weak central state control structure,
how India proceeds and what sort of policy mix makes sense are not
easy questions to answer. Because we are fortunate to have a number of
South Asian colleagues with us, I am fortunately relieved of the need to
deal with these difficult matters, but the interplay between neo-liberal
policies and their consequences for ethnic strife are present and partic-
ularly important in that country as well as a number of others in the
region.
I would comment though that the pressures on India and China are
not as immediate and pressing as those placed on the other East Asian
economies by the financial crisis. India and China had not allowed
their currencies to become convertible and maintained protectionist
safeguards in trade and investment and so buffered their economies
from the destabilizing wave of speculative inflows and outflows which
were so damaging elsewhere. They are nonetheless under globalization
pressures. Wishing more rapid economic development, they seek to
attract foreign investment and with it the advanced technology and
access to foreign markets which may be an engine for growth. But they
too must come to terms with globalization, its benefits and its poten-
tial costs. The clearest cases are perhaps, though, those of the Asian
NICs, the Newly Industrializing Economies, and especially South
Korea, the largest of these.
The role of the state
If there is, or was, an East Asian development model, a conjecture

which is hotly debated, it is widely agreed that state power can be used
to help national capital compete in global markets by protecting local
firms from foreign competition, providing them with low cost capital
as long as it is employed for productive investment, preventing funds
which are needed for domestic investment from draining abroad either
into higher return foreign investments or into excessive luxury imports
and holding down labour costs by whatever means. In the ideal type of
East Asian development state model, local banks provide the conduits
for mobilizing domestic savings and allowing national capital to
expand continuously without risk that loans will be called or borrow-
ing costs increased. Foreign banks were prevented from either entering
or playing a major role in a nation’s economy so that these conditions
could be maintained. Repressive governments prevented independent
labour unions or oppositional political movements to keep the con-
sumption of the masses to a minimum so that accumulation would be
maximized. Each of these elements is undergoing transformation in
the economies of the region.
State-led development, using below market financing and high lever-
age, successfully built industrial capacity capable of breaking the indus-
trial monopoly of core producers. The first to do so, Japan, South Korea
and Taiwan, were encouraged by the US for geopolitical reasons. The
then threat of communist China trumped the usual American deter-
mination to avoid Third World industrialization in those years. With
time, the prospects of low cost manufacturing in the region as a source
of potential profitability for US-based transnationals changed the
strategic outlook of the American state. National capitals in the region
took advantage of this opening to assert substantial control over
their country’s development. Other, weaker nations were mere export
platforms for US and Japanese transnationals.
For decades, governments used banking as a vehicle for the statist
developmental strategy (complete with political patronage and eco-
nomic corruption, which did not seem to be a serious handicap until
William K. Tabb 63
external conditions changed). Banks, by mobilizing resources on a

massive scale and allocating them at low cost to favoured industries,
allowed these countries to enter world industrial markets as producers.
The high leverage was the tool of national development policy. This
Asian economic model, which for three decades moved more people
out of poverty faster than ever before in the history of capitalism, is
now convicted in the eyes of many economists on the very basis of its
past success: ‘the trinity of over-investment, over-spending, and over-
guidance’ (Fallows 1997: 11).
This accumulation regime foundered on two unyielding rocks. The
first is global overcapacity. The second is the collapse of financial
bubbles which were produced when expanded productive investment
opportunities could no longer be found for the vast savings these
economies generated and, more importantly, as it turned out to the
foreign borrowing their success encouraged. As funds which could not
be invested productively found their way into property and stock
market speculation as well as corrupt borrowing by companies whose
only claim to new loans was their political power to extort them, a
bubble of excess grew and inevitably burst. High gearing ratios
which, by Western standards represented excessive and unsustainable
leverage, were central to the high growth regime. Liberalization of
financial markets and a slowing of growth undermined the viability of
many companies and banks. As the extent of bad loans dramatically
increased, the state was no longer able to guarantee credit viability and
the system began to fall apart. The economic transformations which
followed financial crises were recognition of this reality. Of course the
better connected operators continue to look to the state for protection
and much of the manoeuvring in the economies of the region involve
who will have to pay and how much in the shakeouts. At the same
time the force of the changes unleashed by the overextensions will
hardly allow the old order to be reconstituted without serious
modification, if at all. A brief recounting of these events should make
this clear.
Over the years 1995 to 1997, the dollar rose in value by about 50 per
cent against the Japanese yen. Countries which had tied the value of
their currency to the dollar, therefore, saw their currencies appreciate and
the price of their goods go up, reducing their export competitiveness. As
their economy slowed, debt burdens increased, and their property
boom became shaky. Investment slowed and their balance of payment
deficits grew. The pressure led to devaluation of their currencies and so
refinancing dollar-denominated debt increased dramatically at the same
time as ability to repay weakened substantially. Bankruptcies followed.

Thailand had foreign obligations which exceeded 4 per cent of its GDP
for a half dozen years preceding its crisis, but it was only when growth
slowed that investors became concerned. They rushed to protect their
capital, getting as much out of the baht as fast as they could.
Governments in such a condition could try to defend their currency’s
value by offering higher and higher interest rates to compensate lenders
for possible devaluation. But such high interest rates, 50 per cent or
more, hurt domestic industry. Further, local banks were hesitant to lend
at any interest rate. They had so many bad loans that they needed to
build up reserves. Local companies with contracts to export could not
honour them because they could not get short-term loans to finance
production and export of their products. This ‘credit crunch’ destroyed
basically healthy businesses as well as weak ones. It is at this point that
we started to hear so much about ‘crony capitalism’. Many of the bad
loans had been made to politically connected borrowers often without
adequate collateral, or any collateral. Banks went bankrupt and
demanded government bailouts since the lending had been at the
request of the politicians and other officials.
For a year or so preceding the collapse of the baht, Thailand had been
urged by the IMF to reduce its short term borrowing and do something
about its banking system and speculative lending practices. The early
warning system that the IMF had so proudly put in place after the
Mexican peso crisis in 1995 failed because while the IMF gave the early
warning to Thailand, the Thai leaders who were making money hand
over fist were not inclined to listen. Local elites understood the basic
rule of capitalism is to get rich. They did. They denied anything was
wrong for as long as they possibly could. Since other countries in the
region had been following basically similar practices they too were vul-
nerable and a domino effect or financial ‘contagion’ spread. Thailand’s
problems, it turned out, were part of a larger context involving overca-
pacity, described earlier, and the inability of the Asian miracle economies
to sell enough even at lower prices to finance their corporate borrowing.
Further, just as the East Asian economies had taken over labour intens-
ive commodity manufacturing from high wage Western nations, China
increasingly undercut all other East Asian producers. Thailand had bor-
rowed more than other East Asian export regimes as a percentage of its
GDP, and so crisis struck there first. But the Bubble Economy, over bor-
rowing to finance golf courses, condos and upper class shopping malls,
fed by foreign borrowing to meet a market created by a class of con-
sumers which was created by the very boom in foreign borrowing and
William K. Tabb 65
a development model built on low wage, police state repression of

mass movements could not outlast the global slowdown and the over
investment and asset speculation it produced.
Investors claim they did not know the ‘real situation’. Solutions from
such a perspective call for better and timelier information and what is
understood as ‘greater transparency’, a phrase which seems to mean
that Asian businesses should use US-style accounting and disclosure
standards. Yet it seems clear that investors asked few questions. They
were attracted by high-expected returns and pushed by low returns at
home. Surely the way these economies operated did not change. For
example, in Indonesia, one of the hardest hit, growth had been a steady
6 to 8 per cent a year for a decade. The banks lent to whomever the
government told them to, and this often included the children of the
Indonesian dictator and most members of the parliament, which acted
as a rubber stamp for the dictator for three decades. He also appointed
the upper ranks within the military which ran the country. Until the
early 1980s the banks were in fact state-owned. After that, interest rates
were freed, new licenses given out and private banks proliferated.
By the early 1990s, bank credit was expanding by about 50 per
cent a year, clearly an unsustainable situation. Non-performing
loans grew but there was little or no regulation of the banks so losses
could be covered up. Indonesia was not, and is not, the only country
where losses were hidden and bogus figures were published.
Accounting rules throughout the region are weak and enforcement
weaker to non-existent. As in Russia and much of Latin America as
well as Korea and elsewhere in East Asia loan classification rules
were, and continue to be, ‘adaptable’. Banks appear to be making
good profits up to the moment they are threatened with closure.
Large financial groups that guarantee loans for other companies
have huge but non-disclosed, exposures. As long as growth contin-
ues none of this really matters. When growth slows the high debt
ratios become unsustainable. Private foreign capital that had flowed
in so freely crowds the door in a mad rush to exit the weakening
economy thereby dramatically worsening the situation.
One important question which needs to be faced is will the emer-
gence of greater democracy change the political structures which have
defined the pattern of economic relations in these societies? On the
economics side it is the model of high debt ratios that needs to be
addressed. Paying down debt seems to be happening in some measure
through retrenching and to some extent by foreign capital coming in
to shore up operations.
The political side involves the extent to which favoured interests will
be protected from market forces and the degree to which popular
movements are able to change the role of the state in economic policy
to include safety net and social investment funding so that growth can
be on a more inclusive basis. Democracy which led to the empower-
ment of groups of the base and popular mass movements would in all
likelihood push for a development strategy which gives local demand
for collective goods and higher living standards a more central place,
decentring the almost exclusive export orientation of these regimes,
and an economy in which the wages and working conditions, and not
simply foreign investment and rapid accumulation, would figure more
prominently. Addressing the way the US Treasury and the Inter-
national Monetary Fund have attacked the developmentalist state does
not address this second critique of the regional economies’ ever dom-
inant development strategies. Therefore, while economists concern
themselves with the economic transformation the financial crisis has
brought on, this is hardly a sufficient discussion. Nonetheless, we
will say more about this mainstream debate before considering the
potential for very different emphases which may flow from greater
democracy in the countries of the region.
The debate
Mainstream financial theory rests on what is known as the Modigliani-

Miller (M-M) proposition. It asserts that the capital structure of a firm –
the mix of equity and debt on its balance sheet – doesn’t matter. M-M
claims that the market value of any firm is independent of its capital
structure. For many East Asian economies this seemed to be wrong.
The high debt levels of these companies meant that any slowdown dra-
matically increased their fixed costs since unlike stockholders who can
be put off with low or no dividends, bond holders must be paid on
time and in full. As long as these companies were profitably expanding
such high leverage made sense. It allowed faster expansion. Local com-
panies were in a position to undertake high risk potentially high return
projects which required large amounts of capital; for example chip, fac-
tories which cost a billion dollars or so each. But when economic
growth slows the debt burden can become intolerable. Governments,
so long as they were able to keep financial markets closed to capital
flight, could weather crises by backing loans made and keeping the
companies afloat through periods of negative cash flow until economic
recovery allowed restarting debt repayment. Government guarantees
William K. Tabb 67
thus allowed more risk in the system than otherwise would have been
possible – and higher growth. Loans were made not because of the via-
bility of particular projects but because lenders felt more protected
against loss by such implicit state guarantees. In the 1990s, under pres-
sure from international finance and the US, government which opened
financial markets lost considerable control over their economies.
The supporters of state-led growth argue that it is financial liberaliza-
tion (which allows free short term capital flows) which has produced
the region’s liquidity problems and undermined the high debt system
which has been so effective. Without the government being able to
stop short term capital flight debtors are unable to continue to finance
their obligations. Open capital markets in a period of slow growth have
effectively undermined the system which has for decades produced
record growth. The most extreme case is perhaps that of Korea where
the sales of the top four chaebols, the conglomerates which like the
Japanese keiretsu after which they are modelled, own all sorts of busi-
nesses from consumer electronics to steel mills to banks, generate half
of the country’s exports. They depend on very high leverage and con-
tinuous expansion to legitimize borrowing which in turn depends on
increasing exports. Any brake on expansion means diminished capac-
ity to meet interest payments and makes rolling over borrowing more
difficult. When Korea’s growth rate fell from an outstanding nine
percent in 1995 to a still quite remarkable six percent in 1996, the
slowdown was accompanied by a doubling in the country’s trade
deficit. In its state-controlled system, Korea’s widely used short term
debt instruments – predominantly three- and six-month promissory
notes (OUM) which are typically continuously rolled over – planners
who strongly influenced bank lending practices had a powerful lever
with which to direct national development. They could exercise dis-
pleasure at particular corporations by discouraging rollover of their
OUM falling due. The system was more complicated in that companies
used OUM rather than cash to pay each other and firms could take
these promissory notes to banks for discounting should they need
cash. So many of these notes were in circulation that they represented
a huge burden on the system should they not be honoured. The rising
number of bankruptcies Korea experienced from 1997 reflected just
this occurrence.
The Korean government has felt popular pressure to reign in the
chaebol whose monopoly position, expansion for growth’s sake, and
predatory practices toward smaller firms had increasingly slowed
Korea’s growth and threatened its future. However, the former
President Kim Young Sam was unable to make much progress given a
legislature beholden to bank and chaebol interests which financed a
majority in the National Assembly who were not about to bite the
hand that fed them so that corporate governance standards, account-
ing transparency and an end to cross lending guarantees for sub-
sidiaries and affiliates could occur. Consequently, none of these measures
has made significant progress. By the fall of 1998 industrial production
had fallen by almost 50 per cent and unemployment was above 10 per
cent and rising in a country with little in the way of a safety net and
small chance of finding new employment. While there has been some
recovery at this writing, the cost to individuals and family life have
been devastating for millions.
Certainly most Koreans believe their system needs reform. Citizens
in Southeast Asia, the MIT countries (Malaysia, Indonesia and
Thailand) and the Philippines hold similar views of the need to change
their governments. The suffering of the crisis has made people angry
about the lack of democracy and accountability of ruling elites. Still a
question remains as to whether the West led by the United States has
the right to impose changes in this moment of crisis, changes which
are guided as much or more by the interests of Western capital as by
any commitment to democratic reform. The structural adjustment
being forced on the East Asian countries specifically in the wake of the
financial crisis, but on the other countries generally as part of the strat-
egy of the IMF and those who influenced the direction of its policy
strategies, has been widely criticized. As the IMF has made increasing
demands on debtor countries for more basic structural changes in the
way their economies operate, especially in the state-corporate relations
characteristic of the East Asian developmental model(s), such criticism
has become more vocal and some of the most stinging rebukes origin-
ate in surprising places. An example is, Henry Kissinger’s dialogue to
the 1988 Meetings of the Trilateral Commission.
In Southeast Asia, I believe the attempt to solve a currency problem

with a huge program of economic reform has created a massive
political problem that makes the economic problem insoluble. It
means that every economic proposal is seen through the prism of an
attempted political revolution by the outside world. Must every last
economic institution of the West be transported to other countries?
When a country is in trouble, is it really true that globalisation
requires that the first thing we tell the country is to devalue its cur-
rency and increase unemployment? Is there no positive message we
William K. Tabb 69
can bring them, except that in three years you may be able to go to
the market again? (Kissinger 1988: 47)
In a similar vein, the influential conservative Harvard economist and

head of the National Bureau of Economic Research Martin Feldstein
has written: ‘A nation’s desperate need for short-term financial help
does not give the IMF the moral right to substitute its technical judg-
ments for the outcomes of the nation’s political process’ (Feldstein
1998: 27). Feldstein argues that it is not the IMF’s business to impose
other structural adjustments not related to the balance of payments
even if such changes would, or might, improve long term performance
of the economy in question. Jagdish Bhagwati, the prominent
Columbia University trade theorist, introduced the term ‘Wall
St.-Treasury complex’ paralleling the military-industrial complex which
President Eisenhower in his farewell address warned was achieving
unwarranted power over the US political economy. What Bhagwati
had in mind was that US economic Robert Rubin, Bill Clinton’s power-
ful Secretary of the Treasury, who was disposed to think that capital’s
freedom to move in and out of national economies is a right which the
American government must defend as a priority of international pol-
itics, was guiding policy. Professor Bhagwati and others question
whether Wall Street’s interests should come before the right of sover-
eign nations to protect their economies from the devastating impact of
short-term capital movements (Bhagwati 1998). From the progressive
side Robert Wade, a Brown University political economist, likens the
IMF’s interventions in Thailand and Indonesia ‘to screaming fire in the
theatre’ and ‘its intervention in Korea amounted to screaming louder’
(Wade 1998).
In 1944 at the Bretton Woods conference, which created the IMF,
John Maynard Keynes for the British and Harry Dexter White for the
Americans had been adamant that liberalization of the capital account
was harmful and to be avoided at all cost. It would rob countries of the
ability to follow independent economic policies. Importantly Keynes
was of the view that markets were irrational. The herd mentality led to
bouts of over-optimism. Overextension led to deep pessimism which
also had a tendency to persist too long. Governments had to protect
their citizens from runaway animal spirits. As the Keynes Plan pro-
claimed ‘it is widely held that control of capital movements, both
inward and outward, should be a permanent feature of the post-war
economy.’ The central argument was enshrined in Article VI of the
IMF’s Articles of Agreement which endorsed capital controls (and
which the IMF now wants to abolish). Echoing Keynes, Martin Wolf
has described the recent situation: ‘The capital markets, when they
were euphoric, simply ignored bad news. And when depressed, they
have simply ignored the good news. Either way, they have overshot
wildly, and have destabilized the host economies in the process’ (Wolf
1988: 11).
Markets have been able to destabilize basically healthy East Asian
economies because the core countries, primarily the United States sup-
ported by Great Britain, have promoted financial market opening
which was in the material interests of their financial communities. It is
they who have been the greatest beneficiaries of the new global
financial regime which undermined the Bretton Woods system. The
recipient countries, while profiting from direct foreign investment
which brings with it technological, management, and marketing
advantages, are not capital short economies. They are major savers.
They did not need the inflow of speculative capital for national devel-
opment. It has brought asset inflation which has proven to be quite
costly. Indeed, those nations, China, Singapore and Taiwan, which
have the largest foreign exchange reserves, have been able to withstand
the speculative threat. In one of history’s great ironies the countries
which have controlled capital flows, and these range from Chile to
India, have not been devastated by financial crises. They provide a
counter model for those who now think about imposing restrictions
on capital flows. In doing so their experience lends support to the
Keynes approach which the IMF has undermined.
In the 1990s, deregulation of capital markets in Asia had allowed
massive inflow of short-term capital at a much faster rate than the
underlying rate of growth of the economies in question. Despite main-
taining favourable macroeconomic fundamentals (growth rates and
savings rates were high, inflation low, government deficits under
control) they then became vulnerable to destabilizing capital flight
when growth slowed down. Kiichi Miyazawa the former Japanese
prime minister speaking to a 1998 Trilateral Commission gathering in
Berlin who summarized the case along these lines, saw the crisis as
demonstrating ‘the failure of the market’. ‘In a nutshell each of these
countries failed in their national portfolio management of assets and
liabilities.’ But if the IMF is able to enforce free capital mobility under
all conditions at all times, nations can hardly manage such portfolios.
They are passive recipients of what markets decide.
Indeed, the economists endorsing IMF Washington Consensus con-
ditionality have complained that the crisis appears to have ended too
William K. Tabb 71
soon. By mid-1998 it had bottomed out denying further leverage to

force more unpleasant medicine down the throats of the economies of
the region. The accelerated liberalization which brought on the crisis
was the medicine the patient was urged to continue taking. Even
though the roots of the crisis were in private sector decisions in the
increasingly unregulated environment, the cure was said to be more
freedom for speculators and fewer social controls. The nationalization
of the resultant unsustainable private debt obligations undermined
prudential lender behaviour, and forced high interest rates at the
expense of local economic development to pay off the foreign credi-
tors. Stiglitz was not alone in observing that ‘the lenders in the more
advanced countries tend to recover most, if not all, of the amount lent,
with the cost of the bailout, including the cost of economic restructur-
ing largely borne by the workers’ (Komisar 2000: 36). The Economist,
home of the laissez-faire empire, noted that political and strategic argu-
ments trump economic considerations which often become secondary
in the way the Fund addresses financial crises (The Economist 1999).
The cost to the region has been substantial.
The losses from the East Asian financial crisis from 1998 to 2000 are
estimated at nearly two trillion US dollars (an amount double the
current income of the poorest fifth of the world’s population). It was
paid in the loss of livelihood for tens of millions, dramatically increas-
ing poverty, loss of savings, and indebtedness, and reducing health
care, schooling and other costs. The recovery since the nadir of the fall
of 1998 was witnessed in output growth, exchange rate stabilization
(although there has been deterioration again with higher US interest
rates since April 2000), and improvement in balance of payments. As
in past crises these macroeconomic balances can recover fairly quickly
while it takes considerably longer for employment and especially real
wages to return to earlier levels. An analysis of 80 countries over
roughly the last quarter of the 20th century and the 300 crises they
have experienced shows output growth recovers to pre-crisis levels in
one year on average after the peak of the problem period but income
distribution worsens for three years and real wage growth takes about
four years to recover. World Bank data also shows an asymmetrical
effect in which in good times the gains of the poor are proportionately
smaller then their losses in bad times. In the New Economy era, grow-
ing income inequalities everywhere may be intensifying this pattern.
The latest published World Bank data shows unemployment is down
but still fairly high in the five Asian countries most seriously affected
by the financial crisis and that regional pockets of poverty have spread
(World Bank 2000). These five crisis countries have seen their curren-
cies, the baht, peso, won and ringgit, stabilize, but at 30 per cent or so
less than their pre-crisis values and in the Indonesian case, the rupiah
by 60 per cent or so through April 2000. Since then higher U.S. interest
rates have pushed the value of these currencies lower. The crisis has left
heavy debt and greater economic insecurity. Commercial bank non-
performing loans at the end of 1999 officially ranged from 20 per cent
in Korea to 70 per cent in Indonesia with Malaysia at 24 per cent and
Thailand at 40 per cent. The figure for China was perhaps 25 per cent
based on government data, although private estimates range sub-
stantially higher. A minimum of 40 per cent of China’s state enter-
prises are deemed unprofitable and their unpaid obligations are large.
Government debt everywhere has become significantly higher. Recap-
italizing the region’s financial institutions has been expensive, equal to
about 16 per cent of the GDP in South Korea, 32 per cent in Thailand
and 58 per cent in Indonesia.
There is nothing unexpected about any of this. Unfortunately this is
the way the system operates. As Immanuel Wallerstein writing on the
history of the world-system notes,
Capitalism is based on the constant absorption of economic loss by

political entities, while economic gain is distributed to ‘private’
hands. What I am arguing, rather is that capitalism as an economic
model is based on the fact that the economic factors operate within
an arena larger than that which any political entity can totally
control. This gives capitalists a freedom to manoeuvre that is struc-
turally based (Wallerstein 1974: 348).
How much room they have to manoeuvre is not of course pre-

determined. It depends on popular awareness and political struggle. In
much of Asia today, since considerable banking and other corporate
assets have come to be owned by the state as a result of bankruptcy
during the financial crisis, how these are privatized may, as Kawai and
Newfarmer write, ‘shape the distribution of assets for generations to
come – as well as the course of economic performance’ (Kawai &
Newfarmer 2000).
The current conjuncture
The economies of East Asia seem to have recovered much faster from
the 1997–8 financial crisis than many thought possible. The resur-
William K. Tabb 73
gence evident by the spring of 2000 led observers to see the region as
‘riding a wave of growth reminiscent of the Asian miracle of the
1980’s’ seeming ‘to make the Asian crisis a distant memory’ (Landler
2000: 1). Of course trends reverse. A slowdown in the American
economy affects exports from the region and so impacts its growth
rate. The structural changes already forced on the region make their
economies even more dependent on global markets. Kawai and
Newfarmer are not alone in thinking that ‘East Asia is vulnerable to
external shocks in ways fundamentally different from the days before
the crisis’ (Kawai & Newfarmer 2000: 11). The uncertainties in the
region’s biggest economy, Japan, and the future of China are a big
question mark. Nor is the rest of Asia a homogeneous entity in which
internal developments are unimportant. Nonetheless, we can perhaps
usefully draw a line familiar to students of the region, at the Tropic of
Cancer and distinguish between the economies of north east Asia and
those of south east Asia. Investors seem to have drawn such a line.
North of it, Taiwan and South Korea as well as India’s emergent soft-
ware industry and Hong Kong’s Internet start-ups attract investor
attention but Indonesia, Thailand and the Philippines do not. The
political instability, prevalence of corruption which impacts both
business expectations and political stability as well as the prevalence
of an Old Economy low value added manufacturing base do not now
attract investors (Karmin 2000: C1). Pressures to restructure will con-
tinue to be felt.
Liberalism, liberalization, and the prospects for democracy
As we now turn to the question of the implications for the future of

democracy in the region, in light of the economic restructuring which
has been described, it is useful to review the two central elements of
classic liberalism resurgent in the present conjuncture which are being
urged on the region. The first element is participation in governance
by the broad populace which democracy promises. The second is that
of market liberalism, the promise of individual equality in the market-
place. This is the freedom to make what one can of oneself without
ascriptive limits based on birth family status and caste privilege.
However the move from tradition exposes individuals to new forms of
risk. For example, the increasing prevalence of formal democracy is
problematic in the context of dramatic inequalities in wealth and
power. Furthermore, the emergence of a risk society implying that risks
are spread evenly elides the reality that some countries, groups, and
categories of individuals are more risk prone than others. Risk is

unequally distributed geographically and, if you like, sociologically.
To talk of democracy in the presence of great income inequality is
problematic. As I read the English language press from the Asian
region, I am impressed by both the wrenching impacts of economic
difficulties for the masses on the one hand and, in countries where the
media is allowed to carry such stories, descriptions of corruption of the
political system on the other. Their stories recount how the wealth of
many government ministers doesn’t tally with their regular parliamen-
tary income. Generals’ wives also seem to have remarkable net worth.
Our attention at this volume is on Asia, but we need only look to the
current presidential campaign to be reminded that money politics in
the United States, and we may add, and in most countries, exercises a
substantial role.
More controversially perhaps, I want to suggest that part of the push
for greater accountability and respect for democratically established
rules comes from Western governments on behalf of transnational
capital. During the Cold War era and even earlier through the era
in which foreign states ruled through local intermediaries, a certain
amount of graft was accepted as the price for smooth accommodation to
foreign interests. The old dispensation endorsed strongman rule so long
as the local elite kept its people in line and allowed the extraction of
surplus by the imperial powers. In the new situation, with the end of the
Cold War, and the attempt to create a unipolar New World Economic
Order along neoliberal globalization lines, the rent seeking by undemoc-
ratic and repressive regimes is no longer neither needed nor viewed as
optimal. They introduce a large element of uncertainty to business deal-
ings and extract payments from all who would do business in the
country, locals and foreign investors alike. Such regimes are no longer
needed: the Cold War is over, national liberation struggles appear a
thing of the past, and, in Margaret Thatcher’s famously confident for-
mulation, ‘there is no alternative’ to the market. Formal democracy is
the governance structure of choice in the new situation. It encourages a
growing middle class while disempowering popular movements which
lack the money to compete in media driven electoral politics.
The crisis is the occasion to effectively pressure these countries to sell
off assets to foreign capital. This is more smoothly achieved when it is
a democratically elected government which carries out the policy.
There may be grumbling but people are more willing to accept that the
government had no choice. A government lacking democratic legiti-
macy carrying out unpopular measures will stir up more opposition.
William K. Tabb 75
The demands for trade liberalization and further loosening of capital

account freedom are likely to be counterproductive and painful in the
short run and perhaps the long run as well. It is my view that in the
absence of a plausible alternative (with the petering out of national lib-
eration movements, the weakness of what had been a more effective
non-aligned movement in the years of the Cold War, and indeed the
removal of the support the USSR could provide for those countries
willing to combat Western imperialism), transnational capital prefers
to work with formally democratic regimes.
The demand that their economies be transformed in an ‘Anglo-
Saxon direction’, as Martin Wolf of the Financial Times phrases it, is a
call to surrender autonomy and fall in line with the global changes
being demanded by transnational corporate capital led by the
International Monetary Fund and the executive branch of the United
States government in negotiations with debtor states. Democratic gov-
ernments in debtor countries are more able to sell the need for such
adjustments. Formal democracy allows an easier acceptance of neo-
liberalism and an undermining of nationalist development alterna-
tives. This is not to say that even inadequate democratic governance
may not be an improvement over despotism but the character of
democracy on offers needs to be interrogated and critiqued.
For example, one can say that Korea’s problems are ‘political’ but
there is more at stake. The demand is for the dismantling of the devel-
opmental model which had served Korea well for the decades of record
growth, rather than the sort of democratization that the brave popular
movement activists had in mind when they went up against govern-
ment troops in the streets demanding democracy. The winners from
further regime change along these lines are likely to be foreign investors
and benefits may not go beyond the middle class to the vast majority.
In Southeast Asia more generally the case is being made that crony cap-
italism has been the problem preventing better adjustment to the
international financial crisis. Growth had covered up corrupt practices
which were suddenly exposed when exports slumped. At the larger
level the regimes of not only most of Asia but over long periods in
Africa and Latin America, in which corruption and repression flour-
ished, were the creatures of the Cold War period in which the United
States supported dictatorship as the best obtainable bulwark against
communist-led or potentially influenced popular movements. These
regimes kept the red menace at bay. In the post-Cold War era they are
expendable. They are no longer needed with the demise of commun-
ism. Globalization now allows, and benefits from, dismantling of these
corrupt, rent seeking regimes. A rule of law and more honest enforce-
ment of contracts, the end of extortionist practices by local officials
and the favouring of domestic elites in the marketplace is in the inter-
ests of transnational capital. The current crisis represents an opportu-
nity to transform these regimes. But the causes are also to be found in
the extremes of foreign capital flows, speculative excess, and over-
capacity, phenomena which implicate transnational capital which
now stands to benefit from the solutions being imposed by the
International Monetary Fund.
There can be little question that globalization limits meaningful
democracy. Much of government decision-making is displaced to the
agencies of global state governance institutions, the IMF, the WTO and
others. Democratically elected governments can feel their citizens’ pain
while proclaiming they are powerless given the constraints globaliza-
tion imposes. Consequently, while there may be formal democracy, a
passivity can be encouraged since there are no obvious targets which
can be effectively challenged since economic restructuring is presented
as inevitable. Thus, globalization and the restructuring which has
occurred as a response to financial crises ironically produces pressure
for greater democracy but a limited and, perhaps in many places, only
symbolic democracy.
Without the dictatorial regime the opposition is less united as to
goals and strategies. With globalization states of the global south have
gone from resisting transnational control to offering incentives to
attract foreign investors. Nationalism no longer is a glue in the same
way and more difficult issues of class become more central to domestic
politics. These are complex and difficult matters and I look forward to
their discussion as the central theme of the conference. Addressing the
abuse of power involves complex and crosscutting issues of class, inter-
est group politics and foreign manipulation. Even such seemingly
simple issues as the need for a rule of law need to be carefully decon-
structed (Jayasuriya 1996). The issue of crony capitalism is complicated
by the reasons it is opposed and the self-interests of those who rail
most vocally in the West against its purported abuses. The attack on
corruption as a wedge to weaken national capital and force liquidation
of its assets for sale at knock down prices to foreign investors is a pow-
erful incentive for some supporters of greater openness and democracy
in the region. At the same time corruption and ineptitude are real. For
example, the Hyundai drama in which Chung Ju-yung, the patriarch
founder of South Korea’s biggest conglomerate with its 52 trillion won
($46 billion), is debt feuding with his sons who are at each other’s
William K. Tabb 77
throats as well and the government’s indecision about shoring up or

liquidating various other troubled chaebol in need of restructuring
involve many elements, foreign and domestic, which need to be ana-
lytically unpacked.
Similar skirmishes go on throughout the region. In Malaysia
Mahathir Mohamad, the prime minister, resists efforts by Daim
Zainuddin, at this writing the finance minister, to reduce the influence
of heads of state-owned businesses. In Indonesia efforts to bring the
system closer to the norms required to attract and retain foreign
investors’ confidence are in even greater difficulty. With each effort at
greater transparency, corruption investigations uncover links to the
highest circles of government. Investigation of the former dictator
Suharto’s family and of B.J. Habibie, his handpicked successor and
crony, has begun. There are some details of the Golkar Party’s looting
of the now nationalized Bank Bali of tens of millions of dollars for
Habibie’s 1999 presidential campaign and we have some questions as
to his successor’s, President Abdurrahman Wahid ability to address the
deep structures of corruption. Reform has been painfully slow and
foreign investors remain skiddish.
The more important question for this conference is what are the
people’s requirements? What is the relation between controlled
reform from above to address the needs to charm foreign capital
who are tired of the exorbitant cost corruption imposes on the cost
of doing business, the failure to establish proper enforcement of
business contracts and on the other hand the creation of meaningful
participatory democracy in which the needs of the masses are an
important priority for the state? Similar issues arise when we con-
sider labour rights, environmental concerns and other quality of life
issues. These tend to be seen as foreign impositions, a veil for protec-
tionism demanded by the advanced economies. There are in many
venues the claim as well that Asian values express preference for
patriarchy, paternal control and authoritarianism and efforts to
impose democracy are foreign efforts which represent Western
imperialist design to weaken these economies. Lee Kuan Yew’s well
circulated view that Western-style social welfare is not only too
expensive but fosters laziness and dependency which undermines
family and societal values are widely shared in elite circles. Such
orientalist arguments are essentialist in that they identify certain
features of East Asian society and imbue them with a sense of time-
lessness and deny the social and economic antagonisms, which are
centrally part of these societies.
The emergence of ASEAN + 3, (the ten ASEAN countries plus China,

Japan and South Korea) which has held its own summits for the last
three years and in its membership matches the East Asian Economic
Group (proposed a decade ago by Mahathir Mohamad, the prime min-
ister of Malaysia, and then thought far too radical a departure and
totally unacceptable to the Americans), has the potential for excluding
the United States as a venue which might short circuit APEC, the Asia-
Pacific Economic Cooperation forum which the United States has dom-
inated. The Japanese proposed Asian Monetary Fund, a revival of a
proposal vetoed by the US a few years ago, is coming into being as a
vehicle to preserve the developmental state option and the ASEAN + 3
plan for a regional system of currency swaps will help them deal with
future financial crises, hopefully without being forced to follow
unwanted and potentially damaging IMF directives.
While we may applaud the efforts by East Asian governments to
avoid relations of dependency and recognize the potential of a region
whose aggregate economy and external trade is about as large as that of
the US and the EU (and which has larger monetary reserves) to become
an equal partner in shaping the global economy in this new century,
we are aware of the profoundly undemocratic nature of so many of the
governments involved, the extent of official repression and sectarian
violence, and the social cost of autocratic rule. Finally we are aware of
working conditions that in many countries are dehumanizing and
abusive to an extent that is hardly necessary for development to take
place. The key point to bear in mind is that neither existing regimes
which use state power to privilege the few and oppress the many nor
the neoliberal alternative which covers attempts at increased foreign
domination disguised as self-regulating markets and ‘transparency’,
the rule of law, and free competition, are motivated by concern for the
people of the region. Neither of the dominant positions, both the
neoliberal deregulation that produces unstable, speculative behaviour
and loss of control nor the reactionary impulse to such efforts which
strengthens the grip of local elites in resisting needed change, is desir-
able (Pieper & Taylor 1998). At the popular level not all movements are
progressive either. Resister communities of identity based on ethnicity,
religion or xenophobic nationalism are backward looking and typically
divisive, making alliances with other victims of globalization forces
more difficult if not impossible. The old middle ground of social
democracy has found it difficult to respond to globalization’s penetra-
tion of nation state territorial boundaries. Actually existing commun-
isms have self-destructed removing the space in which experiments in
William K. Tabb 79
Third World socialism could be attempted. The core question democratic

movements, and hardly only in Asia, face is how to develop an altern-
ative to a globalization governed exclusively by international finance
and transnational corporations and their mediating institutions.
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5
Nation Against Democracy: The
Rise of Cultural Nationalism in
Asia
Radhika Desai
Specificity of Asian nationalism
Discussions of democracy are usually bloodless, fleshless affairs.1 The

focus is on things like institutions, constitutions, electoral systems,
bills of rights, charters of freedoms and what-not; modular pre-
fabricated components of a structure which can be assembled and built
anywhere. One gets very little sense of the local social, political, eco-
nomic and cultural condition in which these democratic institutions
and practices must surely be embedded. Indeed, particularly in its post-
1989 version, the discourse of democracy has been supplemented with
its own, almost equally modular, discourse of the necessary social
ambience for democracy, its potting soil as it were: the discourse of
civil society. ‘A set of diverse non-governmental institutions which is
strong enough to counterbalance the state and prevent it from domi-
nating and atomising the rest of society’ (Gellner 1994: 5), civil
society’s own health determines, we are told, that of democracy and, in
post-1989 conditions, the malingering of democracy in the former
communist countries, or parts of newly democratic Africa or Asia, is
usually traced to a less than robust civil society.
As a conceptual term and a real social development ‘civil society’
forms the link between capitalism and (liberal) democracy. It is, more-
over, a deeply problematic link and the real contradictions of this rela-
tionship constitute the basis of its many conceptual confusions and
evasions.2 The health of capitalist liberal democracies everywhere is
dependent upon the resolution, temporarily at least, of these contra-
dictions. They arise from constitutive tension between the substantive
inequalities which capitalism generates and exacerbates, and the
81
82 Nation Against Democracy
formal equalities which liberal democracies grant. The associational life

of civil society mediates, and temporarily at least, resolves, these ten-
sions. But the health of democracies is also determined by the local,
living, concrete conditions of the societies concerned – the particular
configurations of economy, politics, society and culture, which we call
nations. Indeed, ‘civil society’ can be said, in many ways, to be
opposed to ‘nation’. Contrary to those who would celebrate the age of
modern democratic politics which the French Revolution inaugurated
as that of democracy and civil society, are those, like Tom Nairn, who
remind us that ‘The age which followed 1789… is surely correctly
labelled as “The Age Ascendant of Nationalism” – not as the Age of
Ascendant Civil Society’ (Nairn 1997: 83).
Like everywhere else in the world, nationalisms in Asia emerged in
tandem with Asia’s induction into the historical processes of capitalist
development. This meant that, with the exception of Japanese nation-
alism, they originated and formed themselves through resistance to the
chief feature of this modernity – formal colonialism or less institution-
alized forms of foreign domination. In this they are, of course, part of a
particular ‘wave’ of nationalism, one of the many that have erupted in
the complex history of the ‘combined and uneven development’ of
capitalism.3 To the celebrated universalism of civil society and demo-
cracy are opposed the deplorable particularism and authoritarian
potential of nationalism.
In this chapter I want to draw attention to the anti-democratic impli-
cations of the emergence of particularly strong authoritarian forms of
nationalism in Asia that I call ‘cultural nationalism’. While cultural
nationalisms are not unique to Asia, they are arguably stronger there.
This is less because of any priority of culture in Asia as it is due to the
specific place of Asia, particularly its relatively more dynamic East,
South East, and South, in the world economic order. Asia’s new author-
itarian cultural nationalism – Nihonjinron, Hindutva, Confucian
Values, Asian Values, to name but a few – are also remarkable for
the contrast they make to the strong developmental (and in Japan’s
case, even pacific) nationalisms which Asian nations featured in the
immediate post-Second World War period.
This chapter focuses on the emergence and dynamics of these new
cultural nationalisms in Asia and their implication for democracy and
civil society. We proceed first by noting the historical specificity of
Asian nationalisms.
Why an apparently universalizing force as capitalism has, in the
course of its spread across the globe, been accompanied by the creation
Radhika Desai 83
of concretely particular nation-states is something of a historical

conundrum (Balakrishnan 1996). But that there is a profound histor-
ical relationship between capitalism and the nation-state, in a way
there is not between other historical forms of modern society and the
nation-state, seems fairly clear. Communism was originally universal-
ist. Since the development of capitalism had already resulted in the cre-
ation of nation-states, it was internationalist. Marxists such as Otto
Bauer, who devoted thought and attention to the issue, sought to tran-
scend existing nations and nationalisms in a supra-national and social-
ist political construction. This was also how the original Communist
state, the USSR saw itself, and was seen, not as a nation-state, but as a
political form which ‘transcended the problem of nationalism by
formal recognition of the terrains and cultures of its major national-
ities while subordinating them fully to a universalist project’. It was
only with Stalin’s decision not to incorporate the Eastern Bloc countries
into the Soviet Union after 1945, followed, of course, by the various
Asian Communisms, which conceded the nation-state principle within
the Communist World. Fascism on the other hand, while it exploited
nationalism ‘locally’ was also a supra-nationalist force, pitted not
against ‘world-wide Jewry’ as Anderson would have it, but against
Communism which it dubbed ‘Judeo-Bolshevism’ (Mayer 1998).
The tension between the objective or economic universalism of capi-
talism and the subjective or cultural particularism of nations and
nationalisms parallels another tension which has been referred to in
many different ways. Tom Nairn’s dubbing of nationalism as ‘the
modern Janus’ (Nairn 1977) being only the most famous. It is the
tension within nationalism between the backward looking and
the forward looking, between its historically progressive role in shifting
the basis of legitimacy from dynastic succession to its modern popular
basis on the one hand, and the potential within it for atavistic regres-
sion on the other. It is the tension between the universalism of the role
of nationalism in creating, across the world, civil and democratic soci-
eties and the particularism of its basis in and commitment to particular
cultures.4 It is, in short the tension between the civic and the ethnic
sides of nationalism. While there is no logical necessity to this, histor-
ically it is the former which have been seen to be politically progressive
and the latter have usually been feared as the basis of political reaction
and authoritarianism in modern mass politics.
Attempts, largely Orientalist, have been made to suggest that ‘anti-
colonial nationalisms’, such as the Asian, tend to be ‘ethnic’ nation-
alisms and are opposed to the ‘civic’ nationalisms of the metropolitan,
European or North American, liberal capitalist democracies. Such

attempts run into several problems. On the one hand, there is the
increasing stabilization of liberal democracy in many Asian countries.
On the other, there is the resurgence of racism, and the increasing hol-
lowing out of liberal democracy by money and the media, in metropol-
itan countries, as also elsewhere, in tandem with the political need to
manage the increasing inequities of contemporary capitalism. Hans
Kohn’s distinction between the pristine nationalisms – the ones which
came before the others (principally the English, American and the
French) – which were ‘new… fundamentally liberal and universal’,
more emancipatory, less oppressive and all other nationalisms which
were not, is even more pernicious, not to mention false. For one thing,
all ‘nations’, in the sense of the modern capitalist form of ‘commu-
nity’, bear important relationships to the particular communities
which pre-existed them among the same populations, no matter how
much the modern nations cut across, and were cross-cut by, these
older communities, no matter how much these are actually and ideo-
logically constructed and reconstructed in the process of the formation
of the nation. As such we can expect the relative proportions of
novelty and antiquity to be a highly contingent matter. For another,
since communities are always defined against others, except in radi-
cally isolated communities, the sort of innocent universalism Kohn
evokes is impossible. All the three candidates for priority in the history
of nationalisms, England (1688), the United States (1776) and France
(1789) were fundamentally defined against various others at the very
moment of their formation: France and England had their colonies and
US nationalism was based on a white identity as against both black and
Native. If the spirit of the age (or in the case of England, religion) gave
the content of their nationalism a universalist cast, it actually became
the basis of imperialism in the form of White Man’s Burdens, Civilising
Missions and Manifest Destinies. Finally, as Tom Nairn has pointed out
in the case of English and British nationalism, these early nationalisms
also acquired the same ethnic and cultural characteristics as other
nationalisms in the course of the subsequent history of the spread of
the nation-state form to other regions and populations, through wars
and popular struggles. Through these the identities which these
nationalisms embodied tended to become more defined and more
prominent in their discourses and practices (Kohn 1940).
Such attempts to distinguish Asian nationalisms on the basis of the
higher prominence of ‘primordial’ elements, such as ethnicity, reli-
gion, or race, usually turn out to be exercises in what Samir Amin calls
Radhika Desai 85
Eurocentrism, a ‘culturalist phenomenon’ which posits ‘irreducibly

distinct cultural invariants’ on whose basis it denies the possibility of
genuinely ‘general laws of human evolution’ except to claim, falsely,
that ‘imitation of the Western model by all peoples is the only solution
to the challenges of our time’ (Amin 1989: vii). In this manner, non-
Western ‘cultures’ are assumed to be ethnic, religious or racial, and are
negatively subordinated to Western ‘societies’ which are assumed to be
liberal, tolerant and ‘civic’. In fact, Asian nation-states with exceptions
like Vietnam, are rarely ethnically homogenous. Asian nationalism
remains state-centric and the management of minorities, ranging from
state repression to varying degrees of incorporation, within such states
differs as much among Asian states themselves as it does between any
of them and states in other parts of the world.
Asian nationalisms, again excepting Japan, do differ from those of
the metropolitan countries in the centrality of their resistance to im-
perialism. They may also be said to differ in degree and specificity from
nationalisms in other imperialized parts of the world because of the
wide reach of Communism in Asia in the twentieth century, the cen-
trality of Asia among the theatres of the Cold War and, finally, the
greater relevance of the non-aligned movement.
For these reasons understanding Asian nationalisms involves dealing
with the long-standing opposition between nation and class. This
opposition is further compounded by the fact that, in the words of one
scholar, the failure to understand nationalism was Marxism’s ‘great
historical failure’ (Nimni 1985) and by the actual historical experiences
in which nationalism has been pitted against socialist politics, whose
most horrific culmination hitherto has been Nazism.5 Most contempor-
ary Asian states have been marked not only by nationalism but also,
very deeply, by Communism. Asia also contains some of the most
important instances of states where nationalism and Communism have
been combined, China and Vietnam in particular. These original com-
binations, progressive and effective as they were, contributed to the
unique horrors of Khmer Cambodia. The interaction of Communism
and nationalism has also shaped Asia’s destiny in the twentieth century
in other countries in a quite different way. Whether in Indonesia or
India, Thailand or the Philippines, the containment of Communism
was a (capitalist) national project with all that this also meant in
terms of Superpower interventions, non-aligned balancing acts and
internal accommodations between the needs of accumulation and legit-
imation (Anderson 1994 and Ahmad 1994). A settling of accounts, both
conceptual and historical, of this interaction between nationalism
and Communism, nation and class – close, conflictual, creative, and

destructive as it has been – is then crucial.
Beginning with Lenin, an accommodation between the Left’s inter-
nationalist ideas and actually-existing nationalisms has been based on
the anti-imperialist potential of the nationalism in question. The inter-
national class struggle, it was argued, would be advanced by supporting
national struggles in less developed parts of the world because they too
were anti-imperialist. Popular, or Communist national struggles were,
of course, quite unproblematically anti-imperialist, but others too, led
by a ‘national bourgeoisie’ whose interests were understood to be
opposed to those of metropolitan capital and could therefore be
expected to be anti-imperialist, were to be supported. In addition to
seeking economic autonomy from metropolitan capital internation-
ally, these nationalisms were also expected to be conducive to greater
equality, civic and economic, and productivity domestically than could
be expected in the shadow of imperialism.
Although it originated in Lenin’s reflections during the Great War,
this image of nationalism’s progressive potential really came into its
own only in the second half of the twentieth century. Political inde-
pendence, and the finalization of the nation-states-system in Asia was
the result of Communist and national anti-colonial struggles. These
raised hopes for a continuation of the struggle for national self-
determination through ‘development’, for translating political inde-
pendence into genuine economic independence from the former
colonial powers to which they still remained economically subordi-
nated. However, by the end of the century the picture looked very
different. Communism had fallen in Europe and was being systemati-
cally denatured in Asia, making capitalism more truly global, and
imperialist, than it had ever been. Perhaps this is the true meaning of
‘globalisation’. It certainly seemed to put any project of national eco-
nomic self-determination radically into question as one after another
the economies of Asia, like those of the rest of the third world, were
subject to the economic, financial and political tutelage of metropol-
itan capital, its states and international agencies.
The effects of this on nations and nationalism in Asia as elsewhere have
been hard to discern. For progressive nationalism, as conceived hitherto
as anti-imperialist internationally and civic and egalitarian domestically,
has not only been extinguished, it has not only been replaced by nations
aligned with imperialism and the domestic exacerbation of inequality at
home. There is more, we are told: globalizing capitalism also seems to be
undermining nation-states and nationalisms in new ways.
Radhika Desai 87
Nationalism is dead! Long live (cultural) nationalism!
A decade ago Eric Hobsbawm had ended his study, Nations and
Nationalism since 1780 thus:
‘As I have suggested, “nation” and “nationalism” are no longer ade-

quate terms to describe, let alone analyse, the political entities
described as such, or even the sentiments once described by these
words. It is not impossible that nationalism will decline with the
decline of the nation-state, without which being English, Irish or
Jewish, or a combination of all these, is the only one way in which
people describe their identity among the many others which they
use for this purpose, as occasion demands. It would be absurd to
claim that this day is already near. However, I hope it can at least be
envisaged. After all, the very fact that historians are at least begin-
ning to make some progress in the study and analysis of nations
and nationalism suggests, as so often, that the phenomenon is past
its peak. The owl of Minerva which brings wisdom, said Hegel, flies
out at dusk. It is a good sign that it is now circling around nations
and nationalism’ (Hobsbawm, 1990: 182–83).
Hobsbawm, with his agnostic and sceptical attitude towards nations

and nationalism, stressing their constructed nature and oppressive pos-
sibilities, and equally often their sheer silliness, can be expected to be
sanguine about the passing of the ‘apogee of nationalism’ (1918–1950).
It may be for him a thing to be buried and not praised. And he insisted
on this line of analysis even when he was compelled by the collapse of
Communism and the break-up of the Soviet Union, only a couple of
years after he had buried nations and nationalism, to address the
question, ‘why… the general European mutation of ethnic into nation-
alistic politics’? He concluded, that the rise of new nations in the
former Eastern Bloc and more generally of nationalist separatism were
simply ‘The chickens of World War I coming home to roost’, a settling
of past accounts, frozen by the rise of Communism and unfrozen by its
fall.
There is something to this. The late twentieth century certainly rep-
resents another ‘wave’ of nationalisms in which many nationalities
managed to acquire the status of nation-states, in the former Soviet
Union particularly, but also including some which had struggled for
nationhood for decades, such as Palestine. But this newest wave is dif-
ferent from those that preceded it. For one thing, the national cultures
and identities of the new nations, in all cases, whether of an

Uzbekistan or a Palestine, were forged much earlier. Here the nations
that arose from the break up of the USSR may at first sight be regarded
as different. The general view of the matter is that the USSR had had a
denationalizing and oppressive effect on the nationalities, which con-
stituted it. However, Ronald Suny (1990 and 1991), in particular,
pointed to the fallaciousness of this view. He argued that, on the con-
trary, it preserved and maintained within its constituent republics the
various national cultures which successfully or unsuccessfully laid
claim to their own states after the collapse of the USSR. To this one
might add that the fact that the USSR disintegrated into its various
national components is one of the more remarkable features of that
otherwise messy process.
What Hobsbawm, along with many others, is arguing is that stable
national cultures and identities would have found it much more
difficult to constitute themselves in the late twentieth century. Today,
although a few old nations have finally and lately achieved statehood,
nations in general are undercut and crosscut by the politicization and
commodification of cultures and identities: national as well as non-
national, non-territorial ones. The result is a complex picture. While
there has been an increase in the number of national cultures and
identities which have been accorded at least some recognition, the dif-
ference between national and non-national identities like gender or
race is being flattened out. In this situation, on the one hand, new cul-
tures and identities are increasingly not territorial and are dissociated
from nationalism as such. They increasingly bypass and even under-
mine, rather than provide the foundation for, nations. On the other
hand, politicization and commodification put even longer established
national cultures and identities into a new kind of flux.
Nor are other, socio-economic conditions conducive to the stabiliza-
tion of the new nations. Benedict Anderson reflects that the latest wave
of nationalisms has created ‘a congeries of weak, economically fragile
nation-states out of the debris of the Soviet system, some entirely new,
others residues of the settlement of 1918; in either case, from many
points of view a quarter of a century too late’. Not only are these
nationalisms ‘unlikely to disturb global trends’, ‘Portable nationality,
read under the sign of “identity” is on the rapid rise as people every-
where are on the move’ (Anderson 1996: 8). Many older and better-
established nation-states under the pressures of globalization and
neo-liberalism can also be expected to have their problems: ‘States
incapable of militarily defending their citizens, and hard put to ensure
Radhika Desai 89
them employment and ever-better life chances, may busy themselves

with policing women’s bodies and schoolchildren’s curricula, but [he
asks] is this kind of thing enough over the long term to sustain the
grand demands of sovereignty’ (Anderson 1996: 9)?
There is much to this sort of burial of nationalism. However, it tends
to be tied to the thesis of the ‘decline of the nation-state’, a thesis
which enjoyed particular plausibility in the age of globalization. That
globalization was undermining nation-states is a dictum which is prac-
tically commonsense in our time. However, both globalization as a
process, and its connection with the nation-state were not so simple. It
was simply not true that globalization undermined the nation-state,
making it irrelevant. On the contrary, the nation-state remains central
to the processes of globalization itself, participating in the construction
of its complex international political architecture, as Leo Panitch (1998
and 2000), for one, forcefully argued on a number of occasions. And
now, in the aftermath of the series of financial crises and the stock-
market bust which spelled the end of financial globalization, globaliza-
tion’s most dominant element, not to mention the terrorist attacks on
the World Trade Center and the Pentagon, globalization is not so often
spoken of and may have yielded to a new age of strong states and
Wars. Indeed, it may be an age which is so premised upon strong
states, nations and nationalisms that a few of the weaker areas face the
prospect of being wound up, a major reversal of the historical trend
which by the close of the twentieth century had created almost 200
nation-states.
Rather than any simple ‘decline of the nation-states’ or even nation-
alism, what we are witnessing is something more complex and novel.
On the one hand, globalization was merely the symptom of a massive
shift in the balance of class forces in favour of capital, in country after
country, across the world. These shifts translated into a very different
set of state policies, policies which work in favour of capital and to
increase its options, domestically and internationally, and presented
an increasingly miserly and punitive face to working people, as well as
the vast numbers of unemployed, or insufficiently employed supernu-
meraries which this sort of capitalism creates. In these circumstances,
the relevance of nationalism as an ideology of legitimation of an iniqui-
tous social order should be obvious, though its resonance may be
reduced by the same social circumstances.
These complex shifts have so far escaped scrutiny while another devel-
opment seems to command almost rapt attention when nationalism is
discussed. As the century closed there were few regions of the world that
were not imbricated in the web of imperialist capitalism. But in those that
were only weakly embedded in it, or as Giovanni Arrighi puts it, those
‘communities, countries, or even continents’ which have been, or feared
being, issued the ‘unbearable verdict’ of contemporary world capitalism
of being ‘redundant, superfluous to a changing economy of capital accu-
mulation on a world scale’ – many of the ‘weak’ states which have come
into being after the Fall of Communism in Central Asia particularly come
to mind – extreme forms of ethnic or religious nationalism have emerged.
But Arrighi would not see these as nationalism at all.
Combined with the collapse of the world power and territorial

empire of the USSR, the unplugging of the ‘redundant’ communities
and locales from the world supply system has triggered innumer-
able, mostly violent feuds over ‘who is more superfluous than
whom’, or, more simply, over the appropriation of resources that
were made absolutely scarce by the unplugging. Generally speaking,
these feuds have been diagnosed and treated not as expressions of
the self-protection of society against the disruption of established
ways of life under the impact of intensifying world market competi-
tion – which for the most part is what they are. Rather, they have
been diagnosed and treated as the expression of atavistic hatreds or
of power struggles among local ‘bullies’, both of which have played
at best only a secondary role (Arrighi 1994: 330–1).
Whether or not we choose to see these developments as furors of nation-

alism, these ‘nationalist’ formations and ideologies are little more than
barely credible legitimations for marauding armed gangs which disguise
themselves as states, whether we are talking about (pre and post 2001)
Afghanistan or Uzbekistan. What needs far more attention, and is getting
little, is what is happening to nationalism in those parts of Asia that
remain central to the ‘changing economy of capital accumulation on a
world scale’. These nationalisms, until recently developmental and
pacific, are rapidly taking the form of cultural nationalism.
The shift from nationalism as hitherto understood to cultural nation-
alism can be seen in the contrasting impulses and dynamics of cultural
nationalisms within the international states system and in its domestic
politics of accumulation and legitimation. Today, nation-states, and
nationalisms are not anti-imperialist. Rather they concern themselves
with finding, keeping and, at best, slightly bettering (naturally at the
expense of other such states) their position, within the classes they rep-
resent, economically, militarily and ideologically, in the imperialist
Radhika Desai 91
hierarchy. Even in Iran, the most recent of the anti-imperialist revolu-

tions, the recent period of stabilization has been marked by increasing
accommodation with the West, not to mention the tragedy of present-
day Vietnam under Doi-moi. That they are not anti-imperialist is seen,
perhaps most clearly, in the rise of similar kinds of cultural nation-
alisms, complete with ‘extremist’ (excluding and othering minorities)
and ‘moderate’ (including and repressively tolerating them) wings, in
the countries of the metropole, whether we are speaking of Great
Britain, Germany, Japan or the United States. Most Asian nation-states
are today well integrated in the imperialist capitalist system, and
among them too we are witnessing a shift to cultural nationalisms
such as Hindutva, Asian Values and Confucianism.
Domestically, instead of being based on egalitarian citizenship, cul-
tural nationalisms are based on ideologies of national cultures in which
different groups and ethnic and cultural identities have differential cul-
tural precedence. This precedence tends to be generally correlated with
their higher or lower positions in the economy and labour market, and
to their differential access to state largesse. They are produced and
reproduced within the hierarchies implied by the ‘national culture’
and the corresponding state practices they necessarily create.
The contrast between the progressive hopes once pinned on nation-
alism and the politically reactionary character of its cultural nationalist
successor can be starkly put. On the one hand, there was the national-
ism, which posed to itself questions about the historically progressive
political tasks to be accomplished within each nation, along with its
international links and implications. This was a nationalism which
answered the Leninist question ‘What is to be done?’ in the case of
each nation. On the other hand, there are nationalisms, which seek to
both consolidate national culture and identity and take their place
internationally, in order to reinforce an accepted domestic and inter-
national capitalist order. This was a nationalism, which posed itself
Hitler’s question: ‘Sein oder Nichtsein?’ While this is a stark contrast,
what is interesting is the relative smoothness of the transition from the
one to the other, characterized less by discontinuities than by continu-
ities. This can only mean that the differences between the concept of
nationalism in its progressive sense with its Leninist origins, and cul-
tural nationalism, are greater than the differences between the phenom-
enons they denote. The Indian case is particularly instructive in this
regard. A cultural nationalist proto-fascist party could come to power
and settle down to rule, it appears, for a long time, with neither a break
in the continuity of liberal democratic institutions nor any trend
change in the pattern of capitalist development and related evolution

of class relations in the country.
After a brief account of the political economy of the transition from
developmental to cultural nationalism, I hope to show in general terms
where the continuities between the two lie. I hope, in the light of these
arguments, to explore the dynamics, as far as they can be theoretically
specified, of cultural nationalism further. To anticipate the framework,
it may be said that the process of transition from the one to the other
is part of a much longer-term historical process of the excoriation of
community by civil society, of gemeinschaft by gesellschaft and the
battles of the former against the latter. The nation, at its best, and by
its most sympathetic analysts, was regarded as the most effective repos-
itory of community in modern conditions – combining the values of
civil society and community within itself. However, it appears that the
nation under globalization seems to be losing the historical battle
against the abstraction of civil society. This has implications for the
dynamics of cultural nationalism. On the one hand, the increasing
penetration of the market in cultural production and consumption
gives culture itself very shallow roots and imparts to it a volatility,
which is transmitted to cultural nationalisms. The flux to which they
are thus subject requires them to perform ideological balancing acts
almost continuously. On the other hand, it implies that the opposition
to this form of nationalism, and the world capitalist order it supports,
can only come from a universalism which is nevertheless based on dis-
tinct forms and structures of non-commodified life, ‘national’ or other-
wise, many of which will have to be re-built or built entirely anew.
Development and the political economy of developmental

nationalism
The idea of the nation-state as potentially anti-imperialist in the impe-

rialized parts of the world may have originated in Lenin, but it
acquired the currency of common sense in progressive circles only in
the post-Second World war period. In a more nebulous form, the idea
became central to the progressive conception of the role of the post-
colonial nation-state. Most new states then, and most Asian states,
were products of more or less popular anti-colonial struggles, and it
was assumed that these states would pursue national development
(which was capitalist, although since this usually went without saying,
this contributed to its nebulousness which was ideologically very
important in those now lost and lamented times) which was both pro-
Radhika Desai 93
ductive and egalitarian domestically, in the social democratic temper

of the times, and autonomous abroad, though the nature of this auto-
nomy was never specified. The post-war order, under US direction, had,
after all, created a panoply of institutions at Bretton Woods which
placed a number of apparently powerful economic decisions, par-
ticularly control over flows of capital, in the hands of national gov-
ernments. They seemed designed to permit these governments to
manage their economies to promote growth and employment largely
independent of external considerations.
Far more than in any other part of the ex-colonial world, the poten-
tial for autonomous, ‘national’ capitalist development was realized in
Asia, most spectacularly in South Korea and Taiwan, but also, if to a
lesser extent, in India and South East Asia. The rise of the Asian
‘miracle’ economies, South Korea, Taiwan, Singapore and Hong Kong,
and the general acknowledgement of substantial industrialization in
the third world, if in pockets, constituted an apogee of such ‘national-
ist’ development. Not since the rise of Japan in the early twentieth
century had non-European nations industrialized to the degree and
with the speed which was now being witnessed, and not only in the
East Asian countries. Moreover, these experiences, particularly those of
South Korea and Taiwan, which were very closely examined, were not
examples of industrialization through blanket integration in the world
market. They had involved heavy state intervention and direction, and
were ‘developmental states’. These experiences were regarded as rein-
forcement of the notion of autonomous national capitalist develop-
ment, particularly in the concept of the ‘developmentalist state’
and, until the East Asian financial crisis, this notion still retained a
wide currency.
That crises was, however, only the culminating moment in a long
death of development, national development (for it had been nothing
if not that), brought on by the progressive liberalization of controls
over Capital and its movements by nation-states which had been the
basis of the Bretton Woods arrangements. This liberation of capital was
executed by a more or less worldwide neo-liberal counterrevolution in
economic policy, which, ironically, penetrated the Bretton Woods
institutions most deeply.
The era of national economies and national economic strategies is

past – for the time being at least. With capital free to move where it
wishes, no state (and least of all a small poor one) can pursue any
economic policy that the owners of capital seriously dislike.
Economic planning, welfare systems and fiscal and monetary

systems all become subject to control, in effect, by capital markets,
signaled, in the case of third world countries, by the conditions
attached to IMF/World Bank lending – precisely the situation the
Bretton Woods system was designed to prevent (Leys 1996: 23–4).
The crisis, however, exposed the economic vulnerability of some of the

strongest developmentalist states to metropolitan capital, particularly
international financial capital. But it did more: it exposed, particularly
in the measures taken to ‘resolve’ it by imperialist governments, par-
ticularly the US, and their agencies, their political vulnerability to im-
perialist design. For the IMF and the US government clearly aimed not
only at restructuring the political economy of developmentalism rad-
ically in a neo-liberal direction, but also at ensuring that vast agglomer-
ations of Korean capital, as well as that of other countries, became
available for US capital to acquire at crisis-deflated prices. The ideolo-
gical attack on their ‘crony capitalism’ indicated clearly, furthermore,
that what was once fostered and tolerated for Cold War purposes – the
‘developmentalism’ of these states – was now not only dispensable but
constituted obstacles to the interests and intentions of metropolitan
capital which could and would be removed.
Critical scholars read this crisis in two slightly, but importantly, dif-
ferent ways. One way, exemplified by Prabhat Patnaik, was to see in it
the end of the hopes for national capitalist development: in his view
the crisis exposed the dynamics of a new phase of capitalism, charac-
terized by stagnation in the metropolitan countries, increasing inequal-
ity and asset transfer from across the world into the hands of
metropolitan financial capital and, of course, increasing poverty in the
third world. Crucially, ‘This new phase also entails the end of bour-
geois economic nationalism as a practical project in the third world,
i.e. of the attempt of the third world bourgeoisie to carve out a space
for itself and build a capitalism that is relatively autonomous of imperi-
alism’ (Patnaik 1999: 67). Mitchell Bernard, however, reminded us in
his assessment of the same events of the hollowness of the ideal of
autonomous national capitalist development, however state sponsored.
He warned us against thinking of ‘State-centred dependent capitalism
as a desirable alternative to the reimposition of neo-liberalism’, as some
middle classes and capitalists adversely affected by the recent events,
trade unions, certain sorts of development theorists and votaries of
‘developmentalist states’ were already doing in the affected Asian
economies (Bernard 1999: 203).
Radhika Desai 95
While Patniak appears to believe that there is something qualita-

tively new in the present phase of capitalism as he identifies it, which
puts an end to the possibility of what he calls a national capitalism ‘rel-
atively autonomous of imperialism’, Bernard sees South Korea and
other developmentalist states as having been dependent rather than
even ‘relatively autonomous’ all along. That is to say, both are agreed
that such development is now impossible.
With the passing of the project of autonomous national develop-
ment, its domesticated international condition, and associated notions
of a ‘national bourgeoisie’, we can say that the dome of cultural
nationalism has struck. Unlike developmental nationalism, it is neither
anti-imperialist, nor productivist, nor yet egalitarian. On the contrary,
even so, the notion of autonomous national capitalist development
continues to haunt the discourse about nations and nationalism in the
post-Communist world of globalization in a way, which obscures the
reality of a settled and accepted imperialism. In the smoke and mirrors
world of mainstream political and intellectual discourse today, many
apparently different views about contemporary nationalism, cultural
nationalism, are articulated. Boosters of globalization view it either as
an understandably atavistic and uncomprehending, or purely bloody-
minded, response against globalization. Proponents of cultural nation-
alism, for their part, are engaged in a discourse about protecting and
promoting the national ‘way of life’ though whether this is to be
accomplished within a globalizing world, or against it, is not always
clear. The dialogue between the two has given rise to the impression
that the two things are opposed to each other, even though, despite
the rise of cultural nationalism, the penetration and hold of metropol-
itan capital over economic activity the world over increases ceaselessly.
The focus on cultural issues may be designed to deflect attention from
economic depredations, though the success of this tactic cannot be
assumed, given the enormity of the latter. Certainly cultural national-
ism has rarely if ever been associated with genuine economic conces-
sions even for the ‘national’ bourgeoisies, let alone for the nation’s
more ordinary citizens.
While apparently opposed, the actual dialogue between globalizers
and cultural nationalists produces some important ideological effects
and herein lies its utility to both of them. The discourse provides some
legitimation, however threadbare among the victims of the globalizing
activities to globalizing governments, as protectors of national ‘ways of
life’. Among those who benefit from globalization, it articulates the
process of globalization as an international assertion of the interests of
the ‘nation’, by which they usually seem to mean their own, no longer
merely ‘national’ interests. From the imperial point of view, it may be
noted that another effect of this is that by naturalizing as well as con-
demning nationalism it medicalizes discourses about the treatment of
some of its more extreme manifestations which tend to occur in
regions weakly integrated into the global capitalist system: sometimes
drastic surgical action may be necessary to root them out when they
threaten the stability of the imperial order and the integration of the
nation in question into it, as in Kosovo, or today in Iraq.
Developmental nationalism and cultural nationalism
All nationalisms have a cultural content. Indeed, most accounts of

nationalism, and certainly the popular understandings, tend to reduce
it to this largely backward-looking cultural component; nationalisms
are generally considered to be matters of national ‘culture’, ‘identity’,
‘heritage’, and so on. This reduction of nationalism to the status of a
cultural legacy usually goes along with an essentialist view that this
culture or identity constitutes an inexplicable, almost mystical, eternal,
and original attribute of that nation. Of course, many nationalists
themselves tend to favour this view; a sort of primordialism. Moreover,
as most textbook accounts of nationalism aver, nationalism is a cross-
class and often broad-based popular affair. This is usually taken to
mean that the ‘national’ culture, identity, or heritage is shared, and
participated in, by all the nationals of a nation, more or less equally.
Nothing could be farther from the truth. Nationalism’s cultural
content, however narrowly or widely based, is usually structured so as
to reflect the balance of class forces in that nation and nationalism.
The positions, higher or lower, of the various popular and elite compo-
nents of the ‘national culture’, its overall balance between hierarchy
and equality, or the differential positions of various minorities, at any
historical moment, reflect the configuration of classes and groups in
the real social order of property, privilege and precedence which the
development of capitalism had created in that society. Nowhere does
the development of capitalist relations of production, in and of itself,
produce a state with juridically equal citizens, or a labour market with
equally free wage labourers, as the histories of both the advanced and
less developed parts of the world attest. Rather, every society and every
market produces a hierarchy of groups, among the propertied and non-
propertied alike, and one of the chief functions of the cultural com-
ponent of nationalism is to reflect and reinforce, culturally, this
Radhika Desai 97
hierarchy. Nor do nationalisms or national cultures automatically

result in equal participation of various groups in it. Some groups may
be forever excluded. Nationalism, therefore, can neither be made nor
understood outside the framework of the class relations of the nation.
We must always ask: ‘Whose nation is it?’ This question, which refers
to the internal hierarchical structuring of nationalisms’ cultural com-
ponents, is perhaps the most important and neglected question in
understanding the dynamics of nationalism. It has been neglected by
progressive scholars particularly, and remained unasked so long as the
hope of any autonomous and anti-imperialist capitalist development
could be sustained. Until then, attention tended to be monopolized by
‘economic’ questions of greater priority.
If all nationalisms, developmental and cultural, have a cultural
content, then the key to understanding but not exaggerating the con-
trast between a civic and developmental nationalism and contempor-
ary cultural nationalism in capitalist societies, is to appreciate that the
transition between the two has not been accompanied by any major
social transformation. The culture of the dominant classes has always
been at the cultural core of nationalism, of the ‘national culture’. The
cultures of other classes and groups have been hierarchically ordered in
relation to this core culture. Popular ideologies and energies which
went into the creation of each nationalism, and strengthened it during
anti-colonial struggles and the initial stabilization of the new nations,
had added a broadly civic and egalitarian element, which could, and
often did, also contest the dominant culture. They often made the
nationalism concerned more culturally egalitarian and forward-looking
in a way, which corresponded to its materially egalitarian develop-
mentalist project. As developmental nationalism gave way to cultural
nationalisms, the popular cultural elements tended to be appropriated,
contained, or, in the most radical cases, excluded or destroyed, by the
dominant elements. Shorn also of its forward-looking developmentalist
project, what reasserted itself was the largely backward-looking hierar-
chical ordering of the national culture, which as cultural nationalism,
now fully elaborated its inherent hierarchical and repressive potential.
The most important and interesting critical theories of nationalism
also place its cultural dimension, which so often seems to verge on the
mystical, within a narrative of capitalist modernity. The transition to
capitalism involves, from this point of view, a basic restructuring of the
size and shape of communities. The pre-capitalist-world was consti-
tuted by smaller-scale communities characterized, on the one hand, by
an extreme localism, and on the other, by a superficial, often imperial,
cosmopolitanism. That the modern industrial capitalist world is, by

contrast, divided into the larger-scale communities we call nation-
states is more than coincidental. Ernest Gellner originally theorized the
historical emergence of nationalism as the cultural accompaniment of
the rise of what he called ‘industrial society’, which, he argued, was
characterized by a highly advanced division of labour with, moreover,
an unstable occupational structure; one in which individuals not only
occupied places different from their parents but often changed occupa-
tions within their lifetimes. This mobility and interchangeability
required, as Gellner’s functionalist argument went, a broadly based and
shared cultural idiom based on literacy, a national culture, with all that
this meant in terms of the state sponsorship of education and so on
(Gellner 1983). Gellner himself proved unable to prevent his designa-
tion of ‘industrial society’ from seeping out to mean more broadly the
development of capitalism itself. Others, such as Michael Mann, have
stressed the importance of the rise of absolutist states and the social
mobilizations which resulted from its destruction of localism (Mann
1991) as a central factor in the rise of nations and nationalism. And,
like Gellner’s industrial society, Mann’s Absolutist States are also
central elements in the historical development of capitalism and its
modernity.
While bulk of this literature refers to the rise of nationalism in
Europe, the associated idea that nationalisms elsewhere were essen-
tially ‘diffused’ cultural forms, and Partha Chatterjee’s (1986) quite
unnecessary anguish over whether this meant that nationalism in
India, for example, was ‘derivative’, are quite beside the point. In the
first place, they ignore the fact, stressed particularly by Benedict
Anderson’s widely-cited (but not, evidently, closely read or under-
stood) book, Imagined Communities, that nationalisms had originated
in the New World. Such ‘Eurocentric provincialism’ is clearly shared
by non-European scholars with a proclaimed interest in challenging
Eurocentrism (Anderson 1999: xiii). Concerns about the derivative of
original character of this or that nationalism are clearly revealed to
be the false problems they are if we focus attention on the material
basis of nationalism, of its forms and contents, in actual historical
developments as capitalism spread across the globe. Like nation-
states, nationalisms also, in their cultural as well as in their eco-
nomic content, share many structural similarities, even if the
content must necessarily vary locally. Nationalisms are neither origi-
nal nor derivative, only structured by local material and historical
conditions.
Radhika Desai 99
The cultural content of nationalism emerges out of specific tensions

within, and plays a definite role in, the historical process of combined
and uneven development of capitalism. Tom Nairn offers one of the
better general accounts of this process. In his refinements of the essen-
tially Gellnerian view of the relationship between industrialization and
the rise of nationalism, Nairn locates the chief tension which produces
nationalism in the conflict which takes place as capitalism develops – a
conflict between community and culture, or Gesellshaft, on the one hand,
and the impersonal, atomising, commodified, cash-based structures of
‘civil society’ (here meaning, as it does classically, market society based on
formal-legal structures and practices) or Gemeinshaft which have histor-
ically undermined community, on the other. In Nairn’s conception,
national societies are the resolution of the tension between the two –
essentially between the inevitability of Gesellschaft and the human need,
indeed, itself an inevitability of sorts, for Gemeinschaft. Nations are simply
the modern capitalist form of community.
Thinking along with Wallerstein and his World Systems analysis,
Etienne Balibar offers a conception of nations which is similar, in
being based on the destructive effects of civil society on communities.
His account does not confine itself to the history of capitalist moder-
nity alone but reaches back much further into the history of the spread
of market relations. I would modify Balibar’s formulation slightly,
largely with a view to making it more consistent, as shown in square
brackets in the long quote below:
‘The history of social formations would not be so much a history of

non-commodity communities making the transition to market
society or a society of generalised exchange (including the exchange
of human labour-power) – the liberal or sociological representation
which has been preserved in Marxism – as a history of the reactions
of the [succession of] complex[es] of “non-economic” [better to say
non-market] social relations which are the binding agent of a histor-
ical collectivity of individuals, to the de-structuring with which the
expansion of the value form threatens them’ (Balibar 1994: 8).
Balibar enables us to envisage, in a fashion reminiscent of Karl Polanyi,

a long historical process in which various forms of community, of
which the nation is only the latest, have always had to be constructed
and reconstructed against the challenge which money and commodi-
ties have immemorially represented. One may add here, also after
Polanyi, that surely, given the secular spread and deepening of market
relations throughout history, these ‘reactions’ have also been accom-

modations to the market, up to and including recent globalization.
Unlike Nairn, however, Balibar takes the idea of the cultural and
ideological constructedness of nations, as well as earlier forms of com-
munity,6 much more seriously. This constructedness is both backward
and forward-looking, a tradition and a project. For while nationalisms
have often been seen as a break with the past, dissolving older forms of
hierarchy into new conceptions of national citizenship, they also, in
class societies, constitute the mechanisms through which these older
forms of cultural hierarchy, which once legitimized the structures of
surplus extraction and privilege in pre-capitalist societies, are brought,
in suitably modernized formats, into the capitalist national society. To
the extent that the hierarchy of various classes and groups in the pre-
capitalist societies is transported, unchanged, to the modern capitalist
society, nationalism’s own hierarchical orderings will correspond to
those of the past. These refashioned hierarchies of culture operate to
ease and intensify surplus extraction by a capitalist ruling class which
retains important continuities with pre-capitalist ruling classes but now
operates in a ‘civil society’ formally based on juridical equality. In the
transition from pre-capitalist to capitalist societies, these hierarchies
once based on formal, often legally enforced restrictions, prohibition
and privileges, are transformed into modern ‘ideologies’ about the
values of that national culture. Thus, slavery in the United States, for
example, or untouchability in India, is transformed into a cultural
denigration of black people and former untouchables.
Subscription to these ideologies and their scales of value may be
entirely ‘voluntary’ but their effect in ‘enforcing’ certain forms of
privilege and subordination cannot be underestimated.
If there is one characteristic which distinguishes the nation from all
previously known forms of community, it is this: although all histor-
ically known forms of community look backwards, the dynamism of
capitalism (and of its negation, socialism) has imparted a stronger
forward looking character to nations than to previously known forms
of community. Ernest Rennan had commented that ‘Forgetting
history, or even getting history wrong’ is essential to nations and
nationalism and Hobsbawm recently commented that what nations
want is a ‘retrospective mythology’ (Hobsbawm 1996: 255). Here the
relationship between nations and historians recalls that between
(would-be) kings and (some of the more nationalist) Brahmans in
medieval India: Brahmans ‘controlled the knowledge of genealogies
and could manufacture them for a correct price’ (Lele 1995: 59–60).
Radhika Desai 101
Nation-states are supposed to be based in (popular) legitimacy and

kingdoms on (dynastic) legitimacy (Blumenburg 1983). The rise of the
nation-state is supposed to represent a shift from one basis of legiti-
macy to another. Clearly, however, nations, in particular capitalist
ruling classes which are usually drawn from among the pre-capitalist
ruling classes, also appear to require a certain legitimacy of historical
lineage, for much the same purposes.
This constructedness does not simply reflect, passively, the historical
processes of the co-evolution of nations and capitalism. They con-
tained an indispensable element of collective human will and imagina-
tion. Miroslav Hroch captures well this reflexive relationship between
historical processes and the nationalisms they produce, both the
national identities and the national projects which are embedded in
them:
The basic condition for the success of any agitation (not only
national agitation) is that its argument at least roughly corresponds
to reality as perceived by those to whom it is directed. National agi-
tation therefore had to (and normally did) begin with the fact that,
quite independently of the will of the ‘patriots’, certain relations
and ties had developed over the centuries which united those
people towards whom the agitation was directed. They formed a
community united by inward ties, and they were at least vaguely
aware of this. There was of course a further psychological condition
that was not entirely evident: this was the ability of the targets of
national agitation to conceive of the existence of ‘their’ group
outside the framework of their everyday experience. This concep-
tion in turn depended on the degree of education and the personal
experiences of individuals. These were not circumstances which the
agitators could themselves create or influence; they were the results
of the process of modernisation (Hroch 1998: 99–100).
The history of any bourgeois nationalism can be traced through the

principal texts and events which mark the origins and progress of the
conception of the nation and its project as conceived by such ‘patriots’
and popularized among the people. But what is more important, and
here our point about classes and nations finally becomes clear, by
taking, like Balibar, a materialist view of the constructed-ness of nations
and communities – they are not just ‘imagined’ as Benedict Anderson’s
(1981) famous argument has it in some innocently popular way.
Rather they are fruits of a collective but also internally hierarchically
structured imagination, cultural products of societies whose structures

of material production bear upon those of cultural production. Such
societies react to the challenges posed by the spread of market relations
or the combined and uneven development of capitalism on the basis of
certain material and cultural configurations. While politically conservative
elements of the pre-capitalist dominant classes may be involved in
futile attempts to preserve their existing bases of dominance, the more
progressive elements among them will likely be engaged in ensuring
their dominance in the emerging capitalist society: the landlord turned
capitalist farmer or even industrialist is an archetypal figure of this
transition. Thus, pre-capitalist configurations form the basis on which
any national capitalist society, whether or not based on full juridical
equality, is nevertheless hierarchically restructured in the realm of civil
society in a way that the culture of the dominant classes, with a more
or less authentic history stretching back to the mists of time becomes
the ‘true’ national culture and those of all other classes and groups,
allied and oppositional, can be positively or negatively subordinated to
it. Therefore, most often upon independence, in spite of popular mobi-
lization which accompanied the national struggle, the structures of
dominance and subordination, of surplus extraction, do not radically
change. This has been the case with most nationalisms in Asia and,
barring various national communisms and some revolutionary funda-
mentalisms such as Iran in 1978, everywhere in the world. With the
eventual waning and appropriation of popular energies, their cultural
manifestations, primarily popular and progressive civic and egalitarian
elements of culture, whether ‘traditional’ or ‘modern’, also gradually
disappear from the ‘national culture’. The transmutation of that
nationalism into a cultural nationalism is not complete. Now the
culture of the dominant classes and groups, which always lay at its
core, emerges as more or less the entire of nationalism. This is, for
example, in broad terms at least, the story behind the much-lamented
transmutation of Indian nationalism into Hindu nationalism.7
No national capitalism exists as pure civil society and nationalisms
and national cultures are important mediators of the complex struc-
tures of inequality and hierarchy at the best of times. In all capitalist
national societies, structures of the pre-capitalist political economy – of
surplus extraction – form the basis on which the new capitalism and
the new nation emerge. While both may restructure these pre-given
forms to a greater or lesser extent, to they extent they remain class
societies, the substance of the original political economy and culture
persist if in new ‘modern’ or ‘nationalised’ forms. The authoritative
Radhika Desai 103
assertion of ‘tradition’ or ‘national culture’ in these contexts is usually

the discourse of a now more or less capitalist elite harnessing the non-
economic resources of ‘tradition’ in the hyper-exploitation of lower
classes, races, castes and women, perpetuating a distinctive fraud
against even the capitalist ideal of the exchange of equivalents, always
a heuristic idea rather than a historical reality, not to mention wielding
it against ‘modern’ and ‘alien’ ideas such as social justice. Such neo-
traditionalism and cultural nationalism also helps to cement at least a
superficial unity among competing sections of the dominant classes.
Cultural nationalism, based as it always is on the culture of the domi-
nant classes, also becomes the means for the management of the
intensified economic inequalities of contemporary capitalism by recast-
ing them as cultural differences. It becomes what Etienne Balibar called
‘a mechanism for the differential reproduction of the labour force’ – ‘a
process of ethnicization, of grading systems and inequalities within the
general workforce, whose “subjective” counterpart is the institutionali-
sation of racial-cultural prejudices among the dominators and the
dominated, and above all among the dominated themselves, on which
the ruling class can play at its own risk’ (Balibar 1991). Such a national
culture or tradition was always present in nationalism, even when it
was more progressive, but now, in the context of neo-liberalism, glob-
alization and increasing inequality, it becomes nationalism’s most
active element.
Cultural nationalism is generally viewed as culturally intolerant and
aggressively homogenizing against cultural minorities within nations.
This view is correct, as evinced by the attacks on minorities in many
countries, such as India, where cultural nationalism of a particularly
virulent sort has emerged. But it is also insufficiently complex. For cul-
tural nationalism need not always mean homogenization. The politics
of cultural nationalism will remain obscure until it is recognized that
‘diversity’ is central to the political management of the gross inequali-
ties produced by this new political economy as homogeneity is. In all
countries various degrees and varieties of subordinated inclusion and
outright othering of the economically underprivileged as ‘cultural
groups’ – which is the primary function and effect of cultural national-
ism – have been employed in the attempt to create viable coalitions of
support, in elections and in other forms of politics. These coalitions of
support are structured such that the proportion of economic to merely
‘cultural’ or ‘psychological’ rewards decreases as one goes down the
economic ladder, and from the centre to the periphery of the domi-
nant coalition of interests. These groups within the cultural nationalist
political formation who appear to be the most homogenizing in their

impulses, such as the shock troops of the lumpen which have accom-
panied cultural nationalism in many countries, are in fact the police-
men of the outer limits of these coalitions, inflicting exemplary
discipline on those ‘outside’ who may have the potential and/or
effrontery to object to such politics and the resultant political
economy. The effect of this in intimidating even those ‘within’ the cul-
tural nationalist community, in ‘showing them their place’ is as power-
ful as it is intended.
Among the more well-established bourgeois states of South, South
East and North East Asia, for example, cultural nationalisms take
the form not of homogenizing discourses but a form which in some
semblance is ‘multiculturalism’. These claims to respect and value
diversity are, however, accompanied by a new effrontery: whatever is
done in the name of the nation is, by definition, respectful of diversity.
Although more performative than credible, such claims do furnish
a brazen mask of respectability to be shown to the ‘international
community’.
In this Asian cultural nationalism may only be taking a leaf out of
the book of Western ‘multiculturalism’. It is neither meant to, nor
actually succeeds in, resolving the problems either of inequality or dif-
ference (Fraser 1995). It is by failing that multiculturalism has its real
effect: to serve as the occasion for majoritarian ‘backlash’. ‘Silent
majorities’, oppose ‘vocal’ minorities who get ‘special treatment’. Such
ideas, for example, the widespread anti-multiculturalist opposition to
‘political correctness’, are no longer the preserve of the extremists.
They create a pervasively authoritarian climate in the political ‘main-
stream’ as well. All demands for equality can be recast as those of
cultural minorities who must (not) be pandered to. While many
among the ‘progressive’ intelligentsia rail against global ‘cultural
homogenization’ and champion the cause of particularistic cultures,8
others, often still avowedly ‘progressive’, lend scholarly support to
these now frighteningly ‘mainstream’ arguments by reiterating the
need for a certain ‘basic’ level of cultural homogeneity in society for
legitimate order even in democratic states. Both discourses are wielded
against egalitarian movements as alien and destructive of the national
culture9.
Multiculturalism, like its Asian brethren, Nihonjinron, Hindutva,
Confucian Values or Asian values, oscillates between enforced con-
formity to a superior, more ‘liberal’, culture, and assimilationism. Both
require cultural boundaries to negotiate.
Radhika Desai 105
Nations as community within capitalism: an oxymoronic

construct?
There is a deep historical irony in the rise of cultural nationalism in a

time of historically unprecedented acceleration in commodification.
Tom Nairn argues that capitalist modernity did not only make the
reality and fear of cultural destruction real, it also provided the means
to resist it:
Modernity made such fear more alive and real, but has also made it
more contestable. Having been startled into memoriality, they
[nationalities] are damn well not going to subside again. Before
industrialization this happened all the time: cultures peoples, tradi-
tions would just ‘go under’, leaving a few puzzling bricks and stones
if they were lucky (Nairn 1997: 5).
Now, it is impossible to plausibly compare the rates of cultural destruc-

tion and survival under different modes of production (but one may
note, also plausibly, that cultural destruction is hardly unknown under
capitalism). But what is certain is that having seen so clearly the posi-
tive side of this irony, Nairn fails to see the negative side: that the
instruments offered by capitalist modernity or civil society, which
tends to generalize commodification, will, on the contrary, undermine
this community. When Balibar and Wallerstein also argue that nations
are only the latest in a succession of reactions to the effects of the
market on community, they also fail to note that the nation-state as a
form of community is different in that it faces the challenge of not just
of reacting to and placing limits on a stabilized system of market rela-
tions, but of accommodating to and fostering within itself a tendency
towards generalized commodification, which is, moreover, intensifying
and accelerating at an alarming rate. Insofar as the tendency of capital-
ism, as distinct from other economic orders whatever the extent of
markets within them, is precisely towards a replacement of all social
relations with commodity relations, to create generalized commodity
exchange as the basis of society, is not the idea of a nation as a modern
capitalist community ultimately oxymoronic? Or if not that, at least
fated to be excoriated by the very processes which it proposes to resist
only by accommodating? This returns us to the issue, posed earlier, of
whether we are witnessing the decline of nations and nationalism or a
resurgence of cultural nationalism. What does the rise of specifically
cultural nationalisms which are actually committed to little more than
harnessing their ‘cultural resources’ to the task of accelerating the

spread of market relations at home and more intensified imperialist
penetration abroad, and, as we have seen, to managing its contradic-
tions culturally, signal for the nature and dynamics of nations and
nationalism?
It would appear, prima facie, that the political efficacy of cultural
nationalism in the above respects faces, in the context of the intensified
and accelerated penetration of capitalism and commodification, new
challenges. The ‘cultural logic of late capitalism’ according to Fredric
Jameson (1991), rests in particular on the more or less complete
commodification of lands and the Unconscious (which we may, with
considerably less intellectual flair, translate simply as culture). The effect
of both on cultural nationalism is deeply problematic. Firstly, much of
the lore (fake and folk) of the nation derived from the experience of
rural life and the accelerated destruction of this specific mode of human
experience over the last 50 years, during which the peasantry has
become a progressively smaller minority and the rural migrants to the
cities of the third world only a generation away from deculturation
(Nairn 1997), also undermines nations, their cultural continuities and
stabilities. Secondly, contemporary capitalism is characterized by a
situation in which the very structures of cultural production and repro-
duction have been penetrated by commodification, while most ‘non-
cultural’ forms of production have, in a consumer and advertising
dominated culture, become matters of culture and lifestyle, themselves
subject to a pace of change in trend and fashion dictated by considera-
tion of accumulation and competition and not any independent aes-
thetic. This rapidly spiralling process robs culture of the solidity and
settled patterns of affinity, taste and social practice with which the
concept has hitherto been associated. Culture now sports the very
ephemerality, which characterizes the commodity form, vastly more
richly analyzed, of course, by Marx.
Cultural nationalism today is generated in structures of cultural pro-
duction, which are specifically capitalist and deeply commoditized. In
this context, the form cultural nationalism can now take is to older
eyes, inauthentic – cultural nationalist pop, rock and punk songs,
videos, and other cultural commodities (usually seen as the opposite of
culture). Their effect on the culture they claim to express can only be
actually to mine and undermine it. And as commodities these cultural
products are also subject to endemic ephemerality. At the same time,
paradoxically, in a system of commoditized culture and culturalized
commodity production, the stakes of ever-greater sections of the
Radhika Desai 107
capitalist classes in the ‘national culture’ have increased. Culture not

only offers then opportunities for employment and entrepreneurship,
economic activity itself depends on the generation of culture which
must necessarily, in an age where other forms of community have
been historically surpassed, be national. The climate of late capitalism
also, however, makes the life of a given cultural product short and
therefore this cultural nationalism moves along on shifting bases and
ground, appears very changeable and probably contributes to the very
anxiety and need for belonging which further fuels it.
Cultural nationalism is condemned to an instability and dynamism
that is usually not associated with nationalism or culture hitherto. It is
especially relevant that many analysts of Hindutva have seen it to have
had a strategy originally, when it was formed, and to have worked on
the basis of a long term molecular strategy to propagate it and preserve
it until it has finally got the reins of power in the country in its hands.
This view misses both the actual changeability of this ideology and
strategy over time, including the decades when it was more or less in
the political doldrums, not to mention the volatility in the face of the
imperatives of the politics of power and the politics of support in the
1990s. It also exaggerates its separateness from the ideology of the sur-
rounding society. Rather it was always linked to its conservative,
authoritarian, religious, nationalist and populist currents. And it con-
tinues to appropriate more and more of society’s figures, symbols and
discourses to itself, even the most improbable. Hindutva’s attempt to
appropriate Dr. B.R. Ambedkar, the leading nationalist figure who
attempted to represent the cause of the untouchables and is regarded
as the father of India’s secular constitution, is of this order. But the
process may fast be spiralling to exhaustion.
Notes
1 I would like to thank Stewart Scott for his help with the typing and editing. I
would also like to acknowledge the contribution of the Centre for Asia
Pacific Initiatives at the University of Victoria. A fellowship there in the year
2002–3 contributed to the elaboration and completion of this paper.
2 The critical literature on the problematic nature of the relationship between
capitalism and democracy is vast, and includes the voluminous, and con-
tinuous rumination on the subject by several generations of Marxists. Two
particularly useful discussions can be found in Offe 1984 and Therborn 1977.
3 As is well known, there have been many such previous waves: the ‘creole’
nationalisms of the Americas starting in the late 18th century; the rise of
nationalisms in Europe in response to the Napoleonic wars and the conver-
sion of French revolutionary universalism itself into a distinctive form of
nationalism (and not just imperialism); the Springtime of the Peoples; the
integrations of Germany and Italy; the Central and Eastern European nation-
alisms which proved so destabilizing of the European states system in the
period before the Great War; the tidal wave of anti-colonial nationalisms
which achieved their successes from the middle of this century till the lifting
of the Apartheid regime in South Africa and the independence of Namibia
and which sired more nation-states than any of the previous waves; and
finally the post-Communist wave which created new nations not just within
the territory of the former Eastern Bloc but also in other parts of the world
where the Cold War had prevented nationalist movements achieving their
goals. Palestine and Northern Ireland are two of the chief examples.
4 The earliest theorist of capitalist modernity on a world-wide basis, Hegel,
with his stress on universal reason, regarded nationalism, the embodiment
of the particular in modern universalizing times, as particular, ‘a particularity
without quiddity’, inconsequential empirical variety, which while temporar-
ily mutually conflicting, would ultimately be superseded in the order of ‘the
high praetor that is the universal spirit’ (Anderson 1992: 292–4.)
5 The centrality of nationalism rather than racism or anti-Semitism to Nazism
and to fascism in general has been best argued by M. Neocleous (1998).
6 After his more Gellnerian works on nationalism Nairn’s (1977) swaggering
endorsement of the ‘primordialists’ is surprising. It appears to be an instance
of understandable but misdirected spite, contesting the surely non-existent
notion that ‘nationality’s general lineage… is either dubious or dispensable’
(1977: 8). The competing ‘constructionist’ conception does not deny definite,
and even authentic, pre-national or national cultures, nor the link between
them. Indeed, it is the link between the two, and the light it sheds on that
between forms of pre-capitalist and capitalist domination and subordination,
which is a neglected area of study and the focus of this account of the transi-
tion from developmental to cultural nationalism.
7 While the fraternity of organizations centred around the RSS have played a
crucial role in this transition, this change, particularly the electoral rise of
the RSS affiliated BJP is based on a far broader and diffuse acceptance of cul-
tural hierarchies based on the legitimation of the predominantly Hindu cap-
italist and middle classes.
8 Frankel (1977) has recently examined the explicit endorsement by the anti-
socialist culturalist ‘radical’ journal Telos, of the principal themes of the neo-
fascist populism of the Extreme Right, such as the French National Front and
Italy’s Lega Nord.
9 A common admiration for the Nazi jurist Carl Schmitt’s theories of ‘the
political’ unites Telos and the democratic theorist Chantal Mouffe. I have
examined the seriously anti-democratic consequences of Schmitt’s assertion
of axiomatically irreducible cultural difference, a form of irrationalism, when
imported into a theory of democracy, however well intentioned (Desai,
2002).
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6
Political Culture, Alternative
Politics and Democracy in Greater
China
David Zweig
Introduction
What forces and circumstances lead people in Asian societies to turn

from formal democratic institutions to alternative institutions or extra-
institutional political action?1 According to Rocamora, when elections
are controlled by central or local oligarchies, citizens in East Asia form
civic organizations or non-governmental organizations (NGOs), join
social movements, or turn to social protest (Rocamora 2000). This
chapter addresses this issue in three Chinese societies that are part of
Greater China: Taiwan, Hong Kong and the Chinese mainland. In this
way, we can account for the impact of Confucian culture on political
behaviour, and highlight the role of democratic values and political
structures on the decision to rely on formal versus alternative politics.
Also, rather than accepting that democratic institutions failed in these
societies, I chose to treat the assertion that people had to turn to alter-
native democracy as a hypothesis to be tested empirically.
One of the hallmarks of Asian politics is the existence of oligarchs who
dominate political processes and ensure that less elitist social forces
cannot successfully use democratic institutions as channels for asserting
and pursuing their interests, despite the existence of some democratic
institutions – in particular, elections, campaigning, and voting. Formal
constitutions emasculate political structures so that outcomes are con-
trolled by extra-parliamentary alliances, local political factions or central
oligarchies; this leads to the emergence of what is now commonly called
‘illiberal democracy’ (Zakariah 1997: 22–43). Under these conditions
society is more likely to resort to informal procedures, some highly demo-
cratic, such as the formation of legal, non-governmental organizations
111
112 Political Culture, Alternative Politics and Democracy in Greater China
(NGOs), while in other cases they turn to social protest and extra-legal
political activity in order to elicit resources from political elites.
To assess these relationships, this chapter asks the following ques-
tions and puts forward certain hypotheses.
First, how deeply are democratic values imbued in the minds of
Chinese citizens? Do they believe they have the right to participate? Do
they have the information necessary to participate in a knowledgeable
way? Here, one would hypothesize that the greater the level of democra-
tic consciousness, the greater the demand for meaningful political partic-
ipation, either through formal or alternative political means.
Second, what is the nature of the political structures, in particular
the party structure, the electoral system, and the authoritative body to
which people are elected? Is the process by which candidates and
winners are selected open and competitive? Are those who are elected
able to influence the authoritative allocation of value by the political
system? Indeed, can the opposition party, if it wins at the ballot box,
actually come to power? If parties exist but cannot take power,
members of society, particularly those not affiliated with the ruling
party, are likely to resort to informal political strategies, including
public protest, to influence government policy.
Finally, based on the level of democratic consciousness and the
nature of the political structures, we will try to explain why citizens in
the three different Chinese societies rely on formal versus alternative
forms of political behaviour.
Democratic consciousness: the role of political culture
Democratic consciousness refers to the subjective attitudes of citizens

towards their right or desire to participate in politics. In many ways, this
reflects standard aspects of a society’s political culture, including views
about the process of political activity, tolerance for overt political conflict
and opposing views, awareness of political information and efforts by cit-
izens to attain such information. While the absence of such values within
a society complicate the creation of a participatory or democratic polity,
their existence in the face of non-democratic political structures could
trigger social unrest or political repression. For democracy to succeed,
political elites must tolerate political conflict and accept the norms of
rotation and compromise, that is, willingly turn over power to the oppo-
sition if they lose elections (Pennock 1979: 244).
To what extent can these values develop within an Asian, and partic-
ularly Chinese, society? According to Pye, and others who share a
David Zweig 113
culturalist view, Chinese political culture is fixed and relatively passive,

with Chinese society governed by elites who rule by moral example.
These elites favour the idea of a static, conformist social order, a form
of ‘anti-politics’, which ‘precluded the kinds of activities associated
with using power competitively in support of different values’ (Pye
1985: 42). Also, fears of social disorder that might follow from a transi-
tion to full-fledged democracy mitigate against most forms of political
action by Chinese citizens. Therefore, we expect little tolerance for dif-
fering opinions and little public contestation for political power.
Moreover, with formal government as the sole legitimate basis for
power, societal pressure becomes illegitimate and a manifestation of
corruption. The result is a highly paternalistic political culture that
relieves society’s deep-seated need for social and political security.
While this study looks at all these societies separately, cross-national
data on levels of attention to politics show that some citizens in all
three Chinese societies are quite interested in gaining political infor-
mation. Moreover, despite differences in levels of socio-economic
development and political structures, there is a general similarity along
this particular dimension, and in fact, rural China is not the most tra-
ditional of these societies.
Political structure
A second aspect to consider is the nature of the formal political struc-

tures. Is the system democratic, with multiple parties competing
through free, democratic elections? What is the constitutional arrange-
ment – do victors in elections constitute a legitimate political authority
that can influence the allocation of political and economic values? The
extent of this formal democracy may be measured by standard phe-
nomenon such as the number of political parties, rates of participation
in campaign related activity, and the share of resources allocated by
the freely elected political authority.
Third, are the parties and elections truly a mechanism for the com-
petitive selection of political elites, and can a multiplicity of social
forces, including the poor, find channels for political expression
through these structures? In East Asia, although numerous parties
compete through relatively free elections, these political systems are
often dominated by political oligarchies. Thus, as Joel Rocamora argues
(2000), despite the multi-party nature of the Philippines, the parties are
really the creation of individual politicians and have few links to social
forces. They cannot serve as a mechanism through which society can
pursue its interests, thus citizens turn to informal democracy and

NGOs as an alternative means of pursuing these interests.
In our three case studies, significant variation exists in the nature of
the electoral system and party structure, as well as the ability of those
who are elected to affect public policy. In China, villagers can elect a
fully constituted political authority, the Village Committee, but the
scope of its influence is limited to local economic issues. In Hong
Kong, despite the existence of real political parties who compete for
public office through a democratic process, the constitutional arrange-
ment imposed on Hong Kong by China and the British under the
‘Basic Law’ – Hong Kong’s mini-constitution – makes it impossible for
these parties to perform the functions prescribed for them in democra-
tic theory. Finally, in the 1990s, Taiwan established a fully democratic
system with competitive elections among party candidates for all key
public offices, including the presidency. We therefore may respectively
characterize these three Chinese societies as examples of ‘village’,
‘partial’, and ‘full’ democracies.
Formal versus alternative democracy: politics and protests
How do levels of democratic consciousness intersect with each

society’s political structures to determine the pattern of politics
within that society? We suggest that the extent to which the politi-
cal structures respond to the level of demand for democratic or
responsive politics helps explain whether citizens rely on formal
versus alternative forms of democratic activity. Where the system
fulfils those demands through a fully democratic process, as in
Taiwan, we anticipate lower levels of social protest, particularly
illegal or violent political activity, especially when compared to the
years before the development of the multi-party system. We also
anticipate less of a need for alternative democratic institutions and
less reliance on informal political structures.
In rural China, despite the rise of democratic consciousness and the
establishment of village democracy, local political oligarchs, party
cadres or newly emerging businessmen, may still be able to manipulate
the electoral process. However, with the emergence of a new form of
candidate selection, called ‘selecting from the sea’ or ‘hai xuan’, the
level of manipulation by local elites or party leaders may be decreasing.
Nevertheless, since many injustices and social concerns in rural China,
including corruption and the imposition of unofficial fees and taxes,
are perpetrated by elites beyond the reach of village elections, we
David Zweig 115
would anticipate high levels of political and social unrest in the

absence of state suppression or alternative mechanisms for seeking
redress (Bernstein & Lu 2000). Also, villagers also may turn to informal
associations, such as religious or clan organizations to meet their
needs.
Finally, despite a relatively high level of democratic consciousness in
Hong Kong and the existence of competitive parties, the unique consti-
tutional arrangement which prevents parties from playing any major
role in policy making and the distribution of social resources may
create a significant role for informal political institutions and social
protest. Moreover, continued efforts at this democratic denial could
lead to serious levels of social unrest.
Taiwan: public consciousness, the electoral mechanism,

and formal democracy
Taiwan’s democratic transition reflects a classic case of a disenfran-

chised and excluded majority that employs a mass movement to assert
its political rights and create its own political party to challenge the
ruling oligarchy and eventually both democratizes the political system
and subsequently takes political power. Remarkably, this process has
occurred relatively peacefully, due in part to the enlightened leadership
of Chiang Ching-kuo, who realized that Taiwan’s future development
depended on political liberalization and the emergence of a multi-
party system. Still while many observers see Taiwan’s transition con-
firming the argument that inevitably socio-economic developments
lead to political reform, the role of ‘the electoral mechanism’ and other
political forces is too frequently downplayed (Hu 1993: 134–168). For
Hu, the existence of partial democracy, with even limited electoral
process, served as a critical independent variable undermining the
authoritarian system and promoting the democratization of political
system.
Democratic consciousness in Taiwan
Various studies of Taiwanese political culture suggest that structural

changes in the political system, as well as the experience of democratic
participation, changed people’s attitudes towards politics. According to
Hu, between 1983 and 1989, the value orientations of voters in Taiwan
underwent a distinctly pro-democratic transformation, altering the po-
litical culture of Taiwanese society. And while support for ‘individual
freedom’ and the ‘separation of powers’ remained under 75 per cent,2

with the former supported by only 50.1 per cent and the latter by 64.4
per cent, dramatic increases of 16.4 per cent and 17.6 per cent respec-
tively indicated that between 1983 and 1989, Taiwan had moved towards
a far more democratic political culture (Hu 1993: 143). Creating an indi-
cator by combining individual evaluation on four democratic value-
orientations, Hu shows that while the majority of Taiwanese still
remained ‘modern authoritarians’ – having increased from 63.7 per cent
in 1983 to 68.3 per cent in 1989 – the number of ‘traditional authoritar-
ians’ decreased from 23.5 per cent in 1983 to 11.1 per cent in 1989, while
the per cent of people with ‘liberal democratic’ values rose from 12.8 per
cent to 20.7 per cent (Hu 1993: 144). Another study by Parish and Chang
also found little support for the culturalist argument of ‘change-resistant
political values’. Instead, they argued, socio-economic modernization
combined with changes in political structure explained value change
(Parish & Chang 1996: 27–41).
Finally, responses to a series of questions about attitudes towards
freedom, political pluralism, and separation of powers also show very
significant change in political values in Taiwan between 1984 and
1996. However, further dissection of the data show that changes in
attitudes towards politics occurred soon after the lifting of martial law
in 1987, again supporting the argument that changes in political struc-
ture can affect attitudes rather rapidly, and that what are perceived as
deeply held Chinese values may be altered by changes in political
structure.3 Thus for all questions but number four, more than half of
the change in value recorded for that question took place between
1984 and 1987. For question four, however, the experience of a multi-
party system in the 1990s, more than just the lifting of martial law,
probably convinced people that such systems did not necessarily lead
to chaos.4
Changing political structures in Taiwan: the emergence of

the multi-party system
Beginning in the 1950s, the Kuomintang (KMT), composed of main-

land political elites who moved to Taiwan in 1949, introduced local
elections as a means to legitimate its rule. Its controls over local politi-
cal factions or local oligarchs and the co-optation of local Taiwanese
elites allowed it to totally dominate the electoral process through the
early 1970s. But beginning in the 1977 local elections, a loosely co-
ordinated opposition group, bearing the label of ‘Dangwai’, (or ‘outside
David Zweig 117
the party’, that is outside the KMT) began to make inroads on the
KMT’s power base. Over the next seven years, the opposition created
various semi-formal campaign organizations, and in 1986 created a
formal party, the Democratic Progressive Party, or DPP. During this
period, the KMT was hard pressed to undo this process and arrest the
movement’s leaders as many of them had emerged through local elec-
tions sanctioned by the KMT, and therefore bore political immunity.
To stabilize the political and economic system; the KMT tried to incor-
porate the opposition into the political system by allowing them to
compete openly as an organized political party in all-island level elec-
tions. These elections for some seats in the Legislative Yuan, in 1986
and 1989, transformed the Taiwanese political landscape by allowing
the local population to participate in nationwide elections that further
democratized their political consciousness.
A further critical structural change was also underway. For decades,
mainlanders who had come to Taiwan in 1949 and who claimed their
seats based on the 1947 elections on the mainland had controlled
Taiwan’s parliament, the Legislative Yuan. But by the late 1980s most
of the old guard had died off, so in 1993, all seats in the Legislative
Yuan were put up for grabs, affording the opposition a real chance to
expand its representation.
Social protest and alternative politics in Taiwan
Political liberalization in Taiwan, particularly before the official sanc-

tioning of an opposition party, triggered a dramatic increase in the
incidence of social movements and social protest. According to one
report, the number of social protests rose from 143 in 1983, to 183 in
1984, 243 in 1985, 271 in 1986 and then in 1987, the year that martial
law was lifted, 676 incidents of social protest were reported (Chu 1994:
100). Numerous social movements led these protests which, though
generally apolitical, challenged the KMT state to be more responsive to
society’s concerns, to dismantle its corporatist controls, and establish
new rules for politically sensitive subjects. For example, led by a power-
ful environmental movement, public protests over environmental
degradation grew dramatically. While there was an average of 13.75
environmental conflicts per year between 1980 and 1987, between
1988 and 1990 the average jumped to 31.3 protests/year, peaking at
258 in 1991 alone (Tang & Tang 1997). Chu attributes this rise in
public protest to a lack of secondary associations or other functional
intermediaries to translate popular discontent into effective policy
responses, as well as limited capacity of the authoritarian state to

respond in a timely fashion to emerging popular demand (Chu 1994:
106).
But informal politics had long been a hallmark of Taiwan’s political
system. When the KMT moved to Taiwan it empowered competing
local factions or clans, giving them control over local politics, all the
while linking them to the centre through a system of networks and
patron-client ties running out of Taipei to the whole island. These fac-
tions helped the KMT insure its own hegemony, even as it allowed rel-
atively free and fair elections. This system, which prevailed through
the 1950s, 1960s, and the early 1970s, mirrors local politics in the
Philippines as described by Dr. Rocamora in his companion paper
(Rocamora 2000).
However, over time these local factions and clientelist networks,
which formed an overlapping formal and informal political structure,
found winning local elections more and more difficult. As society grew
wealthier and more educated, aspiring local political entrepreneurs
competed for political power through elections. Drawing on issues
such as national identity and Taiwanisation, horrendous environmen-
tal degradation, and political reform, these new contenders challenged
the local power structures. Elections that had once been a mechanism
for control, now became a public process of political contestation
through which local interests competed for government resources.
The continued influence of informal political power in the localities
and the increased role of ‘black money’ politics is a major target of
political protests. Political reform remains high on the political agenda
of many citizens, along with concerns about social order and cross-
straits relations. Political protests have probably become more civil, as
Rigger argues, ‘the frequency of demonstrations has diminished
steadily as reform has progressed’.5 In fact, the occurrence of violent
assemblies and parades has decreased significantly since the peak year
of 1989, when there were reportedly 28 cases. In 1996, there were eight
cases, with three in 1997 and four in 1998. Similarly, the number of
people injured in political protests has decreased significantly since
1988, when 486 people were hurt. While numbers stayed over 100
through 1994, only 25 people were harmed in 1997 and 32 in 1998
(National Police Administration 1998: 181). Still, citizens have on
various occasions in the late-1990s taken to the streets en masse to
protest government’s inability to halt ‘gangster’ politics.
Despite the emergence of a stable electoral system, increasing wealth
and autonomy of local politicians has allowed informal politics to play
David Zweig 119
a major role in Taiwanese politics. With elections now the ‘sole, legiti-
mate channel for upward mobility and access to key public offices’,
winning elections has become supremely important for local KMT
bosses (Kau 1996). Also, due to the ability of the DPP to field popular
local candidates, money has become a key factor in determining elec-
toral outcomes. Thus local politicians, factional leaders, and powerful
clans have become power brokers who negotiate with the central KMT
authorities, more as equals than as supplicants, demanding a variety of
payoffs for turning out the votes. According to Kau, since the KMT has
to rely more and more on the rich and powerful to deliver votes, ‘it is
now quite commonplace to see the forces of factional bosses, big clans,
business conglomerates, and Mafia-type gangsters take control over
local political campaigns’ (Kau, 1996: 302). The rise of criminal ele-
ments among local politicians – in 1994, 35 per cent of 858 first term
councilmen at the township and village level had criminal records or
associations with illegal gangs – has particularly harmed the KMT,
which, lost out to the DPP in the recent presidential election largely
over the issue of political reform and ‘black money’ politics.
Hong Kong: parties without power in a ‘partial democracy’
Hong Kong is a hybrid political system in that it is neither clearly

authoritarian nor democratic. The population has a strong sense of
democratic consciousness and as well formal political parties that were
established in 1991 and compete vigorously in the electoral process.
However, the constitutional arrangement imposed on Hong Kong by
the Beijing government created a highly ‘restricted’ or ‘partial demo-
cracy’.6 Under this arrangement, political parties that are popularly
supported by citizens have minimal influence on government policy
because elected legislators cannot initiate public policy. As a result, the
role of political parties in decision-making over the allocation of politi-
cal values remains quite limited, weakening a key channel for state-
society communication, confidence building, and elite-mass linkages.
The parties and other political institutions poorly manage social and
political discontent (Lau 2000). Moreover, clientelist parties and elites
without strong grassroots support increasingly dominated Hong
Kong’s government (Hing 1998: 67–87). Yet the leadership in this
‘executive led’ political system is popularly seen as excessively pro-
business, even as social inequality in Hong Kong grows. This growing
gap between haves and have-nots, and popular dissatisfaction with
livelihood issues, such as housing and health care, increase popular
dissatisfaction with the government. In fact, the summer of 2000 wit-

nessed unprecedented levels of public protest, leading some observers
to assert that political instability is no longer beyond the realm of pos-
sibility (Hing 1998).
Democratic consciousness in Hong Kong
A common stereotype about Hong Kongers is that they care only about
making money and not about politics; many studies characterize them
as politically apathetic. But given the political constraints imposed by
British colonial society, Hong Kong’s position next to a soon-to-be-
sovereign China, and the refugee status of so many inhabitants, Hong
Kong only began in the early 1970s to develop a more active political
culture (Degolyer and Scott 1997: 68–78). And as territory wide polit-
ical structures were erected that encouraged grassroots activities, a
foundation was laid for rapid political development in the 1980s and
1990s. In particular, the Tiananmen crackdown in Beijing awoke the
population to the continuing dark side of the soon-to-be sovereign
power, while the political reforms of Governor Patten allowed for
greater political expressions of those political concerns.
Hong Kongers are voracious consumers of all types of political and
economic information. According to the Hong Kong Transition
Project, 64–68 per cent of people surveyed read a newspaper every day.
In April 1998, 48 per cent of people reported watching news or current
affairs programs on television for seven hours or more/week, while in
April 2000, 38 per cent were still doing so.7
Hong Kongers also have a high tolerance for political conflict. About
80 per cent find multi-party competition in elections and party debates
within the legislature, acceptable. Approximately three-quarters of the
people interviewed accept disagreements between Legislative Council
(Legco) and the Executive Council (Exco), while over two-thirds of the
population also support the idea that people have the right to express
their political opinions through street demonstrations and protests.
Hong Kongers also resent non-democratic political activities. While
the findings are less than conclusive, only 50 per cent of citizens accept
the idea that the Executive Council should veto proposals by the
Legislative Council, even though this power is enshrined in the Basic
Law. And while those who did not find such actions acceptable
decreased from 28 per cent in 1998 to 22 percent in 2000, 22 per cent
responded ‘don’t know’ in 1998, while 28 per cent did so in April
2000. Clearly there is a great deal of ambivalence on this issue. But
David Zweig 121
when asked about the right of business groups to veto grassroots pro-
posals, people showed a strong support for pluralist democracy and
strong resentment towards the influence of the ruling oligarchy. In
1998, more people (45 per cent) found business groups vetoing grass-
roots proposals unacceptable than acceptable (45 per cent versus 34 per
cent), although in 2000 more people found it acceptable than unac-
ceptable (39 per cent versus 36 per cent).8 Still, in April 2000, 25 per
cent of those interviewed selected ‘don’t know’ in responding to this
question.
Political structures: a legislature with parties but no powers
The political structures in Hong Kong were carefully crafted so as to

weaken society’s and Legco’s ability to influence policy. Hong Kong is
an Executive-led polity where the Chief Executive wields enormous
(almost unlimited) power, and this Chief Executive, Tung Chee-hwa, is
quite anti-democratic. Even before he took office, Mr. Tung demon-
strated what Lau Siu-kai calls an ‘abhorrence of politics’ and political
parties, as well as a political conservatism that leads him to reject even
a watchdog role for the elected legislators (Lau 2000). He disbanded the
elected municipal councils, consistently refuses to meet with the
Democratic Party, previously the strongest party in Hong Kong, and
denigrates the legislature, seeing it as little more than a gadfly he must
tolerate.
Political parties in Hong Kong are weak; democratization was a top
down affair, unlike the process that occurred in most de-colonized
societies it was not a fight led by political parties against the colonial
power; thus, parties were not able to create their own legitimacy as
forces for democratization and political liberalization. After ten years
public support for parties is still low and only 21.7 per cent of Hong
Kongers had any Party ID. In large part, the partial nature of the demo-
cratic system in Hong Kong and the political context – that is, its early
days of transition to mainland sovereignty – is an important impedi-
ment to party development.
Still, following the Tiananmen crackdown in Beijing, parties were
seen as the key institution that could promote more rapid political
democratization and thereby protect Hong Kong from Beijing. In a
1998 survey, 44.7 per cent of Hong Kongers believed that parties were
needed, and only 18.2 per cent said that they were not needed (Lau &
Kuan 2000). In particular, the Tiananmen crackdown strengthened the
stature and popularity of the Democratic Party (DP) that was seen as
the party leading the opposition to the authoritarian rule by Beijing.

Even in 1998, people who were concerned about the pace of democratiz-
ation in Hong Kong favoured the DP over other parties, while those
who trusted Beijing and the Hong Kong government favoured the pro-
Beijing Democratic Alliance for the Betterment of Hong Kong (or DAB),
as well as the pro-business Liberal Party. In essence, the Democratic
Party was perceived as the key opposition party vis-à-vis the Hong
Kong government and the government in Beijing.
Yet, in the past few years, particularly following the East Asian
crisis, people’s concerns have shifted away from singular concerns
with democratic freedom, towards multiple concerns about economic
opportunities and livelihood issues. The result has been a simultan-
eous decline in the popularity of the Democratic Party, which has
failed to address these livelihood issues, and the rise of the Demo-
cratic Alliance for the Betterment of Hong Kong. This latter party has
benefited from strong support from the ruling oligarchy, which has
been encouraged by pro-mainland forces in Hong Kong to help it.
DAB cadres have received management training at Qinghua Uni-
versity in Beijing, funded by members of the oligarchy. While
members of the Democratic Party must turn over some of their Legco
salary to the party to help finance its administrative costs, the DAB is
flush with cash and funds two full-time staff in each electoral con-
stituency that respond to complaints from local constituents about
grassroots issues. As a result, the DAB is building a strong political
machine within the community that is likely to result in their becom-
ing the largest party over the next few years.
The unique characteristics of the Hong Kong legislature further con-
tributes to the limited role parties play in the political process. Both
Beijing and the British colonial authorities favoured keeping Legco weak
so that even if a single party came to dominate the legislature, it
would not be able to veto bills proposed by the Executive. Thus severe
limits were placed on the role of parties to serve as interest articulators or
representatives of societal interests. Article 74 of Hong Kong’s mini-
constitution, the Basic Law, scuttles the right of private members to
propose any bills ‘with meaningful policy implications’. 9 The only real
power granted to Legco is the right to veto government bills, particularly
its budgets, the threat of which gives them some negotiating powers.
But this power is limited by the strong power of pro-government
business leaders in Legco, whose dominance is secured because the
electoral system has been structured in such a way as to insure that no
liberal political party can translate popular support into control of the
David Zweig 123
legislature. As of 1999, only 40 per cent of the seats in Legco (20 seats)
were directly elected from geographic constituencies, another 50 per
cent (30 seats) were elected through highly unrepresentative ‘func-
tional constituencies’ – where only leaders in professional associations
are allowed to vote for their representatives to the legislature – and
20 per cent or ten seats were elected by a pro-Beijing, pro-business
selection committee. Efforts by former Governor Patten to further
democratize the functional constituencies by allowing employees, as
well as the elites, within a sector to vote, did not survive the 1997 tran-
sition, as Mr. Tung reversed those reforms after coming to power so
that once again, only the leaders, often the owners of businesses, in
each sector are allowed to vote.10 Even in September 2000, the Election
Committee still selected six members of Legco, allowing the number of
people directly elected from geographic constituencies to rise to 24
seats. Moreover, the proportional representation system used in the
geographic constituencies further weakens liberal forces in Hong Kong.
Under the electoral system, people vote for a party list with multiple
seats in each constituency, rather than a first-past-the-post system; this
type of system favours less popular parties, such as the DAB, as it
can get seats with less than 30 per cent of the vote in any district.
According to Lau,
The labyrinthine manner whereby the legislature is elected makes it

impossible for any political party, nor any organized political force
for that matter, to control the legislature. Popular parties face insu-
perable obstacles in developing themselves into powerful political
forces since the popularly elected seats in the legislature constitute
only a minority in the body. Furthermore, the proportional repre-
sentation method used in the direct election of legislators inhibits
the development of strong popular parties. Functionally elected leg-
islators owe their allegiance to sectional interests and conduct them-
selves mostly as individuals and hence largely beyond the control of
party discipline. The few legislators elected by the Election
Committee are the products of factional infighting in the tiny elec-
toral body. Naturally they do not form a cohesive force on their
own. Consequently, Legco is a highly fragmented and fissiparous
political body (Lau 2000: 6).
Moreover, parties have no access to the Chief Executive, who is

the initiator of most legislation, as he refuses to meet with them in
part out of his fear of legitimizing the Democratic Party. Therefore,
not surprisingly, political parties remain most popular among those

who are disaffected with the political authorities (Lau & Kuan 2000).
Alternative politics, NGOs, and public protests in

Hong Kong
The emergence of political parties in the early 1990s and the political
liberalization of the Patten years (1992–1997) did not obviate the need
for public meetings and public processions, both indicators of informal
political activity. According to data from the Hong Kong police, the
number of public meetings between 1987 and 1995 increased from 92
to 1,112 with the major increase occurring between 1990 and 1991,
after the Tiananmen crackdown in Beijing. Similarly, the number of
public processions rose from 172 to 401, with a jump of over 25 per
cent in 1994–95.
With weak parties and the business oligarchy dominating the formal
institutions of political authority, Hong Kongers resort to forming civil
society organizations and other grass roots bodies to promote their
interests. The number of registered societies has continued to grow
since the early 1980s, and despite the legalization of political parties in
1991, the number of registered societies increased by 75 per cent
between 1991 and 1998.
The stature of political parties has been declining over the past few
years, triggered in large part by their inability to help citizens resolve
many of their livelihood needs. As socio-economic issues rose onto the
political agenda, as a result of the East Asian crisis, none of the parties
were able to deal with them. Despite its strong pro-democracy position,
the mainstream faction in the Democratic Party, reflecting its middle
class nature, is economically conservative; they opposed the introduc-
tion of a minimum wage in Hong Kong. The Liberal Party cannot raise
such issues, as it reflects business interests and draws its support from
the Functional Constituencies. Finally, the DAB is pro-Beijing and pro-
government, and therefore cannot adopt anything nearing a radical
social agenda. Only more marginal parties, such as the Frontier, or the
radical faction within the DP could respond to these articulated social
interests. As a result, the East Asia crisis helped decrease the political
support for political parties, precipitating political disillusionment and
a period of ‘party stagnation if not decline’ (Lau & Kuan 2000).
Given the impotency of the parties to affect the legislative agenda,
party competition is perceived as reflecting power struggles among elites
more than as battles over public policy. There has been a significant
David Zweig 125
decline in popular acceptability of both multi-party competition in elec-

tions, from 85 per cent to 78 per cent, and party debates in Legco (from
83 per cent to 77 per cent).11 Most important, in a recent survey, Hong
Kongers expressed the views that they felt neglected by politicians, as
only 14.1 per cent of people interviewed thought that politicians were
concerned about their problems, while 61.5 per cent found politics and
government complicated and difficult to understand (Lau 2000).
Similarly, when asked whom the Chief Executive and the civil servants
should listen to if there is an important livelihood issue needing resolu-
tion, only 2 per cent of people said that the government should listen to
political parties and pressure groups, while 16 per cent favoured directly
elected Legco members, the majority of whom are affiliated with political
parties. The most important group to be consulted was the general public
which accounted for some 43 per cent.
Yet even as support for parties declined, so has popular support for
street demonstrations and protests. Whereas in June 1998, 72 per cent
of citizens found such protests acceptable, and 18 per cent found them
unacceptable, as of April 2000, only 67 per cent found them acceptable
and 23 per cent found them unacceptable. Yet it is clear that since the
spring of 2000, the number of protests increased; on July 1 alone, five
different groups fanned out throughout Hong Kong, staging various
protests. According to the International Herald Tribune, Hong Kong had
turned from the ‘City of Light’ to the ‘City of Protest’(Chandler 2000).
Even the pro-business Liberal Party felt it necessary to bring its people
to the streets to protest the decline in property values.
Finally, while senior and established leaders of the Democratic Party
favour working within the system, a core group of ‘young Turks’ prefer
to engage in more street level activity. Motivated by social issues rather
than lofty concerns about democracy, these DP members see the polit-
ical system – including the Legislature – as unresponsive and feel that
direct confrontation is the only way to gain their goals. The split is also
driven by the continuing decline of the DP, which is seen by some
observers as another reason that ‘democracy in Hong Kong may have
to hit the streets’ (Mitchell 2000: 26–28).
Concluding comments on Hong Kong
It is ironic that the ruling oligarchs depict Hong Kongers as unprepared

for full democratic participation while Hong Kongers consume massive
amounts of political information and strongly support democratic,
rather than non-democratic practices.12 In fact, it is the wealthy in
Hong Kong who are not prepared for a full democratic transition. This
‘democratic denial’ can only return to haunt the oligarchy by generat-
ing future political instability.
Hong Kongers increasingly see the government, ruled by the oligarchy
and its political representatives, as increasingly unfair. They feel Mr. Tung
bows to the will of Beijing and to the strongest of the oligarchs, Mr. Li
Ka-shing, one of the wealthiest men in the world. Thus people are
becoming increasingly worried about their political freedom. While in
July 1998, 74 per cent of people were ‘not worried at all’ about personal
freedom, that number had dropped to 62 per cent in April 2000. At the
same time, the numbers that were ‘slightly worried’ rose from 13 to
20 per cent. Still the numbers who are ‘very worried’ remains at only
5 per cent. Nevertheless, as more and more people perceive that elections
are little more than ‘window dressing that creates an illusion of democra-
tic development’, the elite-mass gap could further deteriorate.
The PRC: ‘village democracy’ without parties
Of our three Chinese societies, the PRC has undergone the most limited
amount of democratic development. Nonetheless, since 1987 the Chinese
Communist Party (CCP) has instituted basic grassroots democracy in the
form of village elections for a Village Committee that effectively controls
certain aspects of the local economy. Overall, these Village Committees
cannot challenge local CCP authority, although one reason they were
introduced was because village level CP committees had seriously deterio-
rated in almost 80 per cent of villages following decollectivisation. The
CCP felt it was losing control over the countryside, so when a young
group of rural specialists approached some senior party officials and rec-
ommended the introduction of village democracy, these leaders felt that
the party had little to lose. Although theoretically autonomous these
Village Committees fall under the influence of the township government,
the lowest level of official government authority in the countryside that
rests one bureaucratic level above these village committees. Given that
there are no other truly free elections at any other levels of administra-
tion in China, I have labelled this form of political structure ‘village
democracy’.
The strength of the ‘democratic idea’ in rural China
Despite the low level of economic development in rural China, data

from a survey carried out in summer 1999 in rural China reveal strong
David Zweig 127
support for the ‘democratic idea’ in rural China.13 Villagers were asked
to respond to a series of six questions about democracy and electoral
politics. For example, we asked villagers to respond to the following
statement – ‘Only people with specialized knowledge and ability have
the right to speak during periods of decision making’ – by selecting
‘strongly agree’, ‘agree somewhat’, ‘don’t agree very much’, or ‘com-
pletely disagree’. We also allowed them to respond with ‘don’t know’
or give no response. Since this statement reflects non-democratic
values, those who ‘strongly supported’ the above statement were given
a score of –2, while those who ‘agreed somewhat’ received a score of
–1. Similarly, those who ‘disagreed somewhat’ received +1, while those
who ‘strongly disagreed’ got +2. Interestingly, almost 45 per cent of
villagers disagreed with this statement – 27.6 per cent ‘disagreed’ and
17.3 per cent ‘strongly disagreed’. On the other hand, over 30 per cent
‘somewhat agreed’, while only 12.1 per cent ‘strongly agreed’. Of these
villagers, 9.1 per cent selected ‘don’t know’.14
A second question showed that villagers strongly believe they have
the right to send petitions to upper levels, an act that reflects a
reliance on informal or alternative democracy. In response to the
statement: ‘If villagers disagree with local policies, they have the
right to send accusatory petitions to higher levels’, over 80 per cent
‘strongly agreed’ (41.1 per cent) or ‘agreed somewhat’ (40.3 per
cent), while only 6.4 per cent ‘disagreed’ and 2.4 per cent ‘disagreed
strongly’. Only 6.6 per cent of villagers had no opinion on this issue.
Finally, villagers strongly disagreed with the statement argument
often proposed by Chinese oligarchies that Chinese willingly accept
non-democratic politics so long as they can make money. Thus, in
response to the statement: ‘As long as the village economy shows
stable development, there is no need to raise the level of democracy’,
only 6.6 per cent ‘strongly agreed’, while 14.4 per cent ‘agreed some-
what’. Instead, 32.3 per cent ‘disagreed somewhat’, while 33.1 per
cent ‘strongly disagreed’. Finally, 10.3 per cent ‘didn’t know’.
Clearly, the oligarchs are mistaken.
By combining each person’s score for all six questions we were able to
give them an overall score in terms of a ‘democratic ideal’ and position
them on an anti- versus pro-democratic continuum (Figure 6.1). The
distribution of villager attitudes in Figure 6.1 shows a rather strong pro-
democratic tendency among these 120 villages, with very few villagers
possessed of anti-democratic value; moreover over 40 per cent had what
we might see as strong pro-democratic values, in that they took a
strongly democratic position on at least one of the six questions.15
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
–10 –9 –8 –7 –6 –5 –4 –3 –2 –1 0 1 2 3 4 5 6 7 8 9 10 11 12
Figure 6.1 The Distribution of Democratic Values in Rural China, 1999
Given that these villages were relatively poor with little industrializ-
ation, democratic consciousness seems to have emerged without
significant socio-economic development.
We also asked people about their level of attention to politics and
public affairs. The data shows that people are interested in state affairs,
with 21.4 per cent being ‘very interested’ and another 51.5 per cent being
‘relatively interested’. Similarly, over 50 per cent had engaged not infre-
quently in some form of discussion on economic and political affairs in
the last month, although the amount of discussions seems to be less than
would be expected from the asserted level of interest in state affairs.
Finally, many in this group may be illiterate or simply do not read news-
papers much, relying on the radio for their political information.
What did people actually think about the democratic practise in
rural China? Was it perceived as legitimate? Again, we found strong
support for free and fair elections. In response to the statement: ‘If
your current cadres have good leadership ability and the people’s
confidence, then we do not need elections’ – over 55 per cent ‘did not
agree much’ or ‘totally disagreed’. Only 23.9 per cent ‘agreed some-
what’ while only 12.4 per cent ‘totally agreed’. Thus the assertion that
Chinese people prefer order and economic development to democracy
may not hold true in these localities.
Political structure: the institutional framework for ‘village

democracy’
Village democracy was introduced step-by-step, based on draft regula-

tions passed by the National People’s Congress in 1987. At that time
David Zweig 129
‘demonstration villages’ were set up in about 35 counties. In the

13 years since 1987, almost all provinces in China have introduced
their own regulations, while the central government has further
codified this grassroots phenomenon. Estimates vary, but today
perhaps as many as 40 per cent of villages in rural China employ secret
ballot, multiple candidate elections to choose the director, vice-
director, and members of the Village Committee – committees are
comprised of five to seven members in total. Villages have also been
called on to draft ‘village charters’, which commit the elected represen-
tatives to run village affairs democratically or face recall, and have been
directed to open their books to their citizens by posting them on
public billboards. The goal is to decrease corruption and increase
public confidence in the elected officials.
Nevertheless, some observers have suggested that despite the open-
ness of the electoral process, local CCP officials can control elections
by determining the candidates. However, in our localities, when vil-
lagers were asked: ‘What do you think of the CCP’s level of influence
over elections?’ – only 9.6 per cent saw the party’s influence as ‘very
great’; 22.3 per cent saw the CCP having ‘a certain level of influence’;
22.3 per cent saw it having ‘not much influence’; while 20.6 per cent
saw it having ‘no influence’. Again, 21 per cent said that they ‘did not
know’. Even if we assume that those who selected ‘did not know’, did
so because they were afraid to say that they saw the CCP having
influence, 42.9 per cent still did not feel that the CCP had very much
influence.
Responses to a similar question verify these findings. We asked: ‘If a
ministry or bureau wants to control the election, they can do so by
controlling the selection of candidates’. The responses were as follows:
‘Totally agree’ – 6.5 per cent; ‘relatively agree’ – 18.4 per cent; ‘don’t
agree much’ – 20.9 per cent; ‘totally disagree’ – 20.4 per cent; ‘don’t
know’ – 27.1 per cent. Again we find about 41 per cent feeling that
outside or local established political forces cannot really control the
selection of candidates or the outcomes of elections.
The National People’s Congress, China’s legislature, has enshrined a
key reform to the electoral process by introducing ‘hai xuan’, or ‘select-
ing candidates from the sea’, which in 1999 as the only legal mode of
candidate selection, further weakened the local authority’s ability to
manipulate outcomes. Under this system, villagers meet together and
can nominate any person in the village who possess their democratic
rights. Through a series of public elections, people who get the largest
numbers of votes in each public polling are allowed to continue until
two or three leading candidates remain in the contest. These two or

three candidates then run for public office.
Among the villages we surveyed, 19.7 per cent of villagers reported
that their village used this method in the most recent election, 17 per
cent reported that villagers in their village directly nominated the
candidates, while another 4.9 per cent reported that a small group of
villagers collectively nominated their candidates. These choices, plus
self-nomination (0.6 per cent of cases), suggest that over 42 per cent
of villagers partook in a relatively democratic process for selecting
candidates. On the other hand, if one sees nominations by various
local organizations, including the party secretary, the local election
committee, or the Villager Assembly, as inherently non-democratic,
then 36 per cent of villagers participated in more non-democratic
procedures.
In terms of other democratic measures, 79.3 per cent of villagers
reported that they had voted in the most recent election and had
done so by secret ballot. Also, 69.6 per cent of villagers reported multi-
candidate elections, while only 11.3 per cent reported that there had
not been more than one candidate. Still, only 22.4 per cent reported
that their village had allowed candidates to speak publicly before the
election, while 57.8 per cent reported that they had not. Finally,
villagers felt that the elections in their village were becoming more
democratic, with 17.6 per cent feeling that they were not ‘more fair’
than before, while 41.3 per cent felt that elections in their community
were ‘a little more fair’. Finally, a rather large percentage (13.1 per
cent) nominated candidates or encouraged others to vote (20.6 per
cent). These data suggest a rather robust local political climate relating
to this form of formal democracy. The voting rate is high at 79.3 per
cent, while the percent of people who did not participate at all was
low, at only 10 per cent.
Yet, even when villagers freely nominate their own candidates, a
form of anticipated reaction may be at work here, if villagers select
people whom they believe will be acceptable to the local party officials
and do not select people who oppose CCP rule or are at odds with the
local party officials. Thus when asked to respond to the statement:
‘people who do not carry out the state’s policies are not allowed to run
for office and hold power’, 31.1 per cent ‘strongly agreed’ and 28.9 per
cent ‘agreed somewhat’, while only 26.1 per cent ‘did not agree much’
or ‘did not agree at all’. More importantly when asked, ‘who should be
elected’ for office – and people were allowed to select more than one
choice – the largest number of people, 60.3 per cent, selected ‘people
David Zweig 131
who keep close ties to the party’. Clearly, villagers recognize that the
CCP is the most important organization in rural China and a major
channel through which the state distributes resources. Consequently
villagers benefit when their leaders have good party ties. Yet, people are
not keen on electing current village leaders – selected by only 16.8 per
cent – probably because they are perceived as being corrupt. Villagers
also want people with high cultural values (54.9 per cent), but not
necessarily people with high social status (6.8 per cent) or business
leadership (7.3 per cent).
Alternative forms of political action in rural China
Other than election related activities, what other forms of political

activity occurred in these villages? To assess this issue, we asked two
questions. First, we asked the following hypothetical question: ‘If you
heard that village cadres were considering carrying out what you con-
sidered to be inappropriate policies, what would you do?’ The
responses show that over 30 per cent of villagers people believe they
would speak their mind and directly confront the local officials. They
also show a willingness to work with others to solve these problems.
Yet cynicism is also strong, as 37.6 per cent did not want to get
involved or felt that doing so would be of no use.
But what had they done in real life? To assess this fact, we asked people
to select from a list the main problems they confronted in their day-to-
day lives and then asked whether they had done anything to solve those
problems. Of 2637 people interviewed, 441 (16.7 per cent) said that they
had done something to solve their problem, taking part in 739 different
types of actions. First, while the Village Committee and its leaders were
directly elected by villagers, only 20 per cent of their responses involved
approaching them for help when problems arose, while over 30 per cent
involved approaching the local Communist Party committee or its
members. Second, villagers in our four counties rarely engaged in protest,
as public assemblies or protests combined only 2 per cent of the behav-
iours adopted.16 Third, a very common strategy – and a key part of the
informal democracy in rural China – is to contact higher-level officials
directly. Villagers often see local officials as highly corrupt, while they see
higher-level officials at the province or above, as less corrupt and
amenable to solving problems; therefore villagers may prefer to petition
upward depending on the problem. Thus, 237 or 44.3 per cent of the
responses involved going over the heads of local officials and petitioning
higher levels to get involved.
Finally, what is the relationship between elections and democratic

structures on village stability? Elections do build support for the regime
and its policies. When asked if people support government policies
because of elections, 23.2 per cent ‘strongly agreed’, and 42.8 per cent
‘agreed somewhat’. Only 3.9 per cent ‘totally disagreed’. When asked a
close-ended question about why former officials were not re-elected,
the main reason suggested was a lack of leadership ability (28.5 per
cent), followed by corruption (15.3 per cent), being unfair in their deci-
sion making – ban shi bu gong – (14.3 per cent), and an inability to
develop the local economy (11 per cent). Thus people truly saw leader-
ship ability as an important factor affecting electoral outcomes, not
party manipulation or personal relationships.
As for the direct relationship between democratic institutions and
village stability, 17.8 per cent said that elections greatly increased the
level of stability within the village, while 53 per cent thought it
brought some stability. Only 1.4 per cent of people thought that elec-
tions somewhat decreased the level of stability, with only 0.7 per cent
believing that it had significantly decreased stability in the village.
Because in each village we interviewed 20 randomly selected people,
we determine the general view within each village and use their
responses to create village-level measures.
Thus while we were not able to get good measures of social unrest in
the localities which we studied,17 reports from China suggest that
direct election of Village Committees has decreased villagers’ com-
plaints, largely because the establishment of such committees also led
to greater transparency in village finances. In Pingyuan Village,
Shandong Province, collective complaints and crimes were reduced by
21 per cent and 18 per cent respectively in 1997 due largely to the
more open political atmosphere in the village.
To assess this relationship we created a model based upon village
level data to explain why villages had experienced an increase in their
level of social stability over the past five years. The model employs
14 independent variables and explains 71 per cent of the variation in
the outcome variable (R2 = .711) – villager perceptions of increased
stability. The two most outstanding independent variables were where
people perceived the ‘contract with cadres’ as useful – one of our key
democratic innovations – and whether individuals felt that ‘their
overall level of participation had increased in the previous five-ten
years’.18 Also, when we used ten years of stability as our dependent
variable, whether or not people perceived the elections as becoming
fairer was also an important factor.19
David Zweig 133
It is important to note that the CCP has itself sanctioned alternative

forms of ‘democratic’ activity beyond village elections in its drive to
limit social unrest and cadre corruption. Villagers are allowed to peti-
tion higher-level officials – in part because they inform the CCP about
local problems – and in 1990 it instituted the Administrative Litigation
Law, through which citizens can sue public officials. The success of
these measures, and this strategy of establishing alternative democratic
institutions, remains questionable. Rural protests remain widespread
and continue to threaten the regime’s stability (Bernstein 1998:
93–110).
But while the state has legitimized these alternative forms of political
behaviour, which reflect greater political liberalization and the institu-
tion of more open procedures, it has remained adamantly opposed to
the formation of autonomous NGOs and the emergence of civil society.
According to a report by Human Rights in China, the ‘Regulations on
the Registration and Management of Social Organizations’ introduced
in 1998 were even more comprehensive and controlling than similar
rules introduced after the 1989 Tiananmen crackdown. As we have seen
in its dealings with the Falun Gong religious movement, the Party/state
sees autonomous religious organizations as equally threatening and
seeks to crush them.
Conclusion
In this concluding section, I will deal with three general issues, two
raised by Dr. Rocamora in his chapter – the role of external forces in
promoting (or retarding) democracy, and the power of the ruling ol-
igarchy – and a third which focuses on the relationship between polit-
ical culture, political structure, and political development.
International pressure has contributed significantly to the form of
democracy – full, partial, or village – extant in all three Chinese soci-
eties, though the direction of influence varies across the three cases.
While foreign forces greatly affected democratic development in
Taiwan, and played a positive, albeit less important, role in the PRC,
external influences have by and large slowed the pace of democratiza-
tion in Hong Kong.
In the PRC, domestic advocates of village democracy consciously
played the ‘international card’ as part of their strategy to overcome
domestic opposition to village elections. They also needed financial
support for training, publications, overseas education, and for gaining
the attention of local governments throughout China. Foreign funding
from The Ford Foundation, the International Republican Institute, Asia

Foundation, United Nations Development Program, the Carter Center
for Democracy, the European Union, and other donor agencies, all
helped this home grown drive to promote ‘village democracy’.
Advocates of village elections in the central government used incent-
ives, in particular trips overseas to study how self-government and elec-
tions were implemented, as a way to pressure officials in the local
bureaus of the Ministry of Civil Affairs to introduce democratic prac-
tices in the villages in their county. In fact, Jimmy Carter helped bring
village elections to the attention of Party General Secretary Jiang
Zemin, whose recent support for village democracy has increased the
pressure on local officials to carry them out (Jakobsen 1999: 15). At the
same time, officials within China, including the top leaders, have come
to recognize the great public relations value of grassroots democracy in
the international realm. This newly found value has particular
significance vis-á-vis the United States, as it presents an otherwise
dismal record of political reform in a far more positive light.
For Taiwan, all observers agree that the loss of international status in
the 1970s, beginning with the loss of Taiwan’s UN seat and culminat-
ing in the breaking off of diplomatic relations with the US in 1979,
increased pressure on the KMT to ‘turn inward and to rely more on the
legitimating function of electoral institutions’ (Chu 1994: 103). As a
result of these external pressures, then president Chiang Ching-kuo
made the critical decision to lift martial law and institute widespread
democratic reforms. Also fear of international condemnation made it
harder for the KMT to crack down on elected officials who became
opponents of the regime in the early 1980s. Therefore, contrary to
analyses of the World Systems approach, Shiao argues that the assim-
ilation of Taiwan into the world capitalist system was a positive force
for the emergence of civil society as it reinforced society’s capacity to
resist state domination (Shiao 1999: 113). Finally, Taiwan’s effort to
position itself in a positive light vis-á-vis the continuing authoritarian
regime on the mainland, further propelled it to adopt democratic
structures.
Yet international pressure is most significant in the case of Hong
Kong. First, in 1987, the British ignored popular demands for demo-
cracy and postponed political reform, by doctoring the findings of its
own survey, which contrary to the public pronouncements, actually
showed strong support for political change. Then China, through its
control over the committee establishing the constitutional arrange-
ment that would govern Hong Kong after the 1997 reversion, created a
David Zweig 135
legislature with minimal authority and instead vested almost all polit-
ical power in the post of Chief Executive, whom they then proceeded
to hand-pick.
As for the issue of local oligarchies, the dominance of local elites in
Philippine politics is mirrored in both Taiwan and the PRC. Yet par-
ticularly in Taiwan, electoral politics allowed for the emergence of new
local elites in the 1970s and 1980s that challenged the dominant local
factions. Ironically, in the 1990s, their economic power has allowed
these local oligarchs to reassert their influence over an increasingly
competitive and expensive democratic process. However, while Filipinos
elected a president, who reinforced the tendency towards cronyism in
Philippine politics, popular demands for political reform and an end to
‘black money politics’ helped Chen Shui-bian defeat the KMT candidate
in the presidential elections of March 2000. His challenge now is
to reform the political system and undermine the authority of local
oligarchs.
In China, while ‘village democracy’ has taken root, there is little sign
that it is challenging the local power structure. Villages in my survey
selected candidates who were acceptable to the local party elite or were
the party elite. Local cadre corruption at the township and county
level, remains rampant and beyond the reach of village democracy. As
a result, villagers must turn to alternative forms of democracy. They
have many other choices besides democratic choices including flight,
violence, and so on, particularly petitions to higher level officials, or
illegal local organizations, if they wish to solve their problems.
Finally, the rule of the oligarchs seems secure in Hong Kong. Due to
their dominance of the functional constituencies and the Election
Committee, which still comprise over 60 per cent of the seats in Legco,
they can prevent serious political and economic reforms that challenge
their dominance. Also the business elite holds all but one seat on the
Executive Committee, which advises the Chief Executive. Having suc-
cessfully transferred their political allegiances from the British to
Beijing, the business elite of Hong Kong has utilized this alliance, and
Beijing’s desire for stability and economic growth in Hong Kong,
to protect is own economic and political position. Thus, pro-worker
legislation passed on the eve of the handover was overturned after
July 1997.
Lastly, what does the perspective espoused in this paper suggest
about the future of democracy and political development in these
three societies? First, relatively high levels of political consciousness in
all three societies, despite different political structures, means that the
available structures and structural reform, rather than socio-economic

development or modernization, are the critical variables that will deter-
mine each society’s political future. Thus China may not need further
changes in people’s values before it is ready for a democratic transition.
In fact, on the eve of democratization, mass culture in Taiwan was
more authoritarian than the political culture today on the Chinese
mainland; therefore, there is little reason to believe that the political
culture on the mainland is a deterrent to democratic breakthrough (Shi
2000). While Shi may argue that the key to democratic development
lies with the values and attitudes of the ruling elite, as Chiang Ching-
kuo’s role in Taiwan shows, the experience of Taiwan also suggests an
alternative source of democratization, the experience of electoral pol-
itics itself. Thus the PRC may have indeed opened the genie of demo-
cratic transition by instituting ‘village democracy’.
Indeed the willingness of the KMT to use elections to co-opt local
elites and legitimize the KMT’s authoritarian rule had major implica-
tions for the democratic process in Taiwan. According to Chu,
Elections became the institution in which the local political elite

found their self-identity and on which the entire local power struc-
ture, rested. Increasingly, the national ruling elite found out not
only that they could not do without elections, but that they had to
deal with the rising pressure from both inside and outside the party
for electoral openings at a higher level (Chu 1994).
Moreover, as discussed above, Hu strongly believes that elections them-

selves fostered democratic practice and democratic consciousness
within the entire population (Hu 1999).
Interestingly, Peng Zhen, a member of China’s old guard who
strongly supported village democracy in the late-1980s, argued the
same for the mainland back in the 1940s. In a 1941 report, he wrote
that ‘if we conduct popular elections, we should seriously follow demo-
cratic principles and the spirit of rule of law in doing so… This will
enable the majority of people to understand, from their own personal
lives, that democratic politics is far better than authoritarian politics’
(Li & O’Brien 1999: 131).
The case of Hong Kong probably supports this argument as well, in
that the political reforms introduced by Governor Patten in the early
1990s appear to have taught Hong Kongers the value of democracy and
energized them to want to participate. Yet it is precisely in Hong Kong
where we may find the greatest mismatch between levels of democratic
David Zweig 137
consciousness and the established political structures. While Hong

Kongers are strong supporters of democracy, their political structures
may be the least democratic of all three countries, in that in village
democracy the elected representatives do have direct control over the
funding for village programs. If the elites in Hong Kong do not
respond to this incongruity, by speeding up the process of democrati-
zation, one of two possibilities is likely. First, cynicism could set in,
and rather than ‘partial democracy’ transforming into full democracy,
as it did in Taiwan, citizens might give up on the formal political
process entirely. However, if they do so, they may turn instead to large-
scale protests, resulting in increasing political instability.
Notes
1 Funding for the research on rural China embodied in this paper came from
a grant from the United States Institute for Peace, Washington, DC.
Research assistance by Ms. Zhang Lijuan was funded by the Division of
Social Science, Hong Kong University of Science and Technology. Special
thanks to Ms. Chung Siu Fung, my irreplaceable assistant and advisor, who
managed the data from the USIP survey and found some of the data on
Hong Kong and Taiwan used in this paper. Please note that an earlier
version of this study was published by the US Institute of Peace as an occa-
sional paper.
2 Hu (1993), citing McClosky, suggests that a 75 per cent threshold is necessary
to argue that a certain level of culture has become the national consensus.
3 Part of the change in articulated values may have been due to the greater
freedom of expression felt by Taiwanese after the lifting of martial law, rather
than changes in their real attitudes. Under martial law, they may have simply
been afraid to express those views. Thanks to William Tabb, who pointed this
out during the discussion of my paper during the conference.
4 Utilizing the same data set, Shi Tianjian came to the same conclusion. See
Shi 2000.
5 Personal communication with the author, 22 July 2000.
6 For the concept of ‘restricted democracy’, see So 1999: 254. For the idea of
‘partial democracy’, see Lau 2000.
7 Of this missing 10 per cent, 23 had cut their viewing to 1–3 hours/week,
while 13 were still viewing television 4–6 hours a week.
8 The change in values for these two different periods was statistically
significant at the .05 level.
9 Unlike the passage of a government bill, which requires a simple majority
of the legislators present, the passage of a private member’s bill entails the
division of the legislature into two sections: legislators returned by func-
tional constituencies and those returned by geographical constituencies,
with majority support in both sections. The Chief Executive can also veto
private member’s bills, which must be overturned with a 23 majority.
10 In the run-up to the September 2000 elections for Legco, the largest Hong
Kong conglomerates are creating dozens of new companies solely for
the purpose of increasing their ballot rights in the functional constituency

elections.
11 In both cases, probability measures show that these declines are statistically
at the .00 level.
12 In early 2000, a series of articles in the local press, penned by members of the
political oligarchy, particularly Peter Woo, asserted that Hong Kong people
were not ready for full democracy. One reason was that people who did not
pay taxes should not have the right to vote, and since 23 of Hong Kongers did
not pay taxes, the functional constituencies should be maintained.
13 We interviewed 2,637 villagers from 120 villages in four countries, two each
in Anhui and Heilongjiang provinces.
14 Selecting ‘don’t know’ is an extremely common choice in surveys in the
PRC. In many cases it may really express a particular attitude. For a discus-
sion of this point, see Jennings (2000).
15 To get a score of 7 or more, one had to get a +2 on at least one question.
16 In this sample survey, Li Lianjiang also found that only 2 per cent of vil-
lagers across China reported being involved in some form of social protest
activity. Personal communication with the author.
17 We were not able to get information on numbers of protests, collective
resistance, or other forms of public action, as only the police have this type
of data. Therefore, it has not been easy to demonstrate a direct causal rela-
tionship between democracy and the level of political unrest.
18 The standardized coefficient for these two variables, which reflect the
strength of the relationship, were .471 and .442 respectively, and both were
significant at the .000 level.
19 The standardized coefficient was .179 and p > .004.
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7
From Victimized Communities to
Movement Powers and Grassroots
Democracy: The Case of the
Assembly of the Poor
Suthy Prasartset
Introduction
This chapter intends to explain the process by which victimized com-

munities are transformed into powerful grassroots movements and
how in this process they are contributing to the emergence of grass-
roots democracy in Thai political context. The role of the Assembly of
the Poor (AOP) will be highlighted to illuminate our arguments. These
communities have suffered from the process of marginalization or
development aggression as a direct result of state’s growth-oriented
development policies during the last three decades. While most
peasant communities were displaced by state and corporate projects in
the name of development, some of them were participants in failing
state-sponsored agricultural projects in partnership with corporate
sector. With more open political opportunities since the mid-1980s,
they started to organize into local groups to assert their rights and
demand state compensations. Such a situation brought about numer-
ous protest rallies at local level in various parts of the country. These
local movements later aligned themselves into provincial and regional
groups and networks. Confronting difficulties in pressing their
demands on the state, leaders of these diverse movements learned to
achieve political synergy by combining their struggles into one
national network (AOP) to coordinate their activities.
Their struggles at various levels have contributed to the making of
grassroots democracy and the strengthening of civil society. As their
plight was unattended by the existing representative democratic
system, direct actions towards the state had to be taken to assert their
rights and press their demands for corrective action. Their struggle is
140
Suthy Prasartset 141
indicative of a change in the nature of Thai politics both in pressing

for grassroots demands for direct state corrective actions and grassroots
participation in some areas of policy issues, involving legal and institu-
tional changes, their implementation and monitoring of results.
Although the latter aspect is still at an incipient state; this is an area
where grassroots and other civic organizations seek to ally in their
struggle for a better society and are building on the 1997 Constitution
which both took active part in drafting.
In the following sections we will discuss the structural factors in the
activation of grassroots movements; the rise of the Assembly of the
Poor (AOP) and its goals; AOP’s organization, strategies and tactics
and the counter-movement of the state; as well as the outcome of the
movement and the problems faced by it. The last two sections
will present some brief case reports of the struggle followed by the
concluding section.
Socio-economic causes of the activation of the grassroots

movement
The emergence of grassroots movements in Thailand in recent years

results from Thai state’s neoliberal development policies, with attend-
ant processes of polarized development: concentration of income and
wealth on the one hand, and marginalization (social exclusion) of
the majority of population on the other. This can be testified by
high income inequality. In 1992, inequality of per capita welfare in
Thailand reached its peak, showing the Gini index, the most widely
used measure of inequality, at 49.9. In this year, the top 20 per cent of
the households commanded a major share of per capita welfare of
55.6 per cent. The share of the poorest or those in the bottom 20 per
cent was a paltry 4.5 per cent. Considering the poor in general (those
in the bottom 40 per cent), their share was only 12.4 per cent and
compared unfavourably to the share of 14.2 per cent in 1988 (NESDB
1999: 5). Although several studies point to a decline in the share of
population under the poverty line, from 17.9 million people in 1988 to
7.9 in 1998, it is noticeable that the so-called poverty line was defined
rather low, being a per capita monthly income of 473 baht in 1988 and
991 baht in 1998 (NESDB 1999: 2). Such a definition tends to show a
smaller proportion of population under the poverty line.
The study also pointed out that inequality in Thailand had been
‘increasing monotonically since mid-1970s. This has resulted in
Thailand having the highest inequality in the East-Asian region’
142 Victimized Communities to Movement Powers
(NESDB 1999: 6). This testifies to the fact that the process of marginal-
ization had occurred in Thailand for almost a quarter of a century. As
the criteria to determine the poverty line is debatable, we can safely
state that more than ten million people, both rural and urban poor,
constitute the great majority of the poor in Thailand, who were mar-
ginalized by the urban-biased state’s development policy during the
last three decades. Although, it was reported that inequality has
declined somewhat since 1992, the recent economic crisis since mid-
1997 has caused a reversal in this trend (NESDB 1999). The past devel-
opment efforts of the Thai state, while succeeding in the improvement
of the productive forces, created big business groups with a concom-
itant rise of the ‘middle class’. It has also resulted in a high degree of
social marginalization with the resultant socially and politically
excluded classes, especially participants of the Assembly of the Poor
(AOP). The former aspect can be conceived of as ‘development success’,
the latter as ‘development aggression’ or in some specific cases, ‘acts of
state terrorism’. The marginalized social groups are ‘victims’ of the
same process, which has brought about ‘development success’. By
‘development aggression’, the AOP implies a process of development
that displaces, marginalizes, impoverishes the people and destroys
their communities. They were made involuntary sacrificers in the
name of development for ‘the nation’. More often, measures to evacu-
ate these people and communities were in direct violation of their
basic human rights, in some cases involving what amounted to ‘acts of
state terrorism’. In the following, we will briefly discuss state and cor-
porate projects affecting rural communities.
Government projects, comprising dams, reservoirs, highways, air-
ports, industrial estates, new provincial government centers, etc. dis-
place countless numbers of peasant farmers and rural as well as certain
urban communities. In agriculture, state promotion of new crops and
livestock that did not bear fruit caused great debt burdens for the
farmers involved. Also, the state’s promotion of prawn farming for
export has destroyed mangrove forests and the coastal ecosystem,
resulting in the destruction of livelihood of small coastal fisherfolks.
In the manufacturing industries, the promotion of industrial
estates has caused dislocation of farmers and destruction of their
communities, families and culture. Inadequate labour protection has
resulted in poor health and safety standards. Likewise, low environ-
mental standards and lack of enforcement has also brought about
severe pollution to the neighbourhood. In many areas, chemical and
toxic substances affect canals, rivers and lakes. Government initi-
atives of building new provincial centers has also caused countless

cases of forced eviction of peasants from their farms and communities.
In the service industry, the state promotion of the tourist industry,
tourist resorts and golf courses has produced similar environmental
impacts as mentioned above. In addition, the service industry lies at
the root of severe social problems, such as child prostitution and the
rapid spread of AIDS. Impacts of the corporate sector can be clearly
seen in the agribusiness projects, most notably Eucalyptus plantations
which require acquisition of vast tracts of land, hence the peasant land
owners are forced out through diverse means.
There are various polluting activities from the corporate sector, for
example pulp-making plants with Eucalyptus plantations. Salt-mining
to supply the caustic soda industry pollutes rivers and paddy fields
with saline water, destroying the peasant’s life support system. Stone
quarrying to supply growing urban construction and other infrastruc-
ture projects are also environmentally hazardous. All these activities
can be seen as state and corporate ‘aggression’ that snatches away com-
munities’ resources, destroys people’s livelihood, and calls for sacrifice
for the ‘nation’, all in the name of development.
These activities resulted in a great upsurge in the demand for land,
and waves of land speculation, all over the country since 1987 and
until the recent great crisis. Although there were voluntary sales of
farmlands, there were also countless cases of forced selling and eviction
of the peasant farmers from their lands, usually with violence. The
Thai state, on its part, declared, ex post, several vast tracts of land as
forest reserves, animal and plant conservation areas, and national
parks. Although peasant farmers had been settled in such lands for
more than one generation, their rights were not taken into account. As
a result, there were approximately one million families living in the so-
called forest reserves and national parks. The incidence of such forced
evictions has been increasing markedly (Prasartset 1996). Forced evic-
tion by both the state and corporate sectors to acquire lands for
profitable activities was met with strong resistance from the rural com-
munities and this has formed a strong base for the activation of grass-
roots movements.
Political opportunity structure and activation of grassroots

movement
Thailand has the experience of a long period of authoritarian rule. The

first wave of the activation of grassroots movements occurred between
1973 to 1976, for a short period after the students’ movement led to
the overthrow of a dictatorial regime. During these three years, the
peasants and workers in alliance with student activists organized
several demonstrations and protest rallies to voice their grievances and
demands for state action to redress their problems. Several trade unions
and farmers’ organizations were established. The now defunct Farmers’
Federation of Thailand was established in 19 November 1974 and it
operated in 41 provinces with the participation of 1.5 million families.
Their demands included reduction in rents and a rent control law, a
state land reform program, alleviation of farmers’ indebtedness, can-
celling of construction projects which caused hardship for the people
and adequate and fair compensation for them to buy new plots of land
in the vicinity with similar size and quality, etc. (ESG-TU 1979). This
last demand is similar to those put up in the recent struggles by
farmers affected by government projects. In the forefront of the open
struggles was samprasarn or a three way alliance comprising of workers,
peasants and students.
However, this brief democratic period was followed by the October 6
military coup in 1976. With activation of the samprasarn, the right-
wing groups also organized a counter-movement to confront mass
organizations. Several worker and farmer leaders were assassinated in
this confrontation during months before the coup. The extreme right-
wing suppression of mass activities had driven countless numbers of
students, farmers, workers and social activists to flee to the jungle, and
this had given the Communist Party of Thailand (CPT) an unpreced-
ented boost in its ‘revolutionary struggle’ in the late 1970s.
To contain this thriving underground movement led by the CPT, the
ruling power blocs decided to carry out a certain degree of political lib-
eralization, by crafting a new Constitution, giving rise to what might
have been called a semi-democratic regime. This particular regime type
was characterized by a sharing of power between the military and busi-
ness groups through the latter’s influence and control of political
parties. By this political arrangement, the military was in direct control
of the appointed Senate and the political parties were left to con-
test among themselves for the control of the Lower House in the
national election. In spite of the rising political role of business groups,
technocrats were given a prominent role in policy formulation
(Samudavanija 1995). The press and other mass media were also given
more freedom although some restrictive clauses had been maintained.
Since early 1980, under the eight-year rule of Prime Minister
(General) Prem who was supported by shifting coalitions of political
parties, the popular sector started to regain some degree of political

opening, where backlog of their complaints and grievances started to
spur an increasing number of protest activities (Prapas Pintoptang
1998: 121) which demonstrated that during a period of more open
political space, the frequency of protests and rallies increased sharply.
According to his tally, in 1967 when Thailand was under full sway of
the military regime, there were only 2 cases of protest rallies reported.
By contrast, during 1975/76 with the military overthrown by a mass
uprising led by student movements, the number rose to 153. This
dropped to 42 during a brief return of extreme right-wing government.
With a renewed political liberalization under the so-called semi-
democratic regime, the number of popular protest activities had con-
sistently increased from 61 in 1982 and continued to reach 170 in
1990. In the 1990s, with a higher degree of democratization of Thai
politics, the number of various forms of protests and demonstrations
grew sharply, topping 739 in 1994 followed by a surge to 1,200 in 1997
(Pintoptang 1998: 121). Thus, we can say that the 1990s was a period
of mass mobilization and activation of grassroots movement in
Thailand. Such a process was further spurred by a political system that
did not function to serve popular demands.
Dysfunction of the political system
Being marginalized, the poor people often lack an effective channel of

interest representation. After the parliamentary election had been
established, the popular sector had pinned their hope on the political
parties to solve their problems. However, from a few years of their
experience with this new political institution, their expectation came
to naught. The political as a mediating structure between the state and
the popular sector has increasingly been delegitimized by its involve-
ment in money politics, internal power struggles, and incapacity to
serve its own constituencies, and so on.
Political parties are mainly under the influence of business groups.
They tend to ignore people’s problems and grievances. In general, we can
say that there is a weak state capacity to force the bureaucracy to imple-
ment its programs for the poor. As a consequence, the marginalized
people, both urban and rural, increasingly feel that elections do not serve
their interests. They have to rely on their own efforts to get organized to
stake their claims on the state, to defend or to advance their rights.
In most South and Southeast Asian countries, including Thailand,
fairly similar socio-political factors contributed to the rise of social
movements in a more or less similar manner. Economic growth has

become stagnant, the state has lost its ability to meet popular expecta-
tions, and the process of development has continued to marginalize
the poor. More importantly, as Kothari suggests, democracy has
become ‘the playground for growing corruption, criminalization,
repression and intimidation for large masses of the people whose very
survival is made to depend on their staying out of the political process
and whose desperate economic state incapacitates them from entering
the regular economic process as well’ (Kothari 1988: 41). In Thailand,
as Nithi Eowsriwong argues, ‘the democracy we are familiar with …
is the forum for the bargaining [interests representation] among the
powerful or those in advantageous positions in society. Thai democ-
racy is the forum for bargaining among financiers and industrialists; it
is not the forum for bargaining of the small farmers, the slum people
or the aids patients’ (Eowsriwong 2000: 1–2).
In response to state oppression and hopelessness in formal political
institutions, people are looking for alternatives. They are making
efforts to organize themselves into social movements to demand
justice, freedom and equality (Nunez 1989). This is how a diversity of
social movements have sprung up to challenge the established struc-
ture of exploitation in spite of the limited political space and severe
repression in some cases. These emerging social movements can be
viewed as autonomous (non-party) political formations. By their very
nature, these movements represent an alternative political space that
can be used as an effective instrument against injustice and oppression
(Kothari 1983). When the so-called representative democracy does not
function for the masses, they will surely take direct political action and
press their demands on the state for active participation in political
decisions affecting their livelihood and bio-system as well as gender
relations via diverse forms of social movements.
The rise of the Assembly of the Poor
With a continuing open political space since the late 1980s, a diversity
of protest movements have sprung up to challenge the established
structure of domination and exploitation. As export-oriented economic
growth of Thailand continued strongly in these years, vast tracts of
farmland in the countryside were transformed into industrial estates,
tourist resorts, golf courses and Eucalyptus plantations and other agri-
business projects. This process amounted to a national resource conflict
as it caused a rapid collapse of rural communities by large-scale evic-
tion of farmers from their lands, often with violation of human rights
(Prasartset 1996: 5–6; Thabchumpon 1997: 35–36). Under an open
political space, such a situation brought about numerous protest rallies
at the local level in various parts of the country.
Around 1990, there emerged several loosely organized protest groups
in local communities affected by state and corporate projects, demand-
ing government price support for certain farm products (for example,
pigs, tapioca) and compensation for the losses incurred by government-
promoted programs (for example, cashew planting and cattle-raising).
These local community movements later organized themselves into
provincial and regional networks.
Establishment of the Small Farmers Assembly of the Northeast
(SFAN) in March 1992 was a major landmark in the struggle of contem-
porary farmers. It can be seen also as a precursor to the AOP in uniting
diverse struggles under one banner. Several independent groups of
farmers suffering from different problems in the Northeast staged sep-
arate prolonged protests in several provincial towns. In the process,
leaders of these groups came into close contact with each other,
paying solidarity visits, exchanging information and comparing experi-
ences of struggle. They had learned from their concrete experiences
that by acting separately as was their way, their bargaining power was
rather weak in pressing their demands on the state. So, after several
rounds of joint discussions regarding the nature and structure of a
regional network, they decided to establish SFAN to put up a united
front to coordinate their movements in a forceful way. In this way,
they became aware of what might be termed as the benefits of ‘political
synergy’.
From 1992 to 1995, SFAN led several protest rallies, including long
marches from the Northeast towards Bangkok. It united several com-
munities affected by the following problems: low farm prices; failed
government-sponsored projects; dam projects; and land rights and
forests. In March, SFAN along with other NGOs and allied group cam-
paigned against a draft government bill to set up a national agricultural
council as it did not truly represent the voice of the poor farmers.
In mid-1992, SFAN, other farmers groups in the Northeast and allied
groups, including NGOs, students and teachers organizations, united
their campaign against the so-called Land Allocation Scheme for the
Poor (Khor-jor-khor), organized by a military internal security office.
This scheme, even in its early phase, had displaced several thousand
farmer families from their villages and communities. To focus on the
land right and forest issues, they decided to establish the Northeast
Farmers’ Assembly for Land Rights and Recovery of Natural Resources

(NFA) for the final and crucial negotiation with the Anan care-taker
government, which eventually agreed to abolish the project on the
3rd July of 1992. (Thabchumpol & Supsomboon 1997: 74–76)
Similarity of problems, different from those involving SFAN, encour-
aged other groups to form issue-based networks to achieve ‘political
synergy’ in the manner mentioned above. These include the land
rights and forest network (NFA), dam network, alternative agriculture
network and the urban poor network. In addition, worker-patients who
suffered from health hazards at workplaces in different locations joined
together to form an assembly of worker-patients affected by industrial
hazards.
Each of these issue-based networks had organized several protest
rallies and negotiations to defend or advance their rights, with varying
degrees of success. However, up to a point leaders of these movements
became aware of their own limits in pressing their demands further,
especially those involving large sums of money and policy and legal
changes, to facilitate fair settlement of their problems, e.g. land rights,
community rights to local resources, habitats for urban poor, com-
pensation for those affected by dams constructed 30 years ago, etc. As
each issue-based network, acting alone, could not proceed further,
they reached a joint understanding to pool their efforts together to
form a national coordinating network in the name of Assembly of the
Poor (Smatcha Konjon).
In the words of Vanida Tantivithapital,1 an advisor of the AOP ‘The
idea to unify existing issue-based networks into the AOP was to achieve
full capacity to solve all our problems. To do so, it was necessary to
think about a common movement symbol in order to unite all issue-
based networks and also to solicit support and sympathy from the
general public. With the concept of the poor, they would be able to
explain our reasons why we were impoverished by pointing our fingers
to the state and corporate projects. In this way our constant struggles
and protest rallies can be understood and gain legitimacy’. In addition,
as Boonthan T. Veerawongse pointed out, the poor were victims of dis-
placement by several mega projects, which destroyed their communit-
ies and violated their human rights, therefore the issues of human
rights and rights to development for the poor naturally formed a
common aim in the establishment of the AOP.2 The poor are not only
vulnerable economically, but are also helpless in terms of their rights.
The AOP was established on 10th December, 1995, a symbolic day for
the Thailand, as Constitution Day, as well as International Human
Rights Day. Starting with a day of symposium on problems of the poor

and the violation of human rights at Thammasat University, the par-
ticipants moved on to Pakmool Dam, Khongjiam District, bordering on
Southern Laos, where they came up with the Pakmool Declaration on
the 15th December, 1995. After criticizing the state development pol-
icies that lay at the root of bankruptcy of the farmers, tragic industrial
hazards and dangerous working conditions for workers, environmental
destruction and violation of human rights, the statement proclaimed,
‘Development is a right. But it is meaningless unless it is grounded in
the international human rights framework. … Without the realization
of economic, social and cultural rights, development remains unsus-
tainable.’ The declaration also calls on all states to ‘Ensure the parti-
cipation of the people in decision-making at village, local, provincial
and national levels through more rapid decentralization, democratiza-
tion and a recognition of the role of peoples organizations and non-
governmental organizations’ (Asian Action 1995: 29–30).
The founding groups included representatives from several people’s
organizations (POs) and networks from Thailand; most of them were
issued-based networks mentioned above and SFAN, before a new
leadership took over. Foreign solidarity groups from six countries,
namely farmers’ organizations from Australia, Cambodia, India, Japan,
Malaysia and South Korea, also joined them. Their respective represent-
atives had endorsed the declaration.
AOP’s movement goals
According to one AOP document, the AOP ‘is a common platform of the
oppressed people who share the same faith. Almost all of them are
affected by a process of “development aggression” committed in the
name of “national development” imposed/manipulated by either the
state or private sector. The AOP is also a venue for mutual learning and
exchanges of ideas and experiences among the grassroots people towards
a resolution of their problems at both local and structural levels’
(Thabchumpon 1997: 37). As such, the AOP was launched to ‘pursue
their collective struggle for legitimate rights, and social justice’. Other
related goals, both immediate and long-term, include the struggle for
land rights for both rural and urban poor, communities’ customary rights
to resources management, upholding agriculture as a mainstay of the
Thai society, sustainable or alternative agriculture, people-centered devel-
opment policy, political reform including decentralization and the reform
of the bureaucracy, and participatory democracy or grassroots democracy.
It will be seen that the goals of AOP range from the demand for
immediate benefits, such as various rights relating to livelihood, to
demands which are beneficial to the society at large, such as, political
reform. The AOP contends that the rights of the local people, which
constitute basic human rights and form the foundation of political
rights, have been violated. Therefore, it proposed people’s participation
and customary rights as ‘a common goal for all peasantry in order to
uphold their rights, freedom, justice and peace in Thai society’
(Thabchumpon 1997: 37). In general, we can also say that AOP is
highly critical of the state’s growth-oriented development policies. As
the Pakmool Declaration puts it: ‘The people always become merely
the “commodity” or “raw materials” for the production process to feed
factories for the sake of “Economic Growth” and achieving “Newly
Industrialized” status from which ordinary people never benefit.’ As a
result, the AOP demanded: ‘the People must decide on the direction on
national development and their own future, and reaffirm that the
people must be the real beneficiaries of the development process’. The
poor must also participate in decision-making in development projects
that have a bearing on their lives. In addition, the AOP is emphatically
against mainstream agriculture, based on mono cropping and chemical
farming, so that it proposes alternative agriculture as a movement
goal.
For the grassroots people to take active part in deciding the direction of
national development and to be the beneficiary of development, major
structural reforms have to be undertaken. A political system based on par-
ticipatory democracy or grassroots democracy has to be instituted.
Realizing this fact, since its establishment, the AOP had been actively
involved in the process of political reform, in alliance with other social
forces. It took an active part in the drafting of the new Constitution (pro-
mulgated in October, 1997) by proposing several clauses related to the
above-mentioned goals. Based on their bitter experience with local
bureaucrats, AOP also campaigns strongly for the reform of bureaucracy
and decentralization and for the state to genuinely support civil and
political rights as well as human rights and cultural rights. AOP’s active
participation in these latter campaigns distinguishes it as a new social
movement. (Diani and Della Porta 1999: 11–13).
AOP’s organization
AOP is a coordinating network of several local and regional POs and

networks of people suffering from ‘development aggression’. While
some member organizations have been in existence for several years

before joining the AOP (for example, Slum Organizations for
Democracy), some others were established more recently (for example,
Network of Worker-Patients). The AOP is composed of 6 major net-
works on local issues, namely: people affected by the dam projects,
land and forest conflicts, government infrastructure projects, urban
poor, workers affected by industrial hazards, and alternative agricul-
ture. In addition, a network of southern small fisherfolk, having linked
activities with alternative agriculture network, has joined activities of
the AOP informally at most rallies since 1997. Each of the six major
networks has its own working committee with representatives of
various groups of local issues.
The supreme decision-making body of the AOP is the Conference
of Poh-Kruar-Yai, literally ‘the big chefs’, comprising core represent-
atives for each local issue. At the moment there are 121 formal
representatives from all six major networks of local issues. Each
major network holds its separate meeting to formulate solutions to
its problems and relevant policy proposals for negotiation with the
government. These resolutions and policy proposals are then sub-
mitted to the Conference of Poh-Kruar-Yai for final deliberation and
decision. The outcome of negotiation with the government is well
explained to the various groups of local issues and their critical
views are widely discussed. Through this process, we can see that the
AOP has adopted a collective leadership and decentralized decision-
making process.
In addition to the Poh-Kruar-Yai, there is the Conference of AOP
Advisors, comprising experienced people’s leaders, NGO workers and
some academics. The advisors play a supporting and facilitating role,
such as preparing documents and assisting in negotiations with the
government. In addition, they also play a key role in coordinating with
transborder allied groups and social movements.
A small secretariat office to coordinate all activities of the AOP is
assisted by an NGO, Friends of the People. The secretariat is involved
with three major functions: a) coordinating AOP movement activities
and following up with relevant government implementation; b) co-
ordinating policy and legal reform campaigning of the six AOP
networks; and c) general secretariat work, especially in resource mobil-
ization. During the movement activities of the AOP, the leaders of
various local issues are responsible for their own food supplies and
necessary expenses and to take care of the security of the compound
they occupy, which is usually done by a volunteer youth group.
It is interesting to look into how movement participants undertake

their struggle with self-reliant efforts. Before each prolonged protest
rally, usually from one month up to 100 days or more, leaders and
advisors of each network of local issues discuss with participants how
to prepare for the provisions and cash contribution. Usually in most
communities there are the so-called central funds, collected as an
agreed amount, say 200 baht per month per family, from the partici-
pants. In cases where participants do not have money to contribute,
they form a team to search for forest products (bamboo shoots, and so
on) and offer the proceeds to the central fund for movement activities
of the network.3 This self-reliant effort is also supplemented by dona-
tions from allied groups.
Since March 1999, AOP’s networks of people affected by dam con-
struction has built up several protest villages by squatting on a space
near the dams or in areas directly affected by the dams, in protest of
government negligence of their cases. Now there are seven such protest
villages. With such a prolonged struggle, a new strategy of self-reliance
is discussed and adopted by AOP participants. This new mode of self-
reliance in the struggle is referred to as ‘three-leg strategy’. According
to this strategy, a participant family is committed to undertake three
activities. One leg requires a person to take care of household activities.
Another leg requires a person to be responsible for income generation,
mostly as a worker in urban centers or plantations. The third leg calls
for one person to participate in activities of the protest village to keep
on the collective struggle and thereby maintain the family’s rights. It is
expected that this self-reliant and participatory strategy ensures that
the struggle will be strengthened, both in terms of the movement and
the family’s livelihood.4
The AOP also develops close relationship with several allied groups.
In some of its campaigns and protests, about 200 allied groups, com-
prising mostly NGOs, other mass organizations, students’ organizations,
pro-democracy groups and certain professional groups, notably lawyers
and teachers, supported the AOP. The AOP as a coordinating network
has developed a horizontal relationship among member organizations
or major networks of local issues. In this way, each member organiza-
tion maintains its own autonomy, seeking unity amidst diversity as one
advisor put it. In addition, the decision-making in general is based on
consensus, especially on the principles and ends of the movement.
Decisions regarding means may be based on majority votes. The idea of
forming the AOP into a coordinating network with flexible organiza-
tion and ‘collective leadership’ was to prevent the AOP from turning
into a vertical structure with top heavy leadership or charismatic

leaders. This was the case with the Farmers’ Federation of Thailand and
SFAN. Therefore, the position of the Secretary General had no place in
the AOP structure, which functions only as a coordinating network.
By combining their political resources such as organizational, cam-
paigning and negotiating skills, the AOP structure has been an em-
bodiment of the law of synergy, whereby interactions among its
constituent parts result in greater overall strength than the sum of all
its separate parts. As mentioned above, the motive for the formation of
the AOP was to devise an organization with enhanced political synergy.
This process amounts to what may be designated as ‘political innova-
tion’ on the part of the marginalized people and their allies in the
grassroots movements.
Strategy and tactics of movement
In its demands for state action to redress their problems and change
certain policies, the AOP has consistently resorted to a strategy of col-
lective mobilization supplemented by negotiations. In line with most
other social movements, AOP’s use of public protest gives it a distinct
character, as opposed to ‘conventional style of political participation’
(Diani & Della Porta 1999: 15–16). However, where appropriate, it also
resorts to lobbying politicians and relevant authorities. In most cases, it
either organizes a rally at relevant provincial cities and/or several
protest groups directly converge at the Government House and occupy
a rallying space nearby in order to press their demands, attract public
attention and start a negotiation process.
To maintain the legitimacy of the movement in all its activities, all
organizational members of the AOP are to act as autonomous social
movements, free from political partisanship, and adhere to the prin-
ciple of non-violence. In any mobilization, leadership must be careful
not to cause unnecessary public inconvenience. During the rally, press
conferences are called in order to explain to the public their specific
problems and how they suffered from state and corporate measures
and their demands and policy proposals. Seminar or round table dis-
cussions of people’s problems are also jointly organized with some aca-
demic institutions. Moreover, allied groups and networks lend a
helping hand by organizing a festival-cum-rally for public information
and fund-raising.
In carrying out a successful negotiation, it is important to negotiate
from strength. The most important thing is to ensure that the issues of
the struggle attain wider and sustained public interests (i.e. the move-
ment issues become ‘public issues’) so that the government is pressured
by the public into taking direct responsibility to solve the problem. The
presentation of the struggle through rituals and cultural symbols that
will relay a correct message of the people’s plights and sufferings to the
society at large, is highly instrumental for the purpose. To this end, it is
also essential to build up strong alliances within civil society, forming
into powerful allied networks. Their support could lend strong political
weight to the movement in its negotiations with the government
(Thabchumpol & Supsomboon 1999: 77).
In addition, the networks concerned must be well equipped with the
necessary information, media co-ordination, and certain forms of
lobbying and negotiating skills. Equally important is the command
of the logic of numbers, as numbers imply strength. There appears
to be a positive relationship between bargaining strength and the
number of people involved in the rally and its duration. As Vanida
Tantivithayapitak, an advisor of the AOP, put it:
If a few of us come here, we will only meet a security guard in front

of the Government House; 10–20 and we will meet a secretary of
Public Service Center; 100 or so, we will meet a secretary of a minis-
ter; If we come in a thousand, a deputy minister would come to see
us; if we are ten thousand strong, the Prime Minister would start a
negotiating table. If we want him to visit us here, we must come in
twenty thousands (as Quoted in Pintoptaeng 1998: 152).
Through their experiences in the struggle, AOP participants have con-

cluded that without the pressure of the protest rally, the government
and bureaucrats, both in Bangkok and in the provinces, tend to ignore
their demands. Even when the government agreed to solve certain
groups of problems as a result of prolonged mobilization, the imple-
mentation at a local level in most cases has to be speeded up by a
protest rally.
Counter-movement by the state
The Thai state is prone to maintaining the privileges of the dominant

power blocs, with a strong tendency to counter grassroots demands.
Before political opportunities opened up in the late 1980s, most
popular movements, such as farmers’ organizations and trade unions,
were either severely repressed or demobilized. In most cases the state
resorted to coercive force to suppress mass mobilization. Use of

violence against leaders of mass organizations was common. Such
repressive measures have rarely been used on a large scale in recent
times (except the May uprising in 1992).
With this backdrop of authoritarian tendency, the activation of grass-
roots movements in Thailand is bound to face opposition from the state
and established interest groups, although the brute use of force has
been used rarely except in remote provincial towns. Before finally yield-
ing to strong reasons as well as public pressure, state functionaries
usually deal with popular demands with delaying tactics by proposing
to set up committees to look into the matters. Very often, they under-
take smear campaigns in the media to delegitimize the movement’s
claims. State related media often conduct programs to misinform
the public about the true nature of grassroots’ demands. At the local
level, the participants’ family is often misinformed about the rally and
derogatory rumors are spread to delegitimize the movement. There are
also attempts to co-opt popular leaders by promising special benefits. A
tactic of divide-and-rule is often deployed to demobilize mass rallies.
In some cases, some yellow organizations are established, on an ad
hoc basis, to counter a particular protest rally through intimidation or
threat of force, to terminate the rally. For example, the pro-dam groups
often mobilize (or rather hire) their own supporters to rally against
people’s anti-dam campaigns. In some cases, this results in violent
clashes between the two groups, an event known as ‘mob-against-mob
tactics’. In other cases, arrest warrants are issued to leaders of the
protest movement in order to cause confusion among the rank and
file. Nowadays the direct use of force to disband the rally is rare.
However, where necessary the state functionaries tend to use the mob-
against-mob tactics.
Against all of these counter movements, movement organizers have
to find ways and means to survive these demobilizing tactics by
making the aim of the movement transparent and the rationale for
various demands clearly spelled out to the public. Proper coordination
with media and alliance building and networking with similar groups
in civil society are indispensable for a viable and fruitful struggle.
Movement outcome as movement power
There are four aspects of movement outcome, which can be justifiably

considered as movement power, which we want to emphasize as
follows. First, although a number of the AOP’s demands on the Thai
state have yet to be totally fulfilled, the AOP has achieved certain tan-
gible gains such as compensations for some groups in the network. It
also succeeded in reconfirming the rights of the displaced peasants to
return to their villages and make use of the disputed lands, pending
final decision by the government, which requires legal changes. In
addition, the AOP has also demanded certain institutional and legal
arrangements such as a revolving fund for retraining and adjustment
for new occupations and the establishment of workers’ health hazard
protection institute. Several draft acts have been proposed, for example
a community forest act, an act to protect local plant varieties and bio-
diversity, a slum development act, a rights to information act. etc.
These demands fall within a framework of policy advocacy activities to
be undertaken in alliance with other social movements. Hopefully,
these campaigns and struggles will confer long-lasting social benefits
for the popular sector in general.
Second is the activation of other social movements. As people suffer-
ing from state and corporate projects were shown the example of
AOP’s protest rallies on the media, both TV and newspapers, they also
started to form their own groups to struggle at local levels. Some of
these groups have come to join AOP or asked for advice from AOP. In a
sense, AOP activities have contributed to the emergence and mainten-
ance of other grassroots movements, an indispensable aspect of the
process of democratic consolidation in Thailand. AOP’s campaigning
in collaboration with other social movements has played a crucial role
in strengthening civil society in Thailand. Third, the movement activ-
ities of AOP and its organizational members have become a major
breeding ground for the rise of ‘organic intellectuals’ in the Gramscian
sense: the movement’s own intellectual leaders with political skills,
such skills in the analysis of political situations, in mobilization, in
the articulation of people’s problems and grievances, negotiation, and
so on.
Moreover, we can observe changes in the personal worldview of
individual participants in the AOP, from submissive and fatalistic
peasants to ones with self-confidence, assertiveness and self-reliance.
Their participation is the assertion of their own dignity. This writer
was informed by one advisor of the AOP that, now they wanted to
delete the phrase ‘we have … no honour nor prestige …’ from the
quotation at the beginning of this paper. Now AOP participants are
conscious of their personal honour and dignity as human beings. In
addition, they have discovered a collective identity: Smutch KonJon
or the Assembly of the Poor, comprising victims of state and cor-
porate projects. This can be seen from the fact that the peasants and
workers joining AOP are so proud of the organization that they are
not reluctant to reveal their association with it. The logo of AOP as a
symbol of collective identity is displayed in their houses. While a
few hundred AOP participants have assumed this new personality,
most of them are still at the beginning of such a process, which is a
potentially transformative experience.
Finally, as a direct consequence of the above processes, AOP has been
instrumental in the process of ‘political diffusion’, or the diffusion of
grassroots political activities. This is a process in which several experi-
enced local leaders are able to act as advisors or resource persons for
other groups of people suffering from devastating impacts of state and
corporate projects.
After some years of participation in protest movements with AOP or
in its member organization before joining AOP, both at local and
national levels, several local leaders managed to acquire the following
capabilities: systematic collection of relevant data; analysis of local
problems and formulation of a strategy of protest; preparation of docu-
ments and necessary evidence in support of particular demands; and
mobilization and negotiation with government officials. Equally impor-
tant is their ability to lead a local organization and social networks. In
fact, we can say that the local leaders manage to master what Tarrow
(1994: 19) calls ‘the modular repertoire’, or the collective action rou-
tines, which can be ‘employed across wide territories, broad social
sectors and for different kinds of issues’.
Such a repertoire of collective actions can be transferred to other
communities suffering from similar problems. Given the diffusion of
information through various kinds of media and even words of mouth,
activities of the AOP at the national and local levels have been brought
to the attention of the public, especially in the villages surrounding
those within the AOP network. Communities facing similar problems
turned to AOP leaders for advice to start their own protest movements
or, in some cases, to join the AOP network to address such important
local issues as land rights and community forests (Noparatvarakorn
1998: 148–156).
Some problems of AOP
Every movement has its own internal contradictions. The crucial point
is whether these will develop into severe antagonisms such that the
whole movement is in jeopardy. In spite of several achievements of the
AOP, it may be said that there are several problems that need to be
tackled collectively. The following are some of the problems:
Firstly as information about AOP as an active movement for the poor
has been disseminated via national media, several groups or com-
munities suffering from similar problems want to join. However, the
number of these groups is too large and beyond the capacity of the AOP
to manage, in terms of the experienced persons required to take charge
of all aspects of the new cases. At the moment there are some 30 such
groups not yet admitted into AOP’s formal structure but which are
allowed to attend relevant meeting as observers. Some of these came to
join the protest rallies with AOP. It seems that the AOP is reaching the
limit of allocation of movement activities to its key workers, especially to
its advisors and peasant leaders. However, this problem can be tackled
through the process of political technology transfer mentioned above.
Second is the issue of personality clashes among the core groups,
which often recurs. As of now, there are some cases of misunderstand-
ings that are not really conflicts among the core group. What is at issue
is not so much the competition for leadership as the problems of
working styles stemming from different political experiences. The fol-
lowing are some examples: firstly, some are more militant while others
are more compromising. While this type of difference in a certain situ-
ation may become a liability for the movement, some leaders consider
it an asset as different perspectives will counterbalance each other.
Secondly, there are differences regarding analysis of the situation per-
taining to a decision to launch protest mobilization and when to
demobilize and ‘return home with honour and victory’. Thirdly, mis-
understandings may occur regarding some persons in the core group
inadvertently joining a certain kind of activity in the name of AOP
instead of doing so in the name of their own organization or network.
Another important problem is that there is still a big gap in the
understanding of the linkages between local and structural problems,
between AOP advisors on the one hand and some peasant leaders and
participants on the other. This is a problem of micro-macro linkages
which presents itself to most movements. However, this problem is
expected to be gradually resolved in the process of the struggle when
peasants become disillusioned with law enforcement of local officials
and appreciate the need for campaigning for structural reform. A suc-
cessful case of this was the involvement of AOP participants in the dis-
cussions leading to the final draft of the community forest act. The
success was a result of their concrete understanding of the local experi-
ence. However, more efforts and consciousness-raising activities need
to be carried out regarding reform at structural levels and in AOP’s

trans-border solidarity works.
Judging from past activities, AOP has accumulated a lot of experi-
ence in what may be labeled as Ngarn-ron (literally meaning ‘hot
work’). This includes mobilization and organizing for protest rallies
and demonstrations to pressure the government into negotiation and
to demand fair compensation from state actions affecting the people,
as well as preventing certain environmentally destructive projects.
Such activities also involve coalition building and include campaign
activities in terms of advocacy with other social forces. The latter activ-
ities are naturally less of a Ngarn-ron, which involve continuous and
careful coalition building and lobbying.
It has been admitted among the core groups that they still lack the
capability to carry on the Ngarn-yen (‘cold work’), such as to carry on
various activities at the community level to strengthen members’ eco-
nomic base, such as those which help alleviating members’ economic
problems, and local activities to deepen the consciousness and com-
mitment of local participants. It is expected that the participation of
alternative agriculture network in AOP since 1997 will help bolster the
local Ngarn-yen aspects of AOP in the future. In a similar manner, at
the national level, the alternative agriculture network is responsible
for proposing draft bills to the government for the benefit of the
peasantry.
Finally, as history of various social movements has shown, we
cannot discount the possibility that AOP might break up or fade away
in the future. In other words, AOP as a social movement organization
might follow a pattern similar to a protest cycle, which is expounded
by Sidney Tarrow (1994: chapter 9). If that is to be the case, it is still
reasonable to believe that each member organization will be able to act
as an independent network by itself to defend and advance the inter-
ests of its members as well as to support alternative social goals.
The bond of friendship and comradeship for most of the participants
from different parts of the country will still be maintained, at least on a
personal basis. Insofar as people’s problems still remain unattended to
by the state, it is expected that some kind of realignment of grassroots
movements will emerge again under a new concrete situation within a
given political opportunity structure.
More important is the existence of a community of social activists,
mostly comprising former student activists, who are ready to offer their
help to a genuine protest movement. They have experience and polit-
ical skills in organizing such a movement, in negotiation and lobbying.
These social activists come from different occupational backgrounds:

mostly from NGOs and POs, small businesses, and professional groups
such as teachers, lawyers, medical doctors and academics. When a situ-
ation of Ngarn-ron arises, they are certain to lend their support and
assistance to such a movement. Their involvement is akin to a kind of
Ngarn-boon or a community’s cultural function with spontaneous and
voluntary help from the neighbourhood, according to each person’s
skills and availability without anyone being in command.
The case of Nong-Yor community forest5
The Land and Forest network covers the largest number of local issues
in the AOP. In early 1997 there were 117 cases of disputed land rights,
including land for family houses, land for cultivation and community
forests claimed by AOP participants. This category of lands has been, to
a certain extent, superimposed by the category of state lands, such as
general public lands, national parks, conserved forests, wildlife sanctu-
aries, national reserved forests and state enterprise’s lands. Such a
superimposition was caused by state and corporate projects such as
Eucalyptus plantation schemes and more especially the ex post declara-
tion of certain areas as state lands, mentioned earlier.
The general demand is to exclude such categories claimed by the
state from those lands occupied by farmers and community forests.
Also farmers should be given appropriate documents and their rights to
manage community forests must be granted. Nong-Yor community
forest is one such case where the Forestry Department claimed that it
was a national reserved forest and rented the community forest to the
Forest Industry Organization (FIO), a state enterprise in the Ministry of
Agriculture. FIO in turn started its ‘forest plantation’ at the Nong-Yor
community forest in 1979. But according to the procedure of reforesta-
tion generally conducted by the state agencies, all existing trees were to
be wiped out before the land was replanted with new trees, usually
Eucalyptus. This method of re-forestation was favoured by the loggers
and was prone to illegal logging. In fact, it is highly destructive to the
environment.
Formerly, the Nong-Yor forest was in good condition, full of natural
vegetation and fauna. The peasants in nearby villages depended on the
forest for their livelihood for a long time by collecting forest for their
livelihood products, such as bamboo shoots, mushrooms, vegetables
and herbs as well as game. They could also raise cattle in some parts of
the forest. However, on April 30, 1979 a major part of the Nong-Yor
community forest was declared as national reserved forests and a

project for the so-called reforestation was conducted during 1979–1982
in an area of around 610 acres and was mostly planted with Eucalyptus
trees (Committee of Villagers 1997).
The re-forestation by planting Eucalyptus trees had caused vicious
environmental impacts in 8 villages surrounding the plantation.
Cultivated lands of farmers around the forest suffered from sands
blowing in from upland Eucalyptus forests, as a result of soil erosion
associated with such planting methods. This happened during the
rainy season. During in the dry season, January to early June, they suf-
fered from dwindling water sources as the ground water level was
sinking every year.
The various impacts of Eucalyptus plantation were fully felt by the
villagers; wells in the villages became dry for several months whereas
formerly water was available all the year round. Equally significant was
the diminishing of forest products, formerly available for their liveli-
hood. Peasants in the 8 villages were therefore suffering from dwind-
ling life support systems and a degraded environment, owing to the
Eucalyptus plantation project.
Faced with these severe problems, peasants in the 8 villages set up
the Committee of Villagers for Conservation and Revival of Nong-Yor
Community Forest. The committee sent a written request to relevant
government offices, detailing all the problems facing them and
requested the latter to de-list the reserved forest status of the land area
now planted with Eucalyptus trees, so that the communities could help
revive and replenish their community forest. The request and offer to
revive Nong-Yor forest were ignored by relevant state agencies, mainly
because they lacked the bargaining power and since the matter had not
been brought to wider public attention it had not become a public
issue. Being a small and rather isolated protest group, the Nong-Yor
villagers could not press their demand further.
Subsequently, however, the matter took a positive turn for the vil-
lagers when they put up their demands within the framework of an
AOP negotiation with the government. After the negotiation, a solu-
tion was reached in principle by both sides that the Eucalyptus trees
grown in Nong-Yor forest had to be removed or harvested by FIO so
that the surrounding communities could start a forest revival project.
This was the content of the Council of Ministers’ Resolution dated
April 22, 1996. It was also agreed that if within one month FIO did not
do so, the villagers would be entitled to remove the Eucalyptus trees,
but must not squat on the newly recovered piece of land.
In July 1996, FIO had cut down the Eucalyptus trees and sold them.
However, it had not come back to remove the stumps. Later the Nong-
Yor committee agreed that if the stumps were not removed, other trees
must be planted so that they outgrew the stumps. The remaining
problem was the heavy work of reviving the devastated forest into a
community forest. This matter was brought to a negotiation table
during the AOP’s 99-day rally in early 1997.
Within the AOP negotiating framework, the Nong-Yor committee
therefore proposed to the government the following changes (Committee
of Villagers 1997): firstly, the government would provide financial
support for their efforts in reviving the harvested Eucalyptus plantation
and transforming it into a community forest. The amount of financial aid
proposed was based on official support for the State replanting scheme,
around Bt 7,500 per acre and the total amount was about Bt 4.5 million.
Secondly, they would change the Nong-Yor FIO Office into the
Coordinating Center for Conservation of Nong-Yor Forest, which would
function as a people’s organization. Thirdly, they would grant this
people’s organization the rights to manage Nong-Yor forest as ‘a com-
munity forest’, in which the communities take charge of its protection
and conserve it for sustainable exploitation with the support of the State.
According to an AOP advisor, the government negotiators appreci-
ated the community’s effort to revive the former Nong-Yor forest into
community forest. However, they were afraid that this case would set a
precedence for countless others to follow if it was to be supported by a
government budget, so they proposed that the Forestry Department
would arrange for support funds from private sources. This arrange-
ment was considered as a special pilot project for the revival of defor-
ested areas. A serious discussion ensued among AOP negotiators
whether to agree to the proposal, or to press further for the support
from the government budget. The majority agreed to such an arrange-
ment insofar as this benefitted the people and that no strings were
attached. Eventually, both the AOP and the Forestry Department con-
cluded that half of the funds would be available within April 1997 and
the rest by the end of the year.6
In sum, the case of Nong-Yor villagers’ struggle indicated that a
small and isolated campaign to regain the community forest would
not have been possible without relying on the power of the AOP.
Similarly, other small movements, which managed to succeed in press-
ing their demands on the state, also benefitted from their linkage with
a larger network of struggle, testifying to the political synergy effects
mentioned earlier.
The case of Pongkhunpet Dam
While dam construction is part of necessary infrastructure for a

country’s economic development, it also entails massive displacement
of people, which caused untold suffering and severe hardship for their
lives, destruction of communities and environment. Their houses,
lands and properties were flooded. Some of them lost an opportunity
to carry on their occupation (fishing) and sustain natural life support
systems (forest or natural products), owing to dam construction.
Although government agencies paid the affected persons some com-
pensation, their lives never regained the level of livelihood from before
dam construction. The compensation remains incomparable to their
sufferings, considering the severe and long-lasting impact they have to
bear. Even worse, there are still cases in which the displaced families
have not been compensated. The above problems still persist because
state agencies are concerned with mega projects without due regard
for human rights and the rights of displaced persons. In addition, state
regulations and operating procedures are not consistent with the
extent of the adverse impact suffered by the people, and they do not
acknowledge the livelihood made locally.
According to the AOP, their major complaints are about the prob-
lems of unfair compensation caused by a lack of transparency in the
process of determining their occupation and use of lands. Such a
process is not consistent with the reality and local conditions of the
affected families. Also, severe hardship is caused by the loss of their
livelihood after dam construction (AOP Jan. 1997: 7–8).
The general demands of the network of people affected by dam con-
struction include: a) the state must provide fair and just compensations
for the affected persons, including lands submerged by the impound-
ment of water, and impacts on the loss of their occupation in the case
of the dams already finished; b) for the dams that have not yet been
started, the state must cancel the projects as they are not likely to be
worthwhile if full economic, social, environmental and community
costs and damages are taken into account. Also, AOP proposed that the
government seek alternative water resources based on sustainable water
resource management and community participation in order to avoid
social and environmental impacts. Such alternative water resources
include dike and small water reservoirs; revival of forests along water-
shed with measures which do not cause severe impacts on the villagers;
and revival and making effective use of existing water resources. In its
decision on mega projects, the state must arrange for genuine public
hearings by fully disclosing all relevant information. The public

hearing committee must comprise of members acceptable to both
sides. In addition, all rights of the affected people must be respected
and state agencies must not arrange for or encourage the mobilization
of supporters to vote at the hearing so as to impose their will on the
affected people (AOP March 1996: 7–8).
Pongkhunpet Dam7 is in the second category. The pro-dam groups at
both local and national levels have campaigned and lobbied for its
construction, but the communities around the dam site have staged
quite a persistent struggle against dam construction. The affected peas-
ants and forest-product gatherers (about 250 families in 3 villages) in
the area first started their campaign to demand fair compensation if
the dam was to be constructed. But, in the process, it has turned out to
be a campaign against dam construction as the original group of vil-
lagers who are against dam construction increasingly gained more
support.
After succeeding in convincing the villagers to build Lamkunju
Dam in the nearby district around 1990, the Department of
Irrigation turned its attention to the Pongkhunpet Dam project.
Major causes for resistance from the villagers were conflicting infor-
mation about the level of water retention which determined the area
under the water and the fact that criteria for payment of compensa-
tions were not transparent. The relevant state agency was, of course,
directly responsible for this. While the majority of villagers were
struggling for just compensation, there was also a small group of
those opposing dam constructions. The first group of leaders was
inquiring from various sources whether their case (living off the
forests) could be compensated. They learned about the people
affected by Pakmoon Dam demanding compensation for the loss of
fishing occupation and came to discuss with the latter at the protest
rally in front of the government house. Later, they set up the
Villagers’ Committee to Solve Problems from Pongkhunpet Dam
(hereafter, Pongkhunpet VC)
In late 1993 the Department of Irrigation proposed to pay them Bt
20,000 per acre for compensation if they moved out. However, most
villagers disagreed as they were not paid for other losses such as
planted trees and natural sources of livelihood. In June 1994, the
governor of Chaiyapoom visited the dam site and tried in vain to
convince the villagers to agree to dam construction. In early 1995,
the Villagers’ Committee joined the Small Farmers Assembly of the
Northeast. A statement regarding their problems revealed the
corrupt practices among government officials in the payment of

compensations, in collusion with local capitalists and bureaucrats. It
further showed that there were no standard criteria for compensa-
tion. The concerned state tried to lower the amount of compensa-
tion without considering its impact on the affected people and
communities (SFAN 1995).
Within the framework of SFAN’s negotiation with the government,
they demanded that the government set up a non-partisan committee
to conduct a fair feasibility study of the Pongkhunpet Dam, including
its impacts on environment, natural resources, and ecological system
and on society, as well as impacts on affected people regarding occupa-
tions, properties and the loss of livelihood. They also requested that a
public hearing should be conducted before the construction of the
dam. In addition, the Pongkhunpet VC also demanded that the state
agency should not proceed with this project, pending the above stated
matters (AOP March 1996: 12).
Experiences from several rounds of struggle offered them two
lessons. First of all, it is useless to negotiate with politicians and state
functionaries as the solution involves policy change. Only through
direct negotiation with the government or its representative with full
decision-making power can there be some assurance of implementa-
tion of mutually agreed upon decisions. More importantly, the joint
decision has to be endorsed by the Cabinet and released as a Cabinet
Resolution. Secondly, most villagers fully realized that the dam brings
more damage than benefits, so that they then must demand the aboli-
tion of the project and join AOP.
In December 1995, the Pongkhunpet VC joined AOP, which decided
to support all those who are against dam construction and insisted on
the earlier demands submitted on behalf of SFAN. During the AOP
protest rally in March, 1997 Pongkhunpet VC submitted its demands
again and after direct negotiation with the government their case was
resolved in the Cabinet Resolution of April 29, 1997. According to this
resolution, the government agreed to cancel the plan to construct the
dam, pending a genuine public hearing and an impartial feasibility
study. It is interesting to note here that this successful demand
was the precursor of the substantive points included in Section 56 and
59 of the October 1997 Constitution. While several families agreed to
get some compensations and moved out, there are now about 130
families, rallying against dam construction up from 50, four years
earlier. Those waiting for compensations have now become a silent
minority.
The struggle against pro-dam coalition
It is interesting to discuss how such a small community managed to

survive huge pro-dam mobilization and constant pressures from what
might be dubbed as ‘pro-dam coalition’, including members of parlia-
ment (MPs), local politicians, the department of irrigation, the provin-
cial governor, border police, district officers, Tambon and villager
leaders and pro-dam media. Some MPs and local politicians are
believed to have a strong vested interest in dam construction and are
the prime movers of the coalition. During April 1998, when AOP
staged a rally near the government house, the pro-dam coalition also
mobilized about 10,000 supporters in front of Chaiyapum provincial
office to demand that the government revoke the Cabinet Resolution
of April 29, 1997. Again, in August 1998, they mobilized more than
10,000 people at Bua-Rahwe District office, calling on a visiting deputy
minister of agriculture to start building Pongkhunpet Dam.8 The pro-
dam coalition also submitted more than 10,000 signatures to the Prime
Minister, mostly with the encouragement from local officials, in
support of dam construction.
In addition, the pro-dam coalition tried to put their case to the
Cabinet in August 1998, asking to rescind an earlier cabinet resolution.
But it was objected to by two state agencies, the National Economic
and Social Development Board and the Budget Bureau. Having failed
this, they submitted the dam project to Parliament’s Commission on
Environment for approval by showing a new set of data on output and
area under irrigation, resulting in a higher rate of return on investment
(18 per cent against 11 per cent in the first version). The Commission
on Environment then set up a subcommittee at the provincial level,
chaired by the MP from Chaiyaphoom, to investigate matters regard-
ing payment of compensation and the number of trespassers on the
land of the Department of Irrigation. All these attempts were in fact in
violation of Cabinet’s Resolution of April 29, 1997.9
With the backing of the Commission on Environment where a key
member of the pro-dam coalition has a foothold, the coalition started
its campaigns in earnest. Between October 1998 and March 1999, the
villagers at Pongkhunpet suffered from a heavy campaign against their
efforts. When the villagers went to the market at Bua-Rahwe District,
they were criticized as the ones who obstructed the progress of the
country through anti-dam protests. They were told not to demand
much compensation as the country was suffering from severe eco-
nomic crisis. It was also said that higher officials ordered people not to
buy products from these villagers. In some cases, their children were
threatened with action to de-register them. Media reports about
Pongkhunpet activities were mostly one-sided and in favor of the pro-
dam coalition. The provincial governor had his own radio program
every weekend, where he bombarded AOP activities at Pongkhunpet.
Apart from this seemingly peaceful counter-movement from vested
interest groups, Pongkhunpet communities also suffered two ‘un-
known’ attempts to burn down the whole village: 5 houses were burnt
down on November 19, 1998 and two on January 7, 1999. On both
occasions, on the morning following the arson, AOP and allied groups
in Bangkok called a press conference at the government house and
went to protest in front the house of the Minister of Interior and
demanded immediate investigation and asked that the perpetrators
be brought to justice. In actual fact, the heaviest ‘attack’ on the
Pongkhunpet communities had occured during the previous four days.
The pro-dam coalition came directly into the village with anti-riot
commandos and a helicopter hovering above the villages. One member
of parliament, a deputy provincial governor, a top-level military officer
of the 2nd Army, members of the provincial council and about 500
dam supporters came in about 50 pick-ups to the village, with the
pretext of coming for negotiations.
They cursed the Pongkhunpet villagers as traitors, accusing them of
being communists and of wanting to form an independent state. This
was the biggest threat ever faced by the villagers. However, they stuck
to their non-violent method of resistance, by staying inside their
houses with the doors closed and did not respond. They also showed
themselves to be aware of various rights according to the new
Constitution. They wrote at the front gate into the village: ‘Article 26:
in exercising state power, every state agency must take into account
human dignity’. At another place, it was written ‘We have rights and
liberty according to the Constitution’. Directly relevant to their
demand is the following quotation: ‘Article 56 (2): Any projects or
activities that may cause severe impacts on the quality of environment
cannot be undertaken unless there is a feasibility study to assess the
impacts on health and environment’. At other places, they also wrote
several slogans against the dam, for example: ‘Constructing the dam
to kill people’. At the front of one house was written ‘The May 29
Resolution of the Cabinet revokes the construction of Pongkhunpet
Dam’.
Indeed, any viable movement needs both internal and external
strength. The Pongkhunpet villagers had staged struggles with their
own efforts for about three years before joining SFAN and later with
AOP in 1995. They have developed a capable leadership and a strong
organization. This can be testified by the fact that apart from organiz-
ing against dam construction, the villagers also set up the ‘Chiang-Ta
[Canal] Conservation Group’ to protect and conserve the forest
and ecology around their villages. Their conservation efforts were
awarded a prize for forest conservation by the Ministry of Science,
Technology and Environment. According to Pra Pichet Yasintharo
who was an AOP advisor at Pongkhunpet, ‘We need to launch our
struggle on two fronts: one negative and one positive. If we are
fighting only on the negative front, i.e. against the dam,10 the pro-
dam group will always accuse us of destroying the forests. Therefore,
we thought that we had to prove that we could keep the forest in
its natural condition. So we established “Chiang-Ta Conservation
Group” in 1994’.11 In addition, the internal strength of Pongkhunpet
group also depends on the bountiful forest products, for example,
bamboo shoots, mushroom, palm leaves, medicinal plants etc. These
are natural sources of income and provisions, which help sustain a
long period of struggle.
Its external strength lies in its networking with AOP and allied
groups. In addition, the basic legal training for the villagers by the
Thongbai Tongpao [Legal] Foundation also confirms their rights and
strengthens their commitment to non-violent struggle. Presence of
the Foundation as the Group’s legal advisor offers the villagers a
strong legal shield against the intruders. Their resistance against the
pro-dam ‘attack’ in early January 1999 was fully supported by AOP
and allied groups, including the Students’ Federation of Thailand,
the Campaign for Popular Democracy, the Alternative Energy Group,
etc. Moreover, in order to stop the ‘attack’ in early January 1999, a
high level lobbying activity was crucial. Some advisors of AOP went
to lobby the leader of a political party of which the pro-dam
Member of Parliament was a member and asked him to instruct
the latter to withdraw from the village. At the same time, an
arrangement to have an advisor of the minister of interior to visit
Pongkhunpet for a fact-finding mission also caused confusion
among the pro-dam coalition.
In sum, in defending their rights and pressing for their demands, the
Pongkhunpet villagers have adopted a strategy of non-violence and of
appealing to the rule of law as a means of self-defense in the face of
several threats and attempted attacks. The supporters of AOP and allied
groups have written protest letters to draw public attention to such
crucial issues as the misuse of state power and the violation of basic
human rights by local officials. In addition, lobbying at a higher level
also added to the successful resistance against the pro-dam coalition.
Although the anti-dam struggles of the Pongkhunpet villagers have not
gained general approval from the civil society, they succeeded in
obtaining unswerving support from the activist fraction in the civil
society, providing a ‘protective shield’ against the misuse of state
power to impose the will of pro-dam coalition on the villagers.
However, the pro-dam coalition with strong vested interests in the
dam project is always seeking an opportunity to put up its case to the
government and to campaign against the Pongkhunpet villagers and
their allies. The pro-dam coalition has resorted to campaigns of misin-
formation to the public, lobbying the media and conducting smear
campaigns against anti-dam villagers and activists. The latter were
charged with violation of law and order and instigation of being com-
munists, drug-trafficking and forming an independent state. The coali-
tion succeeded at certain points in soliciting the endorsement of
dam construction from the Parliament’s Commission on Environ-
ment. They have also downsized the scale of the project to avoid the
mandatory environmental impact assessment (EIA). The outcome of
Pongkhunpet villagers and their struggle within the AOP network
remains to be seen.
The case of Alternative Agriculture Networks12
The role played by the Alternative Agricultural Network (AAN) under

the banner of AOP is another concrete example of ‘movement power’.
As an organizational member of AOP, it has succeeded in pressuring
the Ministry of Agriculture (MoA) to comply with the agricultural poli-
cies stated in the 8th National Development Plan. It was discovered
that bureaucrats still hold a considerable amount of discretionary power
in interpreting key policy aspects of the Plan and are able to exercise
their own organizational bias and vested interest. If AOP had not inter-
vened at the implementing process, alternative agriculture projects,
which would directly benefit small farmers, would not have material-
ized. Within the framework of AOP negotiations, the MoA had to sub-
stantially revise its plan by integrating AOP’s proposal of an alternative
agriculture plan. Such an inclusion also means acceptance of people’s
organizations’ alternative ideas vis-à-vis mainstream, large-scale, chem-
ical agriculture. Such a successful proposal is much less likely to be
accepted by the government without the practice of karnmuang
pakprochachon or literally ‘people’s politics’ or in our context, grassroots

democracy.
The alternative Agricultural Network (AAN) was established about 10
years before it joined AOP. It has united a network of NGOs and a
network of POs on alternative agriculture into one single major
network. The network has twin objectives of promoting the theory and
practice of alternative agriculture and campaigning against the so-
called Green Revolution. After close consultation with farmers’ groups,
the practice of alternative agriculture, especially chemical-free agricul-
ture, has been widely accepted and has proved successful and viable in
several parts of the country. In an effort to find markets for their prod-
ucts, the network started to promote these products among urban
middle class consumers, mainly because of their awareness about
chemical-free products, such as vegetables. This will eventually form a
strong base for the growth of alternative agricultural outputs and liveli-
hood of farmers. However, after a few evaluating sessions, members of
the network realized that their efforts were not supported by govern-
ment policy; therefore, they felt an urgent need to actively undertake
policy advocacy campaigns.
They found an appropriate channel to disseminate the concept of
alternative agriculture by participating in the drafting of the 8th
National Development Plan (1997–2001). As part of Thai state’s policy
to encourage ‘people participation’ in the planning process, the AAN,
along with several NGOs, was invited to participate in the process of
drafting of the 8th National Development Plan. It made full use of this
opportunity to propose several policy recommendations, namely, com-
munities’ rights to natural resource management, coastal resource
management by small fisherfolks communities, coastal environment
protection by promoting appropriate use of fishing gears, an al-
ternative agriculture plan (sustainable agriculture plan, in official ter-
minology) and a law for the protection of indigenous plant varieties.
Only the last two were accepted as part of the plan for the agricultural
sector. When AAN members carefully looked at MoA’s Plan and its
budget allocations, it was discovered that ‘sustainable agriculture’ was not
included in the Ministry’s programs. Dominant among various programs
were those involving raising the agricultural sector’s productivity, mostly
construction of mega dam projects, promotion of agricultural production
for export, promotion of ‘progressive’ agriculture, etc. Regarding the sus-
tainable agriculture plan, it was stated in the 8th National Development
Plan that the government would promote this new agricultural practice
to cover up to 20 per cent of the total national cultivated land.
AAN members were disappointed that their policy proposals were

not integrated in the Ministry’s plan. During the second assembly of
AAN in 1996, there were some discussions among participants, both
from NGOs and Pos, that it was difficult to make a major impact on
the state’s agricultural policy. They were thinking of taking their own
initiative by attempting to develop markets for products of alternative
agriculture and to establish a direct connection between consumers
and farmers, but this was also quite a difficult task.
Key members of the AAN admitted that they had tried several times
to convince senior officials of the importance of people participation
and alternative agriculture, both during private discussions and in
several academic and technical seminars. Increasingly, members of the
AAN had learned an important lesson that policy advocacy via ‘the soft
pressure’ (participation in planning with national planning agency)
brought no tangible result. Such efforts were meaningless as govern-
ment officials only gave lip service to people’s organizations. In order
to gain concrete outcomes, they felt the need to take ‘the hard pres-
sure’ route with mobilization and protest rallies. This realization was
growing steadily within AAN. On April 7, 1996, AAN paid a solidarity
visit to the AOP rally outside the government house, bringing them
some food items and a cash donation. A representative of AAN made a
speech in support of the rally as well. AAN leaders have since main-
tained close discussions with AOP, with the result that AAN was admit-
ted as an organizational member of AOP towards the end of 1996.
For some years before joining AOP some senior leaders of AAN were
against ‘the hard pressure’ through mobilization and protest rallies
carried out by other grassroots networks or groups. They viewed such
actions as working with the feet rather than the brain. As it was proved
time and again that ‘the soft pressure’ was to no avail, a tacit under-
standing was made that instead of those leaders only middle tier lead-
ership would represent AAN in AOP activities. Such was a drastic shift
in the campaigning strategy of AAN.
During the AOP mobilization and protest rallies in January 1997,
AAN joined by setting up their camps along with others and demanded
that the MoA’s 8th Plan should strictly follow the 8th National
Development Plan. More important, to demand a concrete commit-
ment to the promotion of sustainable agriculture, the network insisted
that appropriate budgets and related schedules for implementation
during the plan period had to be given priority.
This negotiation was carried on with strength within the framework
of AOP negotiations with the government, including other problem
issues such as dam issues, land and forest issues, etc, while AOP was
rallying near the government house in Bangkok.
The following are some of the proposals which were finally
accepted in MoA’s plan during 1997–2001. These proposals were not
part of the official plan. A joint Committee to Review Proposals held
several sessions for Development of Alternative Agriculture, compris-
ing key members of AAN and senior government officials to discuss
the reviewing of the plan. There are two important proposals, which
did not exist in the MoA plan (MoA 1997). The first proposal was a
concrete plan to promote the development of sustainable agricul-
ture, being agricultural activities, which support sound environment
and reduce the destruction of natural resources, to which both sides
agreed. AAN gave a clear definition of the term sustainable agricul-
ture and proposed to give examples of the said activities. It includes
integrated farming, natural farming, organic farming and agro-
forestry. Also, in the promotion of chemical-free products, cultivated
lands under sustainable agriculture must account for a minimum of
20 per cent of total national cultivated lands. The second proposal
centred on support for farmers’ efforts to form groups and organiza-
tions and for empowering farmers, farmers’ organizations and
farmers’ institutions by promoting the learning process and net-
works as well as the enlargement of opportunities in developing the
potentials of farmers and small farmers.
The following are some interesting proposals, which aimed to ensure
that the MoA’s plan included dimensions of effective participation and
rights of small farmers and other measures for their benefit. The plan
must ensure effective participation of small farmers as well as the
development of small-scale water resources in the farmlands. Safety
standards also need to be enforced for organic farm products. In addi-
tion to the promotion of biotechnology, local wisdom relating to bio-
diversity is to be promoted in order to conserve natural resources and
develop sustainable agriculture through the participation of farmers.
Farmers’ participation in management, and support for farmers’ infor-
mation exchange networks and in information dissemination to the
farmers were also demanded. Instead of the official phrase ‘supporting
the private sector to participate in developing farmers’ organizations,
especially in marketing and management’, AAN proposed to change it
to ‘supporting the non-government organizations and private sector to
participate in developing farmers’ organizations in production, primary
processing, marketing and management, with an aim to achieve self-
reliance in farm management of farmers’ organizations’.
In March 1997, the Cabinet approved the revised plan of the MoA
after embracing the sustainable agriculture program and other support-
ing measures and budgets and the time frame proposed by AAN. The
highlights of the revised plan stated that the MoA will promote sustain-
able agriculture in an area of 25 million rai or 20 per cent of cultivated
land within the planned period of five years and that the pilot projects
will be conducted by AAN. The Cabinet approved a budget of 633
million baht for the promotion of sustainable agriculture among small
farmers by carrying out pilot projects in three years. However, not long
after that, Thailand was plunged into deep economic crisis, followed by
a change of government. On April 22, 1998 the AOP organized a brief
rally in front of the MoA to call on the Minister responsible to put the
pilot project on the agenda of the Council of Minister for approval. The
project was postponed a few times in spite of the fact that the MoA had
also agreed with the proposal (AOP 1998: 60). However, it took about
two more years before the final budget and detailed activities for the
pilot project to develop sustainable agriculture were finalized. On
May 16, 2000 the Council of Ministers finally approved the 633 million
baht for the three-year pilot project that will, for the first time, be
managed by an NGO, Alternative Agriculture Foundation. The first year
allocation beginning in October, 2000, was 224 million.
In sum, the success of AAN in proposing alternative agriculture as
part of state policy was made possible by its new strategy of shifting
from directly interacting with relevant state agencies (the soft pressure)
to mass mobilization in alliance with AOP (the hard pressure). The
strength of AAN negotiations was based on its novel and practical
aspect of the proposed policy as well as on the political synergy from
overall movement of AOP. It has presented us with an example of
political reform effort by a grassroots movement which is later
enshrined in Section 76 of the Constitution which states: ‘The State
shall promote and encourage public participation in laying down pol-
icies, making decision on political issues, preparing economic, social
and political development plans, and inspecting the exercising of State
power at all levels’.
The role of AOP in political reform
Apart from putting up direct action through mass mobilization to

press its demands on state agencies, the role of AOP in campaigning
for political reform by participating in the drafting of the new
Constitution (promulgated October, 1997) was also instrumental in the
making of grassroots democracy. In their struggles, participants of AOP

have realized that within the existing framework of legal and political
structure, their rights and claims are much restricted, thereby hamper-
ing efforts to demand state’s redress for their plights and grievances.
Narumol Tabchumpon (1997: 46–47) classified AOP’s role in political
reform, into three types: namely the process of participation, mobiliza-
tion and networking with civil society groups, and proposing a
people’s constitution. In co-operation with allied NGOs, AOP set up its
Political School to enable its participants to have dialogue with pro-
democracy organizations, academics and civic groups on substantive
political reform. Constitution drafters, politicians and other progressive
social groups were also invited to discuss relevant matters with AOP
participants. At the local level, AOP was able to mobilize villagers to
voice their problems and present their version of a new Constitution,
based on their concrete experiences, to the Constitution Drafting
Assembly members at the provincial levels. AOP also became part of a
national network on constitution drafting, comprising about 30 NGOs,
POs and civic groups. Apart from these two major activities of AOP, its
proposals for substantive political reform are at the core of strengthen-
ing grassroots democracy in the sense of being ‘a democratic system
that responds to the needs and aspirations of those at the grassroots’
(Tabchumpon 1997: 47). We will focus our attention on this issue in
what follows:
During the 99-day protest rally ending May 2, 1997, AOP submitted
the ‘Proposals on Constitution to the Constitution Drafting
Committee’ to the Chairperson, who came to receive it on March 26,
1997 at the ‘rally village’ near the government house. The process
leading to this 50-page proposal attests to democratic practices within
an organization as well as to the making of grassroots democracy, in
alliance with other social forces in the civil society.
At the 99-day rally, there were 121 local issue groups. Each group dis-
cussed its concrete problems and proposals for state actions and mea-
sures. Each group then elected 2 representatives to discuss the matters
at the AOP Political School.13 These concrete proposals which related
directly to local problems were then translated into conceptual con-
cepts or legal terms with the help of allied NGOs such as the Civil
Liberty Association and academics. Participants in the AOP Political
School were also encouraged to attend public hearing sessions organ-
ized by pro-democracy organizations to offer their points of view and
learn about others’ proposals. AOP’s proposals were many and varied;
some were concrete demands or claims on the state, while others were
general principles and concepts, which were aimed to defend and

extend the rights of grassroots people. The following are some exam-
ples of AOP’s proposals:
The first proposal was related to the right and freedom of associ-
ation, with special emphasis on groups or organizations formed by the
people; their rights to be acknowledged, protected and supported with
budgets by the state; and freedom to assemble peacefully without
weapons. This proposal arises from the fact that very often when AOP
organizes a rally, the opposing state agencies tend to charge them as
being ‘an illegal group and organization’ in violation of law and order
and thereby misinforming the public. Now these rights are enshrined
in Section 44 of the Constitution, which states: ‘A person shall enjoy
the liberty to assemble peacefully and without arms’. And more
specifically, Section 45 states: ‘A person shall enjoy the liberty to unite
and form an association, a union, league, co-operative, farmer group,
private organization or any other group’.
The proposal for ‘the community’s rights to protect and manage
local natural resources’ was based on the concrete problems facing the
peasants and indigenous people. The state did not recognize the com-
munity’s rights over fair use of natural resources and very often they
were unfairly evicted from their lands, in some cases with violence.
This was the case of state’s ex-post declaration of reserved forests and
national parks. With an aim to attain forest areas of 40 per cent of the
total national areas, the Forestry Department used satellite mapping
methods to draw demarcation lines between different categories of pro-
tected forests on the map, without the knowledge that on a particular
area, reported by satellite mapping as forests, communities had been
located there for decades. It is an irony that communities, which had
taken good care of nearby forests, were reported to have settled in
the national forests. In actual fact, the forests were superimposed on
existing communities. Thus, the categories of protected forests in
government satellite records were ex-post ‘legal classification’ of forests,
imposed on rural communities, as well as a number of rural market
towns and even some local government offices. This process had in-
evitably caused large-scale eviction and displacement of tens of thou-
sands of people and their communities. The Network of Land Rights and
Forests and the Assembly of Indigenous Peoples of Thailand in AOP have
been actively campaigning for communities’ rights to manage local
resources. Fortunately, this proposal was included in Section 46 of the
Constitution which states: ‘Persons so assembling as to be a traditional
community shall have the right to conserve or restore their customs,
local knowledge, arts or good culture of their community and of the

nation and participate in the management, maintenance, preservation
and exploitation of natural resources and the environment in a balanced
fashion and persistently as provided by law’.
Right to information is another proposal which had been widely
supported by the civil society, and so is also part of the new Charter. At
the concrete level, the grassroots people had no rights to information,
a situation in which state agencies often misinformed them about the
true nature of the impacts of mega projects. When a dam was being
proposed, people in the affected areas were often informed that their
lands would not be flooded or that their fish crops would not be
affected enough to destroy their livelihood. More emphatically, they
were told the dam would bring them a better life. Instead, the reverse
was the case.
Secrecy and misinformation remain a major mode of operation in
many government projects affecting the people, both urban and rural,
so the proposal for the right to information was given strong support
by all groups campaigning for political reform. The right to informa-
tion in general was integrated into the Constitution in Section 58. In
addition, AOP’s proposal also included the right to hold public hear-
ings with civil participation before a project is approved, so that they
can fully gain all the information and explanations to understand both
the positive and negative sides of the state projects or other activities
which may affect the quality of environment, health and quality of
life. According to Section 59, ‘A person shall have the right to receive
information, explanation and reason from a State agency, State enter-
prise or local government organization before permission is given for
the operation of any project or activity which may affect the quality of
the environment, health and sanitary conditions, the quality of life or
any other material interest concerning him or her or a local commun-
ity and shall have the right to express his or her opinions on such
matters in accordance with the public hearing procedure, as provided
by law AOP is now empowered to invoke Section 59 to challenge the
state’s proposal to construct four dam projects.
Although there was a widespread demand for the decentralization of
power from the central government in most public hearing sessions of
the Constitution Drafting Assembly, for participants of AOP this call
was rooted in a concrete situation facing them. They have encountered
countless cases of red tape in dealing with (appointed) local officials,
who often fail to take action for the poor, even in cases where the gov-
ernment has approved certain measures to solve their problems. So
they were in full support of the decentralization of power, especially

for the direct election of provincial governors and district officers. They
correctly view appointed provincial officers as lacking in accountability
and cooperative spirit for the rural masses. However, such proposals
have not yet fully materialized, only the election of sub-district or
Tambol Administrative Organizations is to be held every four years. It
is hoped that the election of officials for higher offices in the provincial
administration will also take place in the future. AOP also proposed
that the state decentralize its fiscal power to local authorities and
provide a fair proportion of national budget for local and central gov-
ernment spending. This matter is also taken up in the new consti-
tution. AOP also called for the decentralization of power to local
authorities in education as well as in administration of justice.
On state policies, AOP proposed that the state must provide a fair
social welfare system for farmers; the state should compensate the
people for all the damages and loss of [occupation] opportunities as a
consequence of state or public enterprise projects by ensuring them a
better life and by the establishment of a fund for revival of their com-
munities. There were also proposals for the state to implement a
genuine land reform, a progressive capital gains tax to prevent land
speculation; and that the state will not pass any laws that violate the
farmers’ land rights and implement measures to protect and support
small farmers and support alternative agriculture. However, these pro-
posals were only partly recognized by the Constitution in two sections
regarding directive principles of state policies. Section 83 states: ‘The
State shall organize the appropriate system of the holding and use of
land, provide sufficient water resources for farmers and protect the
interests of farmers in the production and marketing of agricultural
products to achieve maximum benefits, and promote the assembling of
farmers with a view to laying down agricultural plans and protecting
their mutual interests’. The Thai state also affirms its commitment to
promote, encourage and protect the co-operative system.
AOP also supported and endorsed allied pro-democracy organiza-
tions’ proposals on organizations and mechanisms for the inspection
of the exercise of state power. This included the following proposals for
the establishment of several autonomous bodies such as administrative
courts, with civil participation through public hearing processes; an
election commission to supervise elections at all levels; parliament’s
ombudsmen; a national counter-corruption commission and a com-
mission on human rights. In addition to other rules and procedures,
there was a proposal for civil participation in the removal from offices
of persons holding political positions. This proposal was recognized in

Section 304 of the Constitution which states: ‘Voters of not less than
fifty-thousand in number have the right to lodge with the President of
the Senate a complaint in order to request the Senate to pass a resolu-
tion under Section 307 removing the persons under Section 303 from
office’.
In sum, the role of AOP participants in the political process leading
to the promulgation of the 1997 Constitution is a hallmark of the
AOP’s new strategy, which involves legal and institutional reforms, in
addition to mass mobilization. In this process, AOP had become part of
a national network on constitution drafting, comprising about 30
NGOs, POs and civic groups. Their proposals follow naturally from
their struggles at local, provincial and national levels where legal and
structural impediments prevented them from attaining their demands
and claims. While some of the proposals to the constitution drafting
committee were marked by material claims, there were several others
pertaining to general political reform, especially in extending and
strengthening rights of the civil society and in circumscribing and
inspecting the exercise of state power.
Conclusions
During the last three decades countless communities have suffered

from the process of marginalization or development aggression as a
direct result of the Thai state’s growth-oriented development poli-
cies. Lacking an effective channel of interest representation, these
victimized communities, both urban and rural, have staged their
struggles by taking direct political actions to stake their claims on
the state, to defend and advance their rights in what might be
labelled as a counter-hegemonic project against mainstream develop-
ment policies of the Thai state. In doing so, the AOP has contributed
significantly to the political activation of the popular sector. As
such, the AOP is prominent among Thai social movements aiming
to strengthen civil society and working towards achieving grassroots
democracy. Judging from its activities, we can say that AOP has con-
tributed to a redefinition of politics as something beyond the ballot
box. Indeed, AOP activities, along with allied groups and networks,
underpin the process of transformation of Thai politics towards
grassroots democracy. AOP participants aim to achieve democracy
that is able to solve their problems or, in the words of some leading
participants, ‘democracy that they can eat’.
Another important point is that the rise and consolidation of AOP

can be designated as a form of ‘political innovation’ by a popular
movement, based on the principle of ‘political synergy’. AOP’s ac-
tivities offer participants a kind of ‘political technology transfer’ or
‘political diffusion’, which greatly bolsters the process of people
empowerment. Its repertoire of collective actions, participatory and
decentralized organizational structure and collective leadership are
instrumental in strengthening and ensuring its movement powers and
fairly successful outcome as shown by the four case reports.
Finally, AOP can be considered an innovative grassroots movement
in that it has the following features: having a structure with informal
networking and autonomy, being a kind of non-party political forma-
tion (Kothary 1983); not contesting for state power; going beyond the
confine of parochial interests; and adopting a trans-class alliance in its
quest for alternative development or alternative mode of collective life
by participating with other networks of voluntary groups and progres-
sive social forces in the struggle for political reform, human rights,
social justice, gender justice and ecological sustainability. Besides, AOP
is presently among the most powerful grassroots movements in
Thailand and represents the hopes and aspirations of the poor.
Notes
1 Interviewed with Vanida Tantivithayapitak, April 29, 2000
2 Interviewed Boonthan T. Veerawongse, May 18, 2000.
3 Interview with Pra Pichet Penamrod April 25, 2000.
4 Interview with Vanida Tantivithayapitak, April 29, 2000.
5 Located in Sangkla District, Surin Province, Northeast Thailand,
6 Interview with Boonlert Wisespreecha on April 22, 2000.
7 Pongkhunpet is the name of the dam to be constructed, located at Koke-
Saard Sub-district, Nongbua Rahwe District, Chaiyapum Province. For our
convenience and consistency, Pongkhunpet is also referred to as a location.
8 Interview with Pra Pichet Yasintharo, May 12, 2000.
9 Ibid.
10 This means ‘negative’ from the perception of the general public or audience.
11 Interview with Pra Pichet Yasintharo.
12 This section draws heavily from interviews with Supha Yaimuang on May
19, 2000 and with Witoon Lianchamroon on May 31, 2000. Both are ad-
visors to AOP and key members of AAN.
13 During a long 99-day rally in 1997, AOP established (March 6, 1997) its
‘Political School’ as an important educational activity to promote critical
understanding about economic, social and cultural aspects of Thai society.
Participants were also introduced to several relevant legal aspects as well as
training for non-violent actions. Lecturers were recruited from some ad-
visors of the AOP and academics, NGOs staffs and social activists from pro-
democracy organizations. This learning activity coincided with the call for
proposals related to the new constitution to be officially deliberated by the

Constitution Drafting Assembly. So, the AOP Political School became an
important venue for the practice of grassroots democracy.
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Federation of Thailand, in Thai, Bangkok: Children Foundation.
8
Grassroots Democracy and
Community Empowerment:
The Quest for Sustainable Poverty
Reduction in Asia
Leonora C. Angeles
Introduction
Poverty reduction has made a comeback in the agenda of international

development agencies in the early 1990s, after almost three decades of
being on the back burner.1 The unquestioned belief in the trickle-down
model of development underlies the focus on market-oriented growth
and global economic integration since the 1970s. As the benefits of
economic liberalization have failed to assist the world’s poorest popu-
lations, various forms of social movements challenge the Asian states
to become more accountable and responsive to basic human needs.
Many grassroots organizations and NGOs look everywhere but the
state to bring change based on alternative development paradigms.
Simultaneously, development practitioners within the interstices of
international agencies, national governments and civil society have
begun to move in various directions to bring about alternative forms of
sustainable development.
The mantra of sustainable development has undergone modi-
fications from its original formulation as the ability to meet current
needs without sacrificing the welfare of future generations to include
many variations promoted by non-state intermediaries and NGOs
(Singh & Titi 1995). At the core of these anti-development or alter-
native development discourses is the belief that the goals of human
development would not be achieved unless extricated from the
narrow lens of economic growth and economic interpretations of
development. Human development therefore entails the elimination
of conditions that produce poverty and related conditions of
hunger, vulnerability, deprivation, violation of dignity, social isola-
182
Leonora C. Angeles 183
tion and powerlessness, that is, the path to sustainable poverty

reduction.
The view of human development as the sine qua non of sustainable
poverty reduction has already animated the thinking and activities
of various state and non-state or civil society agents at the macro
(national/international), meso (institutional) and micro (local/ programs/
projects) levels. However, the conditions under which sustainable poverty
reduction could take place, remains relatively under-explained. Schneider
(1999: 7), writing for the Organization for Economic Cooperation and
Development (OECD), considers participatory governance as ‘the missing
link in poverty reduction’. Participatory governance refers to the involve-
ment of different stakeholders, especially poor people, in decision-making
processes, based on the tenets of accountability, transparency, rule of law
and good and complete information, to guide decision-making outcomes.
Good governance also requires ‘the move from discussing “what poor
people need” to what access to resources and political influence should
low-income people have to allow them to ensure that their needs are
met, their rights respected and their priorities addressed’ (Editor’s
Introduction 1996: 4). Therefore, it is critical to examine the quality
and outcomes of state-elite-civil society interactions in the course of
governance of poor communities, particularly in the delivery of basic
services.
Participatory governance is essentially about the empowerment of
communities and grassroots organizations to enlarge their share of
political and social power so that they can better control their lives. It
is not so much the creation of competent government programs for the
poor, but the creation of competent communities within the poor that
matters in participatory governance. Joseph Stiglitz, former World
Bank Chief Economist, introduces one of the Bank’s participatory
poverty assessments saying, ‘we now need to expand our conceptions
of poverty focusing on income, expenditure, education and health to
include measures of voice and empowerment. That is the challenge
that the poor make to us’ (Narayan et al. 2000: ix). In their foreword to
the same report, Clare Shorts, British Secretary of State for Inter-
national Development and World Bank President James Wolfensohn,
reiterated the book’s emphasis on poor people’s political perspectives.
They noted the powerlessness of the poor to negotiate fair market
prices, their experiences with corruption and lack of accountability;
their own positions of irrelevance and the subjugation to abusive
behaviour on the part of formal state institutions and certain NGOs
(Narayan et al. 2000: ix).
184 Grassroots Democracy and Community Empowerment
What is largely missing in much of the World Bank’s analyses,

however, is the question of how to use the results of its consultation
with the poor in meaningful and responsive policy changes, particu-
larly in restructuring its structural adjustment policies. Do states and
international development agencies, whose policies often represent the
interests of governments and market agents, still have a role to play in
poverty reduction? How can states and agencies of international devel-
opment together address this problem of alienation from segments of
civil society, particularly organizations of the poor who have given up
not only on their governments but also on aid and charities?
Some caveats on poverty reduction discourse are perhaps necessary.
Poverty reduction is different from mere poverty alleviation. Poverty
alleviation does not imply the reduction of the number of people who
are poor, but only the lessening of the suffering by the poor, or slightly
improving their condition. Although poverty reduction is now the
dominant global discourse, the strategies for achieving this have not
become sustainable. Sustainable poverty reduction is the systematic or
programmatic attempt to increase the number of people released from
poverty and sustain that success with the eventual goal of poverty
elimination.
This chapter first examines the genealogy of international develop-
ment discourses in Asia, particularly the co-existence of the dominant
neo-liberal paradigm and alternative perspectives on social, particip-
atory, and capacity development. It then examines the paradoxes in
the relationships between states, markets and civil society in light of
globalization and the rise of anti-poverty organizations in Asia. This
chapter also analyses the Philippines as a case study to explore the
institutional, political and policy requirements in a country where
democratic institutions do not guarantee an increased ability of the
poor to effect or influence state policy. The last section of this chapter
looks at the prospects for community empowerment and grassroots
democracy in light of the current push for holistic thinking and inte-
grated interventions around sustainable poverty reduction.
Community empowerment, grassroots democracy and the

genealogy of international development discourse in Asia
Poverty reduction discourse in Asia is examined here from the develop-

ment decade of the 1970s up to the recent resurrection of the poverty
agenda. This three-decade roundabout journey provides interesting
insights into the mindset and operations of development mandarins,
mercenaries and missionaries who generate new knowledge and recycle

old ones as they navigate through the bureaucratic mazes of national
and international agencies. The recent discourse on poverty promises
to show more analytical rigor, resource commitments and recognition
of poverty as multidimensional and requiring the integration of
complex economic, political, environmental and social concerns,
including the gender dimension.2
Western governments and international agencies have determined
the contours and components of development discourse from the post-
war development efforts under the Marshall Plan to current interests in
social capital and participation. The Bretton Woods institutions, that
is, the IMF-World Bank and UN specialized agencies simultaneously
pushed for trickle-down models of development and appealed to uni-
versal human rights in the early post-war period. In the last three
decades, they have integrated views on human development, sustain-
ability and globalizm, as nation-states commit to various international
documents,3 thus homogenizing the terms of development discourse.
Now, international development and government planning agencies in
Asia, as well as grassroots organizations and NGOs that access funds
from these bodies, need to pay attention to sustainable development,
environmental awareness, good governance, gender equity and social
capital in their plans, programs and projects.
Since the late 1960s and 1970s, a growing movement of grassroots
advocates and activists in Asia inspired by Freirean pedagogy and
human rights discourse, have challenged the bureaucratic pathologies
of donor agencies, particularly their preoccupation with aid and trade
that come with a string of conditionalities. They were also highly crit-
ical of the outcomes of mainstream development practices, as they
advocate participatory approaches in action and research and decision-
making processes at the grassroots, from the bottom-up. The harsh
impacts on the poor of fiscal austerity measures and other policies asso-
ciated with Structural Adjustment Programs (SAPs) managed by the
IMF and the World Bank provided an opportunity for grassroots,
national and regional alliances in Asia to organize against state compli-
ance and IMF-WB interventions. They also tried to improve their use of
participatory approaches and visions of alternative development prac-
tices.4 The participatory development movement was partly a reaction
against how community development was introduced in the 1950s to
promote rural development through the participation, or more appro-
priately the mobilization of labour by people in the implementation
of projects designed by outsiders (Atal 1997). There are numerous
examples of how outside agencies continue to consult local communi-

ties on a pre-determined agenda to enlist local participation and which
is often limited to receiving material inducements such as food-
for-work, wages and credit and which provides these outside agencies
information for research or analyses that do not necessarily lead to
positive local transformation (Mukherjee et al. 1997: 5).
Taking the cue from development NGOs, the World Bank commis-
sioned its staff and hired consultants to introduce a form of organiza-
tional learning so that its staff could play the role, not of external
experts, but of participating stakeholders who initiate, facilitate and
nurture participatory processes (Bhatbanagar & Williams 1992; World
Bank 1996). These initiatives led to the subsequent interest of the
World Bank Poverty Division to use participatory approaches in
poverty assessments, culminating in the production of various consul-
tations with the ‘poor’ reports and books. This interest in popular par-
ticipation recognizes the non-economic and micro-foundations of the
new Keynesian macroeconomics by broadening the constitution of
market imperfections to include households, family decision-making
and other social dynamics. This has allowed World Bank analysts to
explain social structures and institutions on the basis of individual
optimization, thus setting the stage for its increased interest in the gov-
ernment-civil society nexus, governance issues5 and social capital as
useful concepts in development (Fine 1999: 2–4). Social capital gener-
ally refers to the norms of trust and cooperation that are essential or
conducive to economic activities (Putnam 1995; Woolcock 1998).6 The
various definitions of the concept suggest that social capital is capable
of doing anything and everything vis-à-vis public goods, networks,
culture, community, with the only proviso that it should be attached
to economic performance in a functionally positive way for growth
(Fine 1999: 5). The current interest of international development agen-
cies in social capital and participation as a development strategy could
be interpreted as another way of building on the micro social founda-
tions of market solutions and deflecting attention from the develop-
mental role of the state (Fine 1999: 12–13).
In line with social development views that go beyond narrow eco-
nomic perspectives is the realization that while problems like poverty
may be universal, their solutions need not be universal and have to
be specific and context-based (Atal 1997: 12–13). This realization
springs partly from the dissatisfaction with proposals for single and
unilinear models of development, be it of the Marxist socialist or cap-
italist variety. Complementing this is the view that the reorientation
of development efforts must recognize historical and cultural spe-

cificities, as well as the uniqueness of formal and informal institu-
tions. Thus, international development agencies now invoke popular
participation, local knowledge and capacity development, based on
the view that local capacities must develop through decision-making
by actual beneficiaries at the local levels and necessary institutional
change at the national and international levels of governance
(Jackson et al. 1999).
The alternatives proposed by participatory development advocates
have not captured the popular imagination in Asian NICs because of
rising incomes and spectacular market growth rates in the early 1980s
to 1990s, that have largely benefitted the burgeoning middle class
(Goodman & Robison 1993). It was the 1997 Asian economic crisis that
provided an opening for activist groups to question not only the indus-
trial development strategies pursued by states, but also the wisdom and
sustainability of market-oriented growth and the increased reliance on
markets and the private sector as main engines of development. The
crisis has led to a number of studies on the social impacts of financial
instability,7 as well as anti-poverty programs and social safety nets in
countries most affected by the crisis (Knowles et al. 1999; Reyes et al.
1999; McGee & Scott 2000). It has also initiated discussions around
‘endogamous development’ based on the integration of export indus-
tries to the domestic economy and priority placed on human resource
development.
Why is poverty reduction not working? Civil society,

participation and the rise of anti-poverty movements in Asia
Globalization has been transforming the traditional relationships

between states, markets and civil society, particularly the roles and
functions of states and civil society as neo-liberal ideas guide market
economies. International governance bodies, from the World Bank to
the World Trade Organization are better known for their commitment
to market mechanisms and unquestioning faith in market-led growth
as the means to poverty reduction.
Poverty reduction efforts have been largely ineffective because of
the minimal attention paid by states, civil society and development
agencies to the structural causes of poverty, including the role of
market-led economic growth in exacerbating income inequalities and
poverty. The main reason behind failed efforts to reduce poverty is
the common perception that poverty is largely caused by individual
deficiencies, as seen in international standards of measuring and

assessing poverty based on incomes, literacy, calorie intake, or lack of
something. Hence, the focus of most poverty reduction programs is
to make poor people function more effectively and to improve the
delivery of social services such as education, job training, health,
welfare and legal aid programs to help them compete more success-
fully in the job market and to perform at higher levels in the work
force. In contrast to this orientation on effective programs is the
emphasis on efficient communities. This view regards persistent
poverty as structurally inherent in inequitable social and economic
systems, leading to the powerlessness of the poor. Poverty could only
be addressed effectively, according to this position, when poor people
acquire enough political influence to change community and
national policies and conditions that keep them from getting their
fair share of goods and services in society (Kramer 1969).
This reason is connected to the issue of ‘scale mismatch’ in the
comparative power, reach and resources of local NGOs and grass-
roots organizations, on the one hand and that of corporations, states
and international bodies of global governance, on the other (Barker
1999: 17–18). Even among international organizations and develop-
ment agencies, there exists an uneven distribution of resources,
power and ideological influence. The relative power of the WTO,
IMF, the World Bank and large multinational corporations, com-
pared to smaller agencies like the UNICEF and UNDP partly explains
the greater influence of neo-liberal policies than social development
agenda. Development agencies are not monolithic, although they
may appear to speak with one voice based on their official policy
pronouncements. The recent departure from the World Bank of
Joseph Stiglitz and Ravi Kanbur, editor of the World Development
Report, is indicative of ideological and policy tensions within the
Bank. More importantly, this scale mismatch relates to the relative
weakness of social and participatory development advocates, grass-
roots organizations and NGOs in promoting development alternat-
ives in the light of what happens to civil society and states under
globalization.
The combined trends of devolution, decentralization, budget cut-
backs, restructuring and social policy reforms have also created cracks
in the social contract between state and citizenry, communities and
governments. Since the states could not carry out much of its former
functions and tasks, non-state organizations and informal institutions
in the community have taken up the responsibility of carrying these
out. They range from welfare provision, disaster preparedness and

rehabilitation, environmental protection, livelihood promotion and
job creation. On the other hand, there are occasions where states feel
that development NGOs and other civil society forces have been
undermining their authority and reducing their power, esteem and
respectability in the eyes of the public. In this context, attempts on the
part of NGOs to emphasize participation are looked upon with suspi-
cion by governments that see NGOs as challenger-competitor, or worst,
as subversives out to topple them from power. Encouraging particip-
ation could be problematic as it has the potential for creating conflicts
that societies have managed to keep under wraps. It can also create ten-
sions between intermediaries and outsiders and people being encour-
aged to participate (Fals-Borda & Rahman 1991; Burkey 1990), or
worse, create a new mode of social control or ‘tyranny’. More import-
antly, there are still many gaps in the current thinking and practice on
the interface between capacity development, participatory develop-
ment and North-South partnerships that need to be addressed to make
their practice a meaningful and sustainable alternative (Angeles &
Gurstein 2000).
These challenges of participation are most telling in poor people’s
participation in civil society. Participation by the poor in civil
society and governance bodies, by and in itself, does not necessarily
lead to effective poverty reduction results. Prescriptions of particip-
ation by the poor to alleviate poverty seem to be based on a faulty
assumption that, if only the poor were participating more actively in
programs designed to improve their conditions, then they would be
on the road to redemption. Not only is this view patronizing, it is
also ignorant of the complexities surrounding the human experience
and causes of poverty. States often lack the political will and
resource commitments to implement community-based poverty
reduction programs, often preferring the ‘roads, pumps and electric-
ity’ approach. Given that participation of the poor in civil society
suffers from poor quality, small scales and susceptibility to manip-
ulation, the poor are unable to influence the state to enact policies
beneficial to their interests.
Globalization has provided transnational avenues for various net-
works to attack poverty by creating global and regional alliances doing
development work. However, it is still in the domestic or national state
level and the government-civil society nexus where more effective
work, in terms of policy design, implementation and evaluation, needs
to be done.
Community empowerment and grassroots democracy in the

Philippines: challenges to unsustainable poverty reduction
efforts
The Philippines is an interesting case to highlight the paradoxes of

democracy and civil society and their implications for promoting com-
munity empowerment and grassroots democracy as a means to sustain-
able poverty reduction. The country is known to have a vibrant civil
society and an NGO sector and yet, has the most persistent and wide-
spread poverty incidence, particularly in the rural regions, among the
original five Association of Southeast Asian Nations (ASEAN) member-
countries (Gerson 1998: 46; Monsod & Monsod 1999: 51–94). The
non-state agents doing community development and other poverty
alleviation programs may be roughly divided into several categories.
(1) NGOs or non-government organizations, private voluntary organiza-
tions run by government-connected groups, church organizations, pro-
fessional advocacy and consulting groups, women’s organizations,
farmers, credit and multi-purpose cooperatives and other private sector
groups. (2) POs which are people’s grassroots mass organizations which
may or may not have their own NGO expression and be organized into
different sectors (i.e. farmers’ groups, fisher folk groups, urban poor,
trade unions, women, home workers, indigenous peoples, students).8
Philippine NGOs and POs have also formed national multi-sectoral
coalitions, networks, or alliances to make their campaigns more effect-
ive.9 Some of these NGOs and POs rely on local resources, government
funding and international development funds coursed to them directly
or through intermediary agencies. Despite this active civil society, the
participation of the poor in governance and their impact on it’s policy-
making and program implementation remains limited, as the state
continues to enact policies that are insensitive to the needs of the
poor.
Philippine democracy, like other formal democracies in Asia, does
provide a forum for negotiations with the state by urban poor people,
small farmers and street vendors. However, it is also a place for bar-
gaining between and among state officials, bankers and industrialists.
Formal, not substantive, democracy has only perpetuated the practice
of showcase planning and the inability of government leaders to
extricate poverty reduction efforts from electoral politics and patron-
age political culture. Elections, freedom of assembly and other formal
democratic institutions are not a guarantee that the poor would
influence the distribution of material goods and political power. In
fact, many believe that Philippine democracy has the rather insidious
effect of corrupting the poor for electoral mobilization and leading
them into believing the rhetoric and empty promises of their govern-
ment. Perhaps a more interesting question is how democratic institu-
tions can be transformed to recognise not only the legitimacy and
efficacy of poor people’s demands, but also the beneficial effects to
society of ensuring that poverty is reduced, if not eradicated.
This section provides, first, a brief summary of poverty debates in the
Philippines. Second, it gives an analysis of how and why poverty
reduction efforts of the Philippine state have failed historically, includ-
ing an analysis of the challenges posed by community organizations to
such state failures. And third, it provides a discussion of the political
and policy requirements in strengthening community empowerment
and grassroots democracy, pointing to some policy directions required
for sustainable poverty reduction in the Philippines that might be
relevant to other countries.
Poverty incidence and debates in the Philippines
There are at least three major debates on poverty in the Philippines.

The first is on the relationship between growth, poverty and inequal-
ity. Some believe that the reduction of absolute poverty in Asia in the
two decades before the 1997 economic crisis has been made possible by
sustained economic growth that accompanied improvements in
income distribution (Balisacan 1999: 83). Following this argument, the
slow pace of economic growth is seen as the main cause of higher
poverty incidences in the Philippines. Any decrease in overall eco-
nomic activity, such as the financial crisis in 1997, could result in
increased poverty rates in Asia as a whole (Knowles et al. 1999), includ-
ing the Philippines (Reyes et al. 1999; Lim 1998). Others argue that the
episodes of economic growth have not benefited the poor, either
absolutely or relatively. Thus, it has been concluded that a growth-led
poverty alleviation program is not appropriate for the Philippines, the
focus is, instead, on other micro-level models such as the creation of
an apex bank for the poor (Balisacan 1999: 83).
Another debate concerns the appropriate measurement of the poverty
incidence and setting of the poverty level line. The most used informa-
tion sources on poverty incidence and income distribution in the
Philippines are statistics from the National Statistics Office (NSO) based
on its nation-wide annual Family Income and Expenditure Survey
(FIES). It captures a wide-range of implicit household expenditures, such
as the use of durable goods, including dwelling units, consumption of

home-produced goods and services, gifts and assistance and relief goods
received by households from various sources. The data is good for
household welfare comparisons between rural and urban areas and
among socio-economic groups (see Table 8.1). Official government stat-
istics showed the incidence of poverty, using FIES data, at 40.6 per cent
of the population which remain poor in 1994 with regional variations
ranging from the lowest in the National Capital Region (Metro Manila)
at 10.4 per cent, and highest in the Autonomous Region of Muslim
Mindanao at 65.5 per cent (Balisacan 1999: 101; Srinivasan 1993: 3).
Other poverty estimates such as the May–June 1999 survey of Pulse
Asia showed a much higher poverty incidence rate: 70 per cent of all
families remain poor, based on the P6,000 monthly income for a
family of five (roughly based on World Bank’s $1 per person daily
income) (Miranda 1999). Among the unemployed (51 per cent) or
working less than 40 hours per week (19 per cent), 16 per cent are
actively looking for work, with half being unsuccessful for the past six
months.
The use of various thresholds leads to different estimates of poverty
incidence. One poverty threshold set for the Philippines, that is,
income needed for a family of five to no longer be poor, is P6,000 per
month, with median monthly food expenses at P3,000. This is approx-
imately based on the World Bank’s approach to quantifying absolute
poverty trends in developing countries, using the $1 per day per
person (at 1985 purchasing power parity) absolute poverty threshold.
The government’s approach to identifying poverty lines begins with
the construction of representative food menus for rural and urban
areas of each region. The menu prepared by the Food and Nutrition
Research Institute is based on local consumption patterns and a
minimum nutritional calorie requirement of 2,000 calories per person
Table 8.1 Poverty Incidence in the Philippines
Year Poverty head count Poverty incidence Subsistence incidence

of families of families
1985 49.3 44.2 24.4

1988 45.5 40.2 20.3
1991 45.3 39.9 39.9
1994 40.6 35.5 35.8
Source: Llano & Sanchez (1998). Data based on the annual Family Income and Expenditures
Survey (FIES) of the National Statistics Office (NSO).
per day and 80–100 per cent of recommended daily allowance for vit-
amins and minerals. The menus for one year may be based on the Food
Consumption Survey done on the previous years, hence yielding
poverty lines that are not consistent as estimates of food thresholds for
prosperous regions tend to be higher than for poorer regions. Hence,
‘the food poverty lines employed for various regions and years are not
comparable since they imply different living standards [and] cannot
be, therefore, suitable for either national poverty monitoring or assess-
ing comparative performance across regions or areas of the country’
(Balisacan 1999: 97–98).
Another major debate is on the identification of causes of poverty
and appropriate solutions to poverty. This is connected to the first
debate on how macro-economic policies on economic growth affect
poverty. Table 8.2 summarizes the different causes of poverty and
interventions required, as proposed in various studies. Each of the
causes and interventions could be applicable at the macro (policy),
meso (institutional) and micro (project) levels. They also promote the
creation of an enabling policy and political environment necessary for
the self-empowerment of the poor. Such analyses suggest the accumu-
lation of sophisticated knowledge available in the area of poverty
reduction. Hence, it is not so much the lack of adequate knowledge
and relevant information about the causes, effects, and solutions to
poverty that make poverty reduction programs unsustainable and inef-
fective. Rather, the lack of sufficient, politically astute and policy-
relevant analysis of the available knowledge and information and the
structural barriers to the translation of that analysis to political action
are at the root of why poverty reduction efforts have largely failed in
the Philippines.
Why state poverty reduction efforts are not working
The efforts of the Philippine state to address the poverty situation have
miserably failed because of the character of Philippine state-elite rela-
tions and state-civil society relations and the weakness of the executive
and administrative bureaucracy and national and local political cul-
tures. These could be best analyzed when placed in their proper histor-
ical and political economic contexts. The reign of President Marcos for
almost 20 years saw restrictions on civil society. Legislative and execut-
ive powers were concentrated in the presidency; the opposition was
immobilized; and the opportunities for public participation in govern-
ance were effectively eliminated. The 1986 EDSA uprising ushered a
Table 8.2 Causes of Poverty and Required Interventions in the Philippines,

Summary of Various Studies
Causes of poverty Interventions required
Failure of growth and lack of • Sustained economic growth

employment opportunities • Labour intensive growth
• Removal of discrimination against
activities in rural areas where most
of the poor reside
Inequality of incomes, wealth and • Asset redistribution, i.e. agricultural
access to resources land, natural resources, credit access
High population growth • Aggressive population management
program
Declining factor productivity • Removal of price distortions
• More investments in R & D
particularly in agriculture
Inadequate provision of social services • Protecting the social sector budget
• Increasing internal efficiency, that
is, more basic education and
primary health care
Poor or degraded resource base • Better management of resources
under open access
Unresponsive and graft-ridden • Encourage popular participation
politics and bureaucracy and consultation in policy
formulation and project design
Source: Llanto & Sanchez (1998).
post-Marcos era that reformed the State’s constitutional framework,10

and created new mechanisms under the 1991 Local Government Code
for civil society to engage the state and make a direct impact on gov-
ernment policy-making and program implementation (Wui and Lopez
1997: 7–8). Some of the frameworks that resulted from civil society’s
influence in policy-making are the Philippine Agenda 21 for sustain-
able development, the Peace Agenda and the Social Reform Agenda
(Brillantes 1997). The mechanisms for civil society participation,
however, suffer procedural problems and structural obstacles in the
effective participation of the poor in civil society and their engagement
with the state, due to several factors.
First is the character of state-elite relations in the Philippines. Strong
landed capitalist and financial interests and other political rent-seekers
have penetrated the Philippine state and have influenced the enact-
ment of national and local government policies that show little
concern for the plight of the rural and urban poor. In many cases,
these very policies trample the rights and further the social marginal-
ization of the poor. Successive post-war governments, from Roxas to

Macapagal, from Marcos to Estrada, were elected on a platform of
reforms that purport to eradicate poverty. However, they have failed
miserably to enact effective land reform laws, taxation and fiscal pol-
icies that expand social programs and industrial and agricultural
policies that create widespread economic opportunities.
The insensitivity of political regimes to the plight of the poor is
shaped by the persistence of state patrimonialism, best epitomized by
the Marcos-led government. The Marcos government pursued a limited
agrarian reform program covering only rice and corn lands, whose
implementation was hampered by legal loopholes and bureaucratic
inefficiency. The state embarked on an export-oriented industrializa-
tion policy, used centralized state planning and relied heavily on
foreign loans to build a massive infrastructure program to promote
market-oriented growth as an indirect way of reducing poverty. Such
state policies, however, were the result of the alliance between the
state, foreign capitalists and the emergent domestic bourgeoisie, largely
composed of the relatives and friends of the Marcos family who
engaged in almost 20 years of ostentatious lifestyle, corruption and
plunder of the economy. These factors, combined with state misman-
agement and unsound industrial policies, prevented the Philippines
from experiencing high economic growth rates similar to East Asian
NICs (Angeles 1992).
Under President Aquino, the pre-martial-law elite composed of the
old comprador bourgeoisie, import substitution industrialists and
Aquino supporters came back to power. They regained their economic
holdings seized by Marcos and many appointive and elective state
political positions, from the Senate, House of Representatives, various
executive departments and boards of state corporations, down to the
local town levels. While the Aquino government had taken steps to go
after the Marcoses and their cronies, they were ineffective in recovering
lost public assets, while other cronies reached a settlement in exchange
for immunity from prosecution. Intricate kinship relations, member-
ship in college fraternity/sorority, interlocking corporate board
directorates, common property holdings and other social and eco-
nomic ties link the pre-martial law elites and Marcos’s cronies. Such
ties prevent them from totally clipping their powers or from annihilat-
ing each other, even as they compete for profits, power and prestige
(Angeles 1995).11 The resilience of the elite families who supported the
Marcoses was very striking. A large percentage of the elected House
of Representatives in 1987 and 1992, under President Aquino and her
successor, President Ramos, were composed of Marcos-identified sup-

porters during martial law and intricately connected networks of a few
political families (Gutierrez 1994). The ability of the pro-Marcos elite
faction to make an easy comeback became even more pronounced
under the administration of President Estrada, who served for several
consecutive terms as mayor of Manila under Marcos.
The second factor is the character of state-civil society relations in
the Philippines. While civil society has played an important role in
testing the state’s limits in forging social transformation and democra-
tic consolidation, it has not effectively learned to ‘permeate, access and
engage the state… [which] entails greater political adeptness and
maturity in penetrating state policy-making institutions’ (Wui & Lopez
1997: 1). The various legal mechanisms and organizational venues for
active civil society participation, however, are hampered by a number
of procedural problems and structural obstacles that limit participation
and utilization by the public. In the first place, some of these laws work
against the interests of some civil society groups, such as the continued
eviction of slum dwellers and the decree criminalizing squatting on
private and public lands (Angeles 1997: 107–100; Elago 1997:
113–124). At both levels of policy-making and implementation, the
avenues for citizen participation are limited by lack of transparency,
poor dissemination of information, lack of consultation, lack of
financial resources and over-centralization of decision-making on the
part of the state. On the part of civil society, the weaknesses are under-
utilization of existing avenues, the lack of technical expertise, poor
organizational capacities, fear of co-optation by and general distrust of
the state and ideological differences that hamper coordination, collab-
oration and taking a united position towards government (Wui &
Lopez 1997: 5–18).
These problems and weaknesses are particularly striking in the case
of state-civil society interactions in the policy areas on agrarian reform
(Villanueva 1997), trade, taxation and fiscal policy (Cajiuat & Regalado
1997; Gutierrez 1997) and rights and welfare of migrant workers (Tigno
1997; Villalba 1997). In contrast, women’s groups achieved relative
success in the passage of the anti-rape law (Reyes 1997) and local-level
implementation of women’s reproductive heath programs (Pasion
1997). Women’s issues receive more attention from legislators because
these are seen as soft issues and not directly threatening to the interests
of big power brokers. On the other hand, national policy areas like
agrarian reform or taxation and fiscal policy reform are controversial
issues which involve a direct clash of interests between the poor and
the economic elites. There is often no solid and widespread public

support for these issues, as local organizations are either polarized in
their respective positions, or in some cases, disinterested because these
issues seem to be highly-technical debates that have no direct impact
on local communities. For example, Congress blocked the proposal for
a more progressive tax regime under the Comprehensive Tax Reform
Package due to the strong anti-reform lobby of the business commun-
ity. There was also a lack of widespread public support from NGOs and
population groups that stand to benefit from the tax reform, particu-
larly fixed income-earners, wage workers and low-salaried professionals
(Gutierrez 1997).12 The state and civil society, of course, have mutual
distrust and ambivalence towards each other. The negative perception
of the state by civil society is borne out of its direct past experiences in
dealing with the state that is largely seen as corrupt, inefficient and
lacking the autonomy to mediate conflicting elite interests and uphold
the public good. This cynicism had deepened under the Marcos regime
and the Estrada administration. Although the Aquino, Ramos and
Arroyo administrations were more open to the democratization
process, they also attempted to use civil society organizations to create
their own base of political support and marginalized those critical of
their policies. The Estrada government did the same, but ironically, its
bad policies brought a considerable degree of unity and cooperation
among opposition groups that were alienated by the government.
Indeed, ‘the weakness of the Philippine state is reflected in the relative
strength of Philippine civil society’ (Miranda 1999: 165). However, civil
society organizations are also considerably weak in effecting policy
changes, not so much because they have no alternative programs, but
because of lack of state and social support.
The third factor relates to the character of the Philippine bureaucracy
in the delivery of social services. All post-war governments have pro-
claimed poverty alleviation and agrarian reform as the centrepiece of
their administration. Poverty alleviation programs are integrated into
the delivery of basic social services through the various government
line agencies and advisory bodies.13 The Aquino government specific-
ally mentioned poverty alleviation in its Medium-Term Development
Plan, but it was not until the Ramos administration that a com-
prehensive and coherent anti-poverty reduction framework emerged:
the Social Reform Agenda (SRA).14 The SRA uses the following strategies
to achieve its goals: promote and sustain economic growth to create
employment and livelihood opportunities, sustain growth based on
people-friendly strategies, expand social services to provide minimum
basic needs and build capacities of the poor. The future of the SRA was
sealed when the Estrada administration created its own poverty allevia-
tion strategy, thus, refusing to support the continued implementation
of SRA by government line agencies.
The post-war delivery of social services has been historically ham-
pered by the perennial lack of resources because of the narrow tax base
and priorities given to other government programs. In areas like educa-
tion and agricultural credit where fund allocations are relatively high
and comparable to other Asian countries like Malaysia and Thailand,
the delivery of basic services are often characterized by inefficiency and
inability to partner with and mobilize local communities, NGOs and
the business sector. There is a lack of continuity in the implementation
of good programs, as seen in the uncertain fate of SRA under the
Estrada administration, largely because of the egos of presidents and
bureaucrats who would rather see old programs die and create new pro-
grams to build their political capital. More importantly, the SRA
program is limited in its view of how the organizing and capacity
building of the poor in general and poor women in particular, could be
harnessed for policy-making and program implementation. Capacity
building of the poor appears to have been narrowly understood in the
Agenda as synonymous to leadership training accompanied by the
formation of people’s organization and their assistance by voluntary
organizations. However, these human resource development strategies
are necessary but not sufficient conditions for poor people’s involve-
ment in participatory governance. They need to be combined with the
enlargement of decision-making powers by the poor and their involve-
ment in policy-making and program implementation and integration
of gender analysis, at the local and national levels.15
A good case to illustrate this is the provision of agricultural credit
and loan guarantee schemes. In the 1960s–1980s, the government
directed subsidized credit programs for farmers, such as the Masagana
99 (rice productivity) and Maisagana (corn productivity) programs of
the Marcos government. Some directed credit programs were elim-
inated in the late 1980s because of the burden of paying for loan
defaults and interest rate subsidies. The government also used loan
guarantee schemes as a policy tool for job creation, housing and
improving agricultural and industrial productivity.16 These programs
were criticized for being ineffective in reducing poverty, for their
negative effects on investment and production decisions and for weak-
ening financial institutions’ role in serving as intermediaries between
savers and borrowers.17 A 1997 study documented the waste of public
resources involved in the complex implementation of directed credit

programs,18 particularly in the top 20 of these 86 programs in 1997,
which have not been effective in assisting the poor (Lim & Adams
1998; Llanto et al. 1997).19 A 1998 study on three loan guarantee pro-
grams for small businesses and farmers concluded that their outreach
has been limited, with no positive impact on poverty reduction
(Orbeta et al. 1998: 9).
The main weakness of many social safety nets and poverty allevia-
tion programs in the Philippines, like the existing mechanisms for par-
ticipatory governance, is that they are not reaching or being utilized by
the poorest of the poor. The poor are still largely too unorganized and
disorganized to be able to push the limits of both civil society and the
state to recognize the need for their participation and empowerment.
For example, while there is an increasing realization that people’s
organizations can serve as effective institutions for credit provision
(Llanto et al. 1998), micro-credit programs are still largely run by inter-
mediary NGOs on behalf of grassroots organizations. Perceptions of
some NGOs by poor people were not positive, according to particip-
atory poverty assessment results (Narayan 2000: 136–141). Capacity-
building and strengthening of grassroots organizations are still in their
infancy. Their interventions are often limited, with low sustainability
and marred by petty politics. Many NGOs remain dependent on
foreign donor-driven projects and in some cases, the availability of
funding opportunities have either created ‘fly-by-night’ NGOs, or
diverted attention away from organizing and developing closer part-
nerships with communities.
Lastly, the structures and dynamics of state-elite and state-civil
society relations in the Philippines have shaped the character of the
local and national political cultures. The political culture that breeds
extreme familism (or nepotism in public office), patronage, low trust
and a weak sense of the public interest, remains inimical to value-
formation, the exercise of citizenship and to the process of nation-
building (Zialcita 1997; Doronila 1997; Karaos 1997). Thus, Filipinos
are generally observed to have an inferior national identity complex, a
low regard and respect for public property and spaces and a generalized
disinterest in the performance of civic duty. The multi-cultural, multi-
ethnic, multi-linguistic and multi-religious character of Philippine
society, compounded by centuries of national political discourse in
foreign languages (first Spanish and then English) also presents chal-
lenges to the consolidation of democracy and citizenship. These chal-
lenges prevent states, elite groups and civil society from engaging in
collective efforts to solve their common problems. Hence, they require

interventions not only in economic policy and development planning,
but also at the social and political levels.
Policy and political requirements of community

empowerment
Poverty breeds misery and dependency that prevents one’s perform-

ance of civic duty and exercise of citizenship, which are essential to
grassroots democracy and empowerment. The economic policies
required for poverty reduction have already been explored in a number
of studies (Paderanga 1996; Ferreira et al. 1993; Balisacan 1999). Thus,
the discussion will focus on the political and non-economic policy
requirements of sustainable poverty reduction through community
empowerment and exercise of participatory grassroots democracy.20
The existing policies of participatory governance under the 1991
Local Government Code (LGC) must be reviewed and strengthened so
that there is greater public awareness of its provisions and mechanisms
for popular participation, especially by organizations of poor people,
small farmers, urban street vendors and others. There should be co-
operation between state and civil society groups in assisting poor
people to create their independent organizations. Provisions under the
LGC could be strengthened so that policy setting and implementation
of programs on poverty reduction could include the broadest repres-
entation of all stakeholder groups and the involvement of grassroots
organizations in local governance. They could be involved in areas of
governance such as fiscal policy, budgeting, land use and industrial
policy, especially towards foreign and local investors that make use of
local or community resources. The state and civil society groups would
benefit from inputs and support from farmer and fisher folk organiza-
tions and NGOs, especially those promoting community-based natural
resource management, agrarian reform and industrial co-management.
Communities most affected by resource extraction by domestic and
foreign capital should be given the powers to negotiate with the local
and national government the terms under which they would accept
new investment schemes. States, local communities and businesses
should have a mutual interest in maintaining well-defined negotiation
rules and minimum labour standards to enhance the productivity
gains induced by stable industrial relations (Angeles and Magno 2001).
Using participatory governance in improving the local tax collection
systems could help restructure the national tax administration, as well
as the national budget and fiscal policies. An efficient and progressive

taxation system could provide welfare transfer to highly vulnerable
social groups and expand the tax base through increased direct tax-
ation of wealth and less use of indirect taxes. This move would require
gradual implementation and widespread public campaigns to get
massive political support as it would likely face intense opposition
from business lobby groups, landlords and other state-based rent-
seekers. This would require a strong political will on the part of the
government to demonstrate to opposition groups that a progressive
taxation policy to strengthen social programs would be beneficial to
business interests by raising overall ‘social capability’, particularly its
educational, institutional and organizational components (Abramovitz
1986). Domestic consumer demand could be stimulated and local
markets expanded through an effective, pro-poor social development
agenda that would develop human resources, provide on-the-job train-
ing and engage the poor in local resource mobilization through small
rural and urban enterprises and expanded micro-credit, strong co-
operatives and similar programs.
The above institutional reforms for active participatory governance
could only succeed if there is a competent democratic government; as
well as equally competent, democratic and progressive communities of
NGOs and civil society organizations that would work together to
reach creative solutions to common problems. There is a need for
strong inter-government agency coordination and cooperation with
local communities in the delivery of social programs to tackle poverty
reduction. The approach should move away from the beneficiary
model to the creation of an enabling environment to support programs
aimed at developing the capacities and entrepreneurial energies of poor
households and communities. On their part, labour unions, farmer
organizations, advocacy groups and NGOs need to re-examine the
factors behind the splintering of their ranks, internal ideological differ-
ences and other weaknesses that led to poor influence on the legislat-
ive agenda. Government agencies and officials also need to examine
their role in exacerbating such weaknesses and their poor bureaucratic
operations.
The success of institutional and political reforms would also require
an active, well-informed and well-educated citizenry, especially among
the youth. Herein lies the importance of the educational system to the
exercise of citizenship rights in the political, economic and social
spheres and to making poverty studies and interventions a core part of
the school curriculum. A restructuring of the educational system is
needed to make it more socially relevant, by emphasizing locally-

specific market and community needs and a community economic
development orientation so that universities, colleges and schools
could develop their capacity to assist communities in solving local
problems. The public school education system could provide more
resources for teacher training, curriculum development and scholar-
ship programs to students from poor families. The mobilization of
teachers, students and school administrators is crucial in a restructur-
ing that would reorient the curriculum to emphasize analytical, tech-
nical and problem-solving skills. It is also critical in realigning national
science and technology policies with educational needs, creating
nation-wide programs for teacher training; and modernization of edu-
cational facilities, especially the use of new information and communi-
cation technologies.21
Priority could be given by development agencies to assisting local
communities in their organizing and capacity-building efforts around
poverty, welfare and sustainable livelihood issues. At present, many
development agencies like CIDA and USAID prefer to work with the
government and closely connected intermediary NGOs. CIDA, for
example, has channelled more of its bilateral aid to government capac-
ity-building in the post-Marcos period than to NGOs and other civil
society groups, except for a few programs such as the Canada Fund,
Promoting Participation for Sustainable Enterprises (PPSE) and the
Philippine Development Assistance Program (PDAP). There needs to be
increased attention to lobbying by civil society groups in ensuring that
international development programs include their inputs and par-
ticipation in their design and implementation. On their part, interna-
tional development agencies could rethink their preference for working
mainly with governments in governance issues and hesitance to work
directly with local communities. They could make it a requirement for
the government to partner with NGOs and grassroots organizations
with long-standing records of assisting poor communities rather than
with ‘fly-by-night’ or quasi-government NGOs that are closer to big
business interests only.
Prospects for promoting community empowerment and

grassroots democracy: connecting, policy, poverty
reduction and civil society
The discussion above underscores the policy and political requirements

for community empowerment and grassroots democracy to become an
effective means of poverty reduction. However, attention should be

paid to the more fundamental attitudes and ideologies that inspire
governments, corporations and some civil society forces to prioritize
market over social needs, thus producing not only a market economy
but also a market society. There is an increasing realization among eco-
logical economists that poverty is not the underlying problem, but
merely the symptom of a more fundamental malaise in our society
which is the promotion of market-oriented growth that aims at
increasing productivity and incomes, not the improvement of human
welfare and well-being. As life in the affluent West and among the rich
in the South has shown, there is no necessary correlation between
increased wealth and incomes and improved public welfare. The cre-
ation therefore of a sustainable future for the planet depends primarily
not only on the reduction of poverty or provision of basic needs, but
also on the emphasis on quality of life rather than on increasingly
higher material standards of living. It also depends on global redistrib-
ution of means of production, devolution of power and increased self-
reliance of communities and organizations on a smaller scale (Deval &
Sessions 1985; Naess 1984). It also depends on the global, regional and
local respect for and operationalization of sustainable development
principles (Bello 1997: 158).
The ability of some North American, West European and East Asian
countries to institute various social policies and programs eventually
contributed to reducing high rates of absolute poverty. 22 History shows
that these policies and programs would not have been in place without
the support of the middle classes and elite groups which felt threat-
ened by the possible consequences of popular social unrest that thrives
on the immiserization of the majority (Toye 1999). Asian countries
would have to follow a different historical path, but not without the
support of the intellectual and political economic elite groups who
have a role to play in social transformation. Social and economic elites
in Asian countries could no longer afford to remain adamant in pre-
serving their wealth, power and privileges. They could use part of that
wealth and privilege for the purpose of creating a vibrant civic society,
better quality of life and welfare for the poor. This quality of life
derives not so much from higher incomes but from upholding public
welfare and interest in safer neighbourhoods, decent jobs that fulfil
basic human needs, cleaner air, healthier water and food supply and
cooperative communities. These elites in fact, stand to lose more in the
event of violent social upheavals and also to gain the most from stable
social environments.
This reclaiming of the ‘public interest’ and the ‘public realm’ seems
like a hard sell in the face of intellectual cynicism towards the so-called
‘phantom public’ (Lippmann 1925). The collapse of centralized com-
munist states, the power of neoliberalism in re-shaping social programs
and ‘the rhetoric of privatization – that government can do no right –
distorts the possibility available for creating democratic publics by
assuming that all government, not just bad government, is the
problem’ (Eisenstein 1998: 25). This erodes the idea of any forms of
public responsibility for health, education, housing and pension,
which are increasingly seen as market commodities and not as public
goods. Thus, social movements need to recognize the power of ideas in
organizing people to reclaim the public realm as both, an ‘imagine idea
– an attitude and a real place where people are interconnected, have
individual freedoms and are still able to uphold their responsibility
towards each other’ (Eisenstein 1998: 5–6).
A serious reclaiming of the public must be accompanied by a
rethinking of what Asian regional cooperation, grassroots participation
and North-South partnerships really mean. Instead of allowing regional
competition to bring down barriers to inter/intra-corporate trade, an
alternative form of regional integration could address common prob-
lems that destroy the environment and people’s welfare, for example,
when MNCs move into low-cost areas. Common regional labour and
environmental codes with tight and uniform standards; as well as a
‘people-based economic bloc’ could be developed to connect trading
communities or regions directly, thus eliminating high transactions
costs and cuts of corporate middle-men. Mechanisms must be devel-
oped within these forms of co-operations so that the initial disparities
or cleavages arising from comparative advantages and division of
labour do not lead to permanent cleavages, but instead enable the
weaker trading communities to develop their internal capacities (Bello
1997: 158).
Community empowerment and grassroots democracy could become
effective tools of sustainable poverty reduction. This happens when
communities, particularly its poor and underprivileged members, are
empowered to use their democratic rights not only to press for individ-
ual and collective rights and freedoms, but also to reinvigorate the
notion of public good and social responsibility. Only then can we have
a truly civil and civic society where democracy does not only mean
elections and political parties, where the term ‘grassroots’ does not get
equated with the poor, where empowerment of the poor does not
mean dictatorship of the proletariat and where communities, both
virtual and real, truly care and work together to aspire to the common
good.
Notes
1 I am grateful to Jayant Lele and Lawrence Surendra for comments on the
first draft of this paper and to my colleagues at the Center for Human
Settlements, University of British Columbia, especially Peter Boothroyd for
his valuable insights and skills in re-framing important development ques-
tions. This paper has benefitted from participants in the ‘Democracy and
Civil Society in Asia: The Emerging Challenges and Opportunities’ Inter-
national Conference held at Queen’s University, 19–21 August 2000 and
the ‘Sustainable Poverty Reduction Through the Democratization of Plan-
ning’ workshop held at the University of British Columbia, 15–17 June
2000. I also thank the Social Science and Humanities Research Council of
Canada for financial assistance, Steffanie Scott for sharing readings, and
Cynthia Banzon-Bautista for sharing materials and insights on the
Copenhagen Summit.
2 Toye (1999: 6) argues that this may be the start of a development era based
on multidisciplinary poverty research, where there is a decline of economics
as the ‘dominant discipline’, and the increased importance of political
science and other disciplines in poverty discourses, relegating poverty eco-
nomists to ‘play the role that Keynes once envisioned for them, similar to
that of humble but competent dentists’.
3 These include, for example, the AGENDA 21 document from the 1992 Rio
Conference on Environment and Development, and the 1995 Beijing
Platform of Action for Women.
4 For good introduction to participatory development, see Nelson Wright
(1995); Chambers (1997); Fals-Borda & Rahman (1991); and Burkey (1990).
5 The World Bank defined governance as ‘the manner in which power is exer-
cised in the management of the country’s economic and social resources for
development’. Good governance therefore is ‘epitomized by predictable,
open, and enlightened policy-making (that is, transparent processes); a
bureaucracy imbued with professional ethos; an executive arm of govern-
ment accountable for its actions; and a strong civil society participating in
public affairs; and all behaving under the rule of law’ in World Bank (1994:
vii).
6 On the intellectual origins of social capital, see Harris & De Renzio (1997).
7 As a result of the Asian economic crisis, Philippine unemployment rates
increased from 10.4% in April 1997 to 13.3% in April 1998, while underem-
ployment rose from 19.4% in 1996 to 20.8% in 1997 and 23.7% in 1998.
The crisis also reduced the number of overseas contract work in the East
Asian region, affecting many Filipino families dependent on remittance
money from abroad. The deployment of Filipino overseas contract workers
decreased, by 18.3% in Hong Kong (64,160), by 16.7% in Singapore
(13,373) and 65.7% in Malaysia (4,660), while deployment to the Middle
East slightly increased by 2.6%. Remittances of overseas workers declined by
13.4%, from $5.15 billion in January–November 1997 to $4.46 billion
during the same period in 1998. Retrenchment of industrial workers
increased, thus exacerbating the already low real wage levels and unequal
income distribution. The income share of the poorest 10% of the popula-
tion declined by 7.3%; while 17% of families expected reduced wages in
1998. Poverty incidence decreased from 35.5% in 1994 to 32.1% in 1997,
but the absolute number of poor families increased by 22,217 to 4,553,387
families, 70% of which are based in the rural areas (Reyes et al. 1999:
24–35).
8 For example, a PO or farmer organization such. Kilusang Magbubukid ng
Pilipinas or Peasant Movement of the Philippines may be assisted by an
NGO like Philippine Peasant Institute.
9 For example, development-oriented organizations have created CODE-
NGO in 1991. Another example are NGOs and POs that have formed part
of the 15-year old Freedom from Debt Coalition (FDC) which links poverty
issues in the Philippines to the foreign debt and structural adjustment
programs. Other examples are the Alliance of Philippine Partners for
Enterprise Development (APPEND) and PHILNET, two networks that link
local credit-granting NGOs and grassroots community self-help groups and
cooperatives.
10 Article XIII, Sec. 16 of the 1987 Constitution proclaims, ‘The right of the
people and their organizations to effective and reasonable participation at
all levels of social, political and economic decision-making shall not be
abridged. The State shall by law facilitate the establishment of adequate
consultation mechanisms’.
11 For example, it is well known that Eduardo Cojuangco, Marcos’ crony, is
Corazon Aquino’s first cousin. Fidel Ramos is Ferdinand Marcos’ second
cousin.
12 The Comprehensive Tax Reform Package would have created a more pro-
gressive tax regime by restructuring individual and corporate income tax,
improving tax administration, and removing tax evasion and tax shelter
privileges of the business sector. See Gutierrez (1997).
13 The government line agencies directly involved in service delivery for the
poor include the Department of Social Welfare and Development (DSWD),
Department of Education, Culture and Sports (DECS), Department of
Health (DOH), Department of Labor and Employment (DOLE), Department
of Trade and Industry (DTI), and Department of Finance (DOF). Those in
the policy advisory group such as the National Anti-Poverty Commission
(NAPC), National Commission on the Role of Filipino Women (NCRFW),
Agricultural Credit Policy Council (ACPC), etc.
14 The 1994 Social Reform Agenda (SRA) is the umbrella framework for
poverty alleviation created under the Ramos administration. It utilizes the
‘minimum basic needs’ (MBN) approach based on the principle of ‘compre-
hensive and integrated delivery of social services’ (CIDSS). It is built on the
following five principles: (1) a continuing and coordinated effort; (2) part-
nership between government and the private sector; (3) provision of
minimum basic needs to disadvantaged groups; (4) explicit targets and
commitments; and (5) a conducive policy environment for a sustainable
implementation. The seven disadvantaged target beneficiaries for the SRA
are (1) farmers and landless agricultural workers, (2) fisherfolk, (3) urban
poor, (4) indigenous cultural communities, (5) informal sector workers,
(6) others including women, youth, disabled and elderly, and (7) victims of
disasters and calamities.
15 On participatory governance and gender implications of the Social Reform
Agenda, see Angeles (2000, 2002).
16 As of mid-1998, there were 6 government-sponsored loan guarantee pro-
grams directly assisting small businesses, agricultural producers, and home-
owners: (1) Guarantee Fund for Small and Medium Scale Enterprises
(GFSME); (2) Small Business Guarantee and Finance Corporation (SBGFC);
(3) Quedan and Rural Credit Guarantee Corporation (Quedancor);
(4) CARP-Credit Guarantee for Agricultural Landowners; (5) Fisheries Sector
Program of the Philippines Crop Insurance Corporation (PCIC-FSP); and
(6) Home Insurance Guarantee Corporation.
17 The USAID and the World Bank supported these criticisms of government
rural credit programs that discouraged deposit mobilization and efficient
resource allocation and viewed directed credit as counter to the new
market-oriented development paradigm, as opposed to central state plan-
ning. See Lim & Adams (1998: 2–3).
18 Directed credit programs actually expanded from 68 in 1992 to 86 in 1997,
although the amount of subsidies decreased. Of the top 20 of 86 programs
in 1997, a study revealed that 7 programs, which accounted for 12.3% of
loans for the 20 programs, are funded by the national government and the
rediscounting windows of the Central Bank. About 13 programs, which
accounted for 87.63% of loans, were funded by foreign multilateral agencies
such as the World Bank, Asian Development Bank, Overseas Economic
Cooperation Fund and the Export-Import Bank of Japan. These funds were
managed by the Development Bank of the Philippines (DBP) for manufac-
turing enterprises; the Land Bank, Department of Agriculture, and
Agricultural Credit and Policy Council for rural credit and food productivity
programs. See Llanto, et al. 1997; Lim and Adams (1998: 1–2).
19 The above study of the top 20 directed credit programs revealed these
findings: (1) The government assumes large expenses in terms of interest
and default subsidies (1.897 billion pesos in 1996 for the 20 programs).
Government agencies and non-financial conduits (cooperatives, NGOs, self-
help groups) assisting farmers, fisherfolk and micro-enterprises use the bulk
of these subsidies to cover administrative and operating expenses, transac-
tion costs, and payment defaults; (2) The credit programs have large default
subsidies, indicating that they may not be that effective in helping the
poor; (3) The poor borrowers are subsidized for defaults while other end-
borrowers are given market rates, or more appropriately ‘cost recovery
rates’. In other words, many non-poor end borrowers pay relatively high
interest rates comparable to prevailing market rates, which they would have
received without the credit programs; (4) Deposit mobilization is discour-
aged because of the presence of rediscounting facilities or loans with low
interest rates. In Lim & Adams (1998: 1–3); Llanto, et al. (1997).
20 The recommendations are drawn from Angeles (2000b, 2001, 2002a;
2002b).
21 The recommendations of the 1991 Congressional Commission to Review
and Assess Philippine Education (EDCOM) have yet to be pursued. These
include adjusting curricular relevance to the labour market, and improvement
of quality of teachers through salary increases and incentives to teachers to

develop teaching skills, and attract bright students into the teaching profes-
sion. See Cortes and Balmores (1992).
22 What is disappointing is that much of these welfare/social programs are
now being eroded in countries with neo-liberal and neo-conservative
governments.
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9
Civil Society and Good
Governance: A New Chapter in
Thailand’s Political Reform?
Chantana Banpasirichote
Introduction
The Asian economic crisis of the 1990s raised some fundamental ques-
tions about the future of politics and economic development of the
region. Much of the analysis in the past had pointed to the fact that
although Southeast Asia had achieved high levels of economic growth,
political development had lagged far behind economic success. The so-
called East Asian development model claimed a clear link between eco-
nomic growth and semi-authoritarianism, which contradicted the
Western neo-liberal notion of compatibility between economic devel-
opment and political democratization. These differences in views are
also reflected in the contradictory analyses of how the crisis emerged.
Neo-liberal analysts claim that the failure to introduce pro-market
reforms strengthened prevailing cronyism, which eventually led to the
economic crisis. A vast majority of Asian academics believe, however,
that too much and too rapid liberalization, resulting in a highly specu-
lative and irrational market, contributed to the collapse of the financial
institutions in the region. Some of them also claim that the current
process of political liberalization played a role in deepening the crisis.
In much of Southeast Asia rapid democratization, which took power
away from the state, made government institutions incapable of
changing the direction of the economy (Lim 1998; MacDonald 1998).
Thailand does not fit too well into this debate because of its history of
democratization and the presence of a constitutional democracy for
some 15 years before the crisis. Its political system is characterized not
by the absence of democracy, but rather by the persistence of ‘bad
politics’, which has negatively impacted its ability to manage the
213
214 Civil Society and Good Governance
economy. The report of a committee investigating the financial crisis

indicated that poor decisions made by the Bank of Thailand made it
almost impossible for the country to escape the financial turmoil.
Given the lack of transparency and public accountability, the Bank was
able to ignore the early warning signs and could refuse to quickly
respond to the growing crisis with appropriate policy measures. In
other words, the absence of good governance was one of the most
important contributing factors.
This chapter reviews how civil society became involved in social and
political reforms to achieve good governance. It argues that although
economic crisis provided an important impetus, the emergence of civil
society has been a historical process during which anti-state conscious-
ness was continuously raised. The collective popular response to the
crisis was not spontaneous. It was based on the prior construction of
social networking resulting from previous social and political actions.
The financial crisis enabled civil society groups to press the demand for
a well-defined political reform program. Yielding to such pressures, the
government began to address such crucial issues as corruption, crony-
ism, transparency and accountability.
How well these initiatives of civil society towards good governance
will be nurtured in the political culture and tradition of Thai society
remains to be seen. So far Thai development has not overcome the
widening social and economic gap. Hence, major challenges for the
emerging civil society lie in its ability to break through the traditional
asymmetry of its relation to the state.
The dynamics of civil society in Thai bureaucratic polity
Modern Thai politics has a rather short history. As seen in Table 9.1,
civil society emerged in the last 50 years through a series of popular
movements that aimed at democratizing the state in Thailand. The
earliest even dates back to 1932 when, as a result of popular
demand, a constitutional monarchy was installed. That was the first
stage of Thai liberal democracy. It did not produce the expected
reform of the power structure. Politics remained in the hands of a
small power elite. After almost 50 years of political repression the
state became quasi-democratic around the 1980s. The constitutional
reforms of the mid-1990s mark the latest stage in the process of
democratization. Each one of these changes was associated with
events of political mobilization, some peaceful and others blood-
stained (as in 1932, 1973, 1976, and 1992).
Chantana Banpasirichote 215
However, the legacy of a highly centralized state and bureaucratic

polity continues. The entire process of political change has involved
the simultaneous presence of competing bureaucratic and extra-
bureaucratic polities. The expansion of extra-bureaucratic polity
opened up a few political spaces. Although it has been subject
to ongoing challenges, the state has managed to keep the extra-
bureaucratic polity confined within the civil sector. Citizens, by and
large, still remain marginal to the political arena. By the second
half of the 1990s, a ‘bourgeois democracy’ had begun to emerge
(Bunbongkarn 1996: 106). Until then a form of corporatism had pre-
vailed in state-civil society relations. Since the promulgation of the
new constitution in 1997, when the new phase of political reforms
began, civil society has been systematically challenging the actions
of the state and is trying to monitor them through the new system
of multiple checks and balances.
Today the government administration remains highly centralized
and operates within a paternalistic political culture. Civil society has
emerged as an extra-bureaucratic force within a political environment
where the non-state actors have not managed to become fully institu-
tionalized within the political process. Hence we witness the presence
of two competing forces, as bureaucratic and extra-bureaucratic poli-
ties. A student movement first led the growth of the extra-bureaucratic
force. It seems to have been taken over today by the business sector.
Anek Laothamatas (1993) suggests that business associations are now
outgrowing the bureaucratic polity through extra-bureaucratic means
of corporatism. However, Anek still does not see this as signaling an
overall change in the tradition and culture of Thai politics.
These transitions in Thai politics have not been discontinuous.
Each political incident of the past produced a generation of active
citizens, many of whom became important catalysts for subsequent
political actions. For example, those involved in the student uprising
of October 14, 1973 and in the incident of October 6, re-emerged as
the proponents of the re-democratization process and were involved
again in the May Incident in 1992. The student activists of the past
who had fled into the jungle under conditions of political repression
in the 1950s became gradually integrated into the new booming
economy in the second half of the 1980s. That generation of former
student activists now forms a part of the new middle classes. They
took an active role in the 1992 political up-rising, as the ‘mobile
phone mob’. That ‘May Incident’ of 1992 was an important trigger
for political reforms in 1997 leading to broader public participation.
A large spectrum of political activities, by diverse civic groups across

the country, has contributed over the years to the growth of civil
society in Thailand. Such political actions have provided an impor-
tant learning process that was essential for the dramatic expansion
of civil society that was witnessed in the 1990s. The new consti-
tution and political reform that came as a result are, therefore, only
a beginning of legitimized people’s participation in Thailand’s
politics.
Democracy still lacks popular legitimacy though it was implanted
and nurtured in Thailand by popular movements. Politics is still
suspect; elected representatives cannot claim public trust because of
bad or money politics through which politicians enter the political
market. Even the multiple mechanisms of checks and balances,
provided by the new constitution, such as the Constitutional Court,
the National Election Commission (NEC), the National Counter-
Corruption Commission (NCCC), are subject to scrutiny, suspicion and
criticism. At the same time, direct public participation is also not well
received by the general public. It is feared that all political actions are
motivated by the vested interests of rival political parties. Even civic
actions against state policy are suspected, for being masterminded by
elites with vested interests. As a result, democracy in Thailand is still
rather fragile. The political atmosphere is clouded with distrust given
the dominance of patron-client relations even in modern organiza-
tions. One must hope that the exercise of multiple checks and balances
can work, over time, as a learning process through which the society
will transcend its distrust of politics.
The political reforms of 1997 mark a new turning point in the
development of civil society in Thailand. Popular movements, repre-
senting a new political culture, are still battling with the old politics
of elite power. The implementation of the new constitution, invol-
ving recruitment of commission members, drafting of organic laws
and enforcement of other constitutional provisions, has itself
become a platform for competition over the newly created political
positions. The meanings of the ideas enunciated by the constitution
are also in contention. Pressure politics continues to be the only
viable alternative to traditional parliamentary politics. So far, it has
failed to establish a smooth relationship with the parliamentary
system. As a result, pressure politics, now practiced mostly by the
progressive elements in civil society, is walking a thin line in trying
to maintain its legitimacy. Nonetheless, as a result of this tension,
the political culture is gradually changing.
Table 9.1 A Synopsis of Thai Political History and Dynamics of Civil Society
Year Important political events Dynamics of civil society
1932 • Change from Absolute • State initiated groups, for

Monarchy to Constitutional example, co-operatives,
Monarchy trade unions
• Democracy by the power elite
1948 • Establishment of communist • Underground opposition
party of Thailand (CPT) with an movement and armed
armed force (Thippaporn 1987) conflict
1959–1960s • Short period of developmental • State initiated groups, for
Sarit, state, authoritarian government example, co-operatives,
Thanom • Centralized planning trade unions, farmer
& Prapas • Strong bureaucratic polity groups
regimes • Corruption scandal • State mobilized
participation
• Continuing armed conflict
14 Oct. 1973 • The first student uprising • Student movement
against the authoritarianism • The Federation of Farmers
• Democracy blooming until 1976 Associations
6 Oct 1976 • Political violence, student • Right and left wings in
massacre and the return of civil society
authoritarianism • Violent conflict
• Right and left ideological • Student movement joins
conflict CPT
End of • Half-democracy (Jumbala 1992) • Emerging extra-
1970s–the • More liberalized polity bureaucratic polity,
beginning • End of armed conflict with the business in politics,
of 1980s CPT, amnesty state-corporatism
Kriengsak • 4th and the latest CPT General • Ex-student activists turned
and Prem Assembly (Dhitta 2001) (1982) to NGOs in community
Regimes development
• State-civil society
reconciliation
• The decline of communist
movement
Late 1980s • ‘Buffet Cabinet’, money politics • Expansion of business in
Chatichai (Bunbomkang 1996) and the politics, MPs and Cabinet
regime bubble economy members from business
• Legitimacy crisis of civilian sector
government • Strong NGOs in
• Return of the military coup-the environmental movement
National Peace Keeping • Politicization of
Council, 1991 environmental issues
Table 9.1 A Synopsis of Thai Political History and Dynamics of Civil Society –
Continued
Year Important political events Dynamics of civil society
17–18 May • Bloody May Incident, missing • Dominance of new middle

1992 victims in the protest against class in politics
the military coup • The legacy of 14 and
• ‘Mobile phone’ mob5 6 October student
• Re-democratization and movement triggers
political reform re-democratization
1996 • Constitutional reform process • Countrywide people’s
Banharn • Prevailing of bourgeois participation in
regime democracy (Laothamatas 1993) constitution drafting
• Competing elitist and populist • Consolidation of grassroots
version of democracy and radical democracy,
for example, the Assembly
of the Poor
• Localization of civic
actions on political reform
1997 • Economic crisis • Spontaneous civic groups
Chaowalit • The promulgation of the new on crisis
regime constitution • Good Governance and
• Decentralization in progress civil society as a ‘national’
strategy for economic crisis
• Legacy of bureaucratic polity • Sustained grassroots
and resistance to change movements against
‘national development’
scheme
• Formation of anti-
corruption
• civic network
• Corporate good governance
2000 • New political institutions • State mobilized civic
• New elected senates groups in national
• Public sector reform in the development planning
process exercise
• Representative vs. participatory • NGOs and grassroots
democracy movements
• Political atmosphere of distrust • NGOs and civic groups
interface
• Economic-nationalism in
civil society
Thai civil society: visibility and legitimacy
During the years of political repression opposition to state actions

often took the form of resistance and rebellion. In the early years of
democracy, legalized people’s organizations were mostly under the
control of the state. It often mobilized people’s participation and
encouraged formation of civic groups under its own patronage.
People’s autonomous organizations, demanding a role in policy and
political activities, were not allowed. Even the labour unions were
interfered with and dominated by the state and by official political
parties. This effectively weakened the overall labour movement. Civil
society emerged slowly during this period as a challenge to state power.
The student movements of the 1970s, environmental movements and
policy advocacy initiatives of the NGOs in the 1980s, the new middle
class mobile-phone mob in the May Incident of 1992, the Assembly of
the Poor of 1995 and the People’s Anti-Corruption Network as well as
several groups pushing for further political reforms in 2000, were all
part of this ongoing anti-state extra-bureaucratic political process. They
have all been the constituent elements of an emerging and developing
civil society.
During the early years non-state actors engaging the political and
policy arenas were to be found in two categories: student movements and
the NGOs. With greater political liberalization, student movements have
subsided. By the mid-1980s, involvement of business associations into
politics increased. This has transformed the traditional bureaucratic polity
into a new form of liberal corporatism. At the same time, the extra-
bureaucratic polity has also expanded in the form of a growing NGO
sector. With the recognition of an environmental crisis, a large number of
former student activists from 1970s became involved in environmental
NGOs which have become increasingly politicized, as a result. They now
constitute a major anti-state group. After the May Incident in 1992, other
new actors have emerged in the political public sphere. The Incident led
to constitutional and political reforms, under pressure from several civic
groups. After the promulgation of the new constitution in 1997, these
civic groups have persisted and new ones have emerged to monitor the
reform process. Among these are: the Campaign for Popular Democracy,
the Federation for Democracy, the Protection of Civil Rights and Freedom
Group and the Institute for Political Development. The constitution has
thus opened up a wider political space where civic groups can engage in
political campaigns and thus gain greater confidence while enjoying a
new sense of legitimacy.
Formal politics in Thailand continues to be dominated by a limited

elite. Corporatism dominates the political involvement of the business
sector while much of the remaining politics is still dominated by the
bureaucracy. The non-bureaucratic politics also appear to be dom-
inated by sections of the middle class. This has important ramifications
for an emerging contestation between the ideas of representative and
participatory democracy. Today, the lower classes constitute only a
mass base rather than a core group in the extra-bureaucratic polity and
in the actions directed at further political reform. Hence, they are not
noticeable in the formal public sphere. They have nonetheless pro-
vided a strong popular basis for some of these actions. The Farmers’
Federation of Thailand was, for example, an important organization in
questioning the legitimacy of the authoritarian government during the
1970s uprising. It had joined hands with the student movement. Its
demise came in the early 1980s after a sequence of assassinations of its
leaders. Labour unions were also a significant presence in the May
Incident of 1992. Farmers’ protests have re-emerged, either through
independent interest groups or in alliance with a number of NGOs
working for the protection of the environment and for autonomous
natural resource management. In 1995, a new and more effective
farmers’ protest emerged in the form of the Assembly of the Poor. It is
a large network of the victims of the large dams and of other large-scale
development projects (Banpasirichote 1998). The Assembly of the Poor
made the poor politically visible, after having been forgotten com-
pletely during the era of the bubble economy. It succeeded in refocus-
ing public attention on the discourse of poverty. Networking and
alliance building has now become an empowerment strategy of most
of the non-state actors. This organizational innovation, learnt from the
Assembly of the Poor, is seen as an effective symbiosis between the
interest-based groups (in this case, development victims) and the cause
groups (policy advocacy NGOs in particular), in order to gain greater
legitimacy for non-parliamentary politics.
Apart from these organizational innovations implemented by the
Assembly of the Poor and other alliances, there has also been a
welcome move towards addressing other complex issues such as cor-
ruption, lack of fair elections, community right to natural resources,
development justice as well as human rights and consumer protection.
These issues demand structural changes in the political economy and
call for a reform process leading to substantive democracy. In future,
relevant social action will have to stand simultaneously on two step-
ping-stones: deepening of democracy and social justice.
The Thai term for civil society, pracha sangkom (literally, the society
of the people) does not signify state, market and society as separate
entities. It expands the earlier conception of collective action as the
territory of student activists and NGO movements. Today its users
often include the state and some of the institutions of the market in
the idea of civil society. To many, civil society connotes consensus.
Praves Wasi, a respectable social critic, proposes a coalition of benja
parkee, or five partners in the civil society: the academic community,
the people, the NGOs, the government and the business. In most cases,
the idea of pracha sangkom is used by civil society activists to seek social
synergy rather than to mark a political territory distinct from that of
the state or the market. The constitutional monarchy also marks Thai
democracy as distinct. The symbolic influence of the King and the
institution of monarchy have, to an extent, contributed to the empha-
sis on consensus in the discourse on political community and civil
society. Chai-anan Samudavnija, for example, argues that there is
always a possibility, in the Thai political context, that the government
itself might get involved in the process of civic action. In practice, dif-
ferent actors, attributing different connotations to pracha sangkom
seem to use it primarily to justify their own political actions. For state
actors civil society has become a concept that valorizes a corporatist
relationship with the state, promotes consensus and calls for public
responsibility. This is currently the dominant perception of civil
society in Thailand.
Many of the grassroots organizations and environmental and polit-
ical reform NGOs do not find such corporatist relationship with the
state fruitful. Their experiences of cooperating with the government in
the past have not worked well. NGO representatives have often walked
out and resigned from different government initiated missions. Hence,
pressure politics through mass mobilization and public campaigns
through mass media are still the preferred approaches for the grassroots
movements. The bureaucracy and the urban middle class fear their
pressure politics because it tends to disturb the existing social order.
For the conservative majority population it also threatens the stability
of the government. Civil society, as pracha sangkom, seems softer than
the politics of pressure groups or of social movements. In turn, it tends
to delegitimize the grassroots movements engaged in direct action.
Actions of groups seeking protection of their own interests, although a
reality of democratic politics, also does not go over well in contem-
porary Thai society, which is still caught up in the unresolved debates
on the antagonism between and relative priority of national, local and
private interests. The dominant conception of civil society tends to

exclude radical grassroots movements as incompatible with the notion
of pracha sangkom.
If conceived more broadly, civil society may be seen as a contested
space where active citizens seek to exercise their own voice. It can thus
encompass conflict, confrontation as well as consensus, as possible
approaches to the relationship with the state. The dynamics of Thai
politics today can be seen as a tug of war between elitist and populist
conceptions of civil society. The new constitution captures both the
compromises and the unresolved conflicts between these two opposed
conceptions. This could be seen as being favourable for further evolu-
tion of democracy and yet, at the same time, rather discouraging for
the future expansion of civil society in Thailand. Given the continuing
domination of a paternalistic political culture geared to consensus at
any cost, this tug of war could generate a strong counterforce that may
challenge the demand from the popular sections of civil society for a
march towards substantive democracy. Even though civic actions are
encouraged by the new constitution, a large part of the society seems
to have some reservations about the consequences of broad-based
public participation. Many of the NGOs and civic groups that chal-
lenge state power and address structural issues are routinely dubbed as
too radical.
The situation today appears to be favourable of the evolution of a
healthy civil society, judging from the progress it has made since the
economic crisis and the start of political reforms in 1997. The change is
visible both in terms of quantity (diversity of groups) and quality
(engagement of complex issues). On the surface at least, things are
changing fast, triggered by the new constitution. This does not,
however, mean that the old power relations are rapidly changing. Even
though the political infrastructure for better public participation is in
place, people have also witnessed major abuses of the new constitu-
tional mechanisms such as public hearings and the provisions in the
new Information Act. High ranking bureaucrats and business represent-
atives have come to occupy the most influential spaces in the newly
established autonomous organizations such as the National Election
Commission, the commission on information disclosure, the commis-
sion on telecommunication or the commission on mass media.
The old bureaucratic polity also seems to be taking a new form in
order to control the new constitutional mechanisms of multiple checks
and balances. Despite the gains made in the reform process, it is clear
that the elite-mass divide has not lessened as a result. It produces
serious differences in the perceptions of civil society and about the

appropriateness of the different avenues for political action. This is also
reflected in the limited advances so far made in the transformation of
political culture. Although action groups have become more and more
vocal; many remain vulnerable to co-optation or suppression in the
absence of a broad citizen base.
Right wing populist and elitist groups are also very active in the
reform process and are attempting to undermine progressive elements
of civil society. The rural urban divide also affects the ability of Thai
civil society to have a positive impact on the state. While urban public
opinion appreciates the call for good governance, or for fighting cor-
ruption, it often seems indifferent to social justice issues. The strong
urban middle class bias of Thai civil society is clearly reflected in the
fact that the networks of the rural poor who have gained so much
strength in the past few years are still struggling to find enduring
support for their actions from the other sectors of society. A vast
majority of citizens still remains ill-informed about the political
process while the bureaucracy is afraid of any direct participation in
the form of people’s protests.
Good governance and the invention of Thammarat
The strongest reaction to the financial crisis came from the dominant
urban civil society segments, in the form of a demand for good govern-
ance. The Thai term for good governance, Thammarat (meaning ‘the
righteous state’), was invented by a group of academics from Thammasat
University who urged in a letter, written soon after the onset of the crisis,
demanding that the government apply the principles of ‘good govern-
ance’ in handling the crisis. It also insisted that Thai people must be able
to monitor the performance of the state and for that purpose need to
build a strong civil society. A few other terms have come in vogue so as to
counterbalance the centrality of the state as the main agent of good
governance. They are Thammapiban (governing righteously), Thammaraas
(righteous citizenry), and Suprasaatkarn (good public administration). The
term Thammapiban has become increasingly popular since it refers to
the quality of governing and not the quality of the state. Thammarat,
however, still remains dominant in public discourse. Neither of those
terms carries its own operational meanings. Both have been influenced,
in practice, by seemingly similar ideas found in the discourse of super-
national organizations such as the World Bank, the International Mone-
tary Fund (IMF) and the United Nations Development Programme.
The definition of good governance, spelled out by these organiza-

tions is generally understood as a mechanism to maintain efficiency of
a neo-liberal market economy. Five conditions promoted by those
international institutions are accountability, transparency, participa-
tion, predictability and efficiency. Kasian Thechapira (1998) observes
that there are at least three different versions of good governance in
circulation: the autocratic, the liberal and the communitarian. These
three versions hold different positions on power, market and demo-
cracy. The autocratic approach certainly emphasizes social order and
strong state command for clean politics while the liberal version sees a
broader involvement of civil society for a fair competition in the open
market system. The communitarian version focuses on people’s parti-
cipation to regulate both state performance and the influence of the
market to ensure social justice.
An explicit critique of the official version of governance comes from
populist scholars and grassroots activists. They claim that the call for
good governance does not address the structural problem of inequity
and, therefore, the poor do not see how it can be of any benefit to
them. On the contrary, its link to neo-liberalism excludes the consider-
ation of the poor and the underprivileged. The grassroots activists find
that Thammarat perpetuates the same national policy claims that put
the emphasis on national interest while sacrificing local interest. They
support their argument by pointing to the fact that good governance
advocates are mostly members of the elite from the new middle classes.
Some have therefore argued that Thailand needs the establishment of
democratic socialism for meaningful good governance (Ungpakorn
1998). Such a system of governance will allow grassroots organizations
to lobby the state for policy reforms (Sapsomboon 1998). For example,
labour unions had joined hands with the new nationalist groups to
challenge the policy of privatization of state enterprises, required
by the Asian Development Bank, because of anticipated higher eco-
nomic disparity due to the growing control of the market by foreign
companies.
Despite such contestations about its meaning and impact, good gov-
ernance was made a national strategy to respond to the crisis. A leading
advocate of good governance, Theerayuth Boonmee, added the prefix
‘national’ to good governance, as Thammarat hang chat, so as to
promote its acceptance by all. The emphasis on nationalism was added
in the hope that this ideology can help get the country out of the
crisis. Surichai Wungaeo (1998) points to the dangers of such national-
istic strategies. They could lead to another crisis instead of creating a
unity as expected. Nationalism, he argues, is a double-edged sword, as

demand for unity may result in the marginalization of a large section
of the population if the vast socio-economic disparities are not recog-
nized and addressed.
Civil society and the making of good governance
All the meaningful political changes in Thailand have occurred due to

the efforts of the people. The public sector reforms, for example, had
remained a mere rhetoric for a long time, until the mass media and
civic groups took them up as an issue, bolstered of course by the
influence of the super-national organizations like ADB, IMF and the
World Bank (Wesaraj 1996). Without constant pressure from the public,
the new constitution would have brought about no substantial differ-
ence in Thai politics. Normal electoral politics had failed to produce
results even after two general elections were held under the new rules.
Direct citizen actions, on the other hand, have at times produced an
effective response from the state over diverse publicly debated issues.
Table 9.2 gives a glimpse into the diversity of civic actions around a
mix of issues and identifies the main constituents of the various civil
service groups. These actions also point to diverse perceptions of good
governance held by different groups within civil society. These and
other NGOs are an important catalyst for civic action. However, they
operate under many adverse conditions. Thai NGOs are yet to be fully
recognized as legitimate political actors in their own right. Individual
actors within them are often invited to sit on government-initiated
task-force committees as experts. For their organizations, forming
alliances and networks seem to be the only way of gaining some
influence and legitimacy.
Although the number of civic groups is increasing, the pool of
activists remains small. The core members of all of these groups seem to
belong to the generation of activists involved in previous major polit-
ical events. Thailand is in a highly competitive situation of human
resources where the expansion of the political market has absorbed a
fair number of former activists into political parties. During the eco-
nomic boom, social activists were also hard to find because university
graduates were drained into the new economic sectors such as finance,
media, and information. Work in the social service and NGO sectors
was regarded as a ‘broken-hearted occupation’, intended only for those
disappointed with and frustrated by state policies. Policy advocacy
organizations have received far less support and attention from
226
Table 9.2 Civic Groups and Good Governance in Political Reform
Groups Issues Constitutional tools/organic laws
• Campaign for democracy (NGOs – • Democracy and ‘new politics’ – • NHRC

membership based with former and people’s politics • Rights and freedoms
present student activists) • Democratic consolidation
• Confederation for Democracy (former • Human rights and development
student activists and citizen groups) justice
• The Institute of Political Development • Corruption Bill
(mass communication businessmen,
academics and public intellectuals)
• Assembly of the Poor (grassroots • Development justice • Impeachment
organizations and NGO networks) • Alternative development • 50,000 signature for bill
• Anti-dam movement • Administrative court
• Accessibility to natural resources • Public hearing
• Victims of development • Information act
• Against resettlement scheme • NCCC
• Standing committee for
the house of representatives
• NHRC
• The new elected Senates
• Union for Civil Liberty (NGO) • Decentralization\local government • Steps and Plans for
• Foundation for Local Government • Local election campaigns Decentralization Act
(former high ranking officials) • Recruitment of new blood into politics • Local Government Act
• Women’s Network for the Constitution • Women in local and national politics
(academics and NGOs)
Table 9.2 Civic Groups and Good Governance in Political Reform – Continued
Groups Issues Constitutional tools/organic laws
• Anti-corruption campaign • Information Act

• Transparency International (Thailand (monitoring and scrutiny) • Constitutional Court
Chapter – mostly academics) • NCCC
• 30 NGOs Network for anti-corruption
• The Protection of Rights and Freedom
Group (former student activists)
• The Construction Development
Committee
• People’s network for elections – • Election monitoring in collaboration • The National Election
PNET (volunteers, local and national NGOs) with the National Election Commission Commission
• Maha Bua Movement – Buddhist Monk • New-nationalist movement • 50,000 signature for a bill and
fund raising for the national reserve (a • Anti-neo-liberalism policy advocacy
country wide follower network) • Anti-privatization • Impeachment
• Chomrom ruam jai Thai goo chaart –
(Thai One Heart for the National
Recovery) (the fraction of academics in
political economy, businessmen, state
enterprise workers, lawyers)
Chomrom chua chat (help the nation group) • Democracy Pause • Overrule the constitution
(social critics, businessmen,) • Campaign supporting pardon for • Anti-Constitution Court
PM in his scandal
Sources: Relevant information is collected mainly from the author’s previous contacts with various organizations.
227
common citizens than charity organizations. A tradition of public dona-

tion for such advocacy work is not well established. Thai people donate
far more for religious and charity purposes than for social and political
activities. The government also systematically derides organizations that
challenge its policies and accuses them of being used by other political
parties or by international radical movements, as paid protesters.
Problematizing governance
The proponents of good governance and social action have targeted

several aspects of politics including election monitoring, corruption,
economic recovery and unjust development. In terms of public enthu-
siasm and results of their actions, the anti-corruption movement
appears to have dominated the scene. It has attracted people from
across the entire society, even politicians and businessmen who were
part of the old political vicious circle. Anti-corruption drive is an
example of a civic action that cuts across groups and organizations,
including political institutions such as the senate and the NCCC as
well as the business sector. However, even though election monitoring
may have led to a decline in vote buying, other forms of fraud have
already been invented to replace it.
Actions that target corruption and election fraud emphasize clean
politics. They have led to some significant accomplishments. Grassroots
movements for just development, on the other hand, have achieved
nothing equivalent in terms of policy change. The Assembly of the
Poor made the poor visible to the Thai public, but could not convince
the power elite to adopt real pro-poor agendas. It remains in isolation
as the only major organization that is concerned about development
justice. It has been fighting to win the rights of access and use of
community forests for more than 10 years. Grassroots battles against
the dams have also dragged on without significant results for as long as
a decade.
Good governance is often equated with the rule of law, particularly
in the case of corruption. To achieve that is no doubt an uphill task.
However the concept of the rule of law also needs a deeper interpreta-
tion. The poor have often called for civil disobedience when they have
been the victims of unjust laws that deny them access to their own
common natural resources. Those who protest against such injustices
are treated as criminals, for example, the way the poor were, when
they climbed the fence of the Government House, demanding a
meeting with the Prime Minister.
The proponents of good governance have failed so far to reconcile

good politics with social justice and the poor have remained the under-
dog of civil society. The Assembly of the Poor, for instance, which suc-
cessfully gained visibility in the liberal civil society, has failed to effect
significant policy change. In fact, as a result of its actions, a large
number of urban Bangkokians seem to think that the poor are too
demanding and too aggressive.
The economic crisis also brought into being a strong nationalist
reaction. A charismatic Buddhist monk, Luangta Maha Bua, led the
largest patriotic movement. His preaching of love of the nation and
the responsibility of citizens attracted hundreds of thousands of fol-
lowers. His nationwide fundraising collected hundreds of millions of
Baht and a few thousand kilograms of gold as deposits in the national
reserve fund. The nationalist reaction was stirred by the policies of pri-
vatization of state enterprises, the sale of commercial banks and the
companies with non-performing loans to foreign companies, and the
arrival of high-price foreign financial consultants. It attracted many
groups including the followers of Luangta Maha Bua as well as execu-
tives of companies threatened by liberalization. There was a nation-
wide campaign followed by a survey to prove that Thai people wanted
to buy the shares of such companies and not have them sold to
foreign companies. These nationalist pressures did slow down the
implementation of the privatization policy and foreign takeover of
domestic enterprises. People across class boundaries converged in this
new nationalist movement. Capitalists, owners of companies, workers,
conservative nationalists as well as neo-Marxist academics, all joined
hands.
Public support has been crucial in effecting successful policy change.
Take, for example, the case of a grassroots movement, such as the
Forum of the Poor. It could not achieve much in terms of policy
change. Its direct action approach may have killed positive public sen-
timent because of fear of its radical message. However, the increased
visibility of the marginalized people in the public sphere was in itself, a
valuable outcome of the movement. Pressure politics by marginal
groups is often ineffective because the government remains protected
by the anti-rural bias of the urban middle classes. The legacy of an
authoritarian bureaucratic polity has also not yet disappeared, so the
fear of state authority still haunts Thai society. Unlike the business
sector, a corporatist relationship with the state does not work for the
poor because they have little to offer in return for favours received
from government leaders.
Civic actions are therefore intended for establishing communication

with the rest of the society. Good governance cannot be the business
of the government alone; it requires that individual citizens take
responsibility for their actions. Progress towards good governance
requires greater communication between different sectors of society.
Only a well-informed public will be able to grant legitimacy to the
agendas that seek to compel the government and the political parties
to respond to the interest of all citizens.
Conclusions
The growth of civil society has created a wider space for public parti-
cipation. Civic groups have become more diversified and localized.
They are dealing with more complex social and political issues. But so
far they have failed to develop broad-based citizen organizations. There
are still not enough social activists to support much needed public
action to sustain the ongoing reform. Even the radical political upris-
ings of the past produced only incremental changes. They failed to
flush away bad politics. The highest achievement of civic actions so far
has been the promulgation of the new constitution of 1997. It gave the
ideology of good governance a more concrete agenda. The framework
for change toward democratic consolidation has also been provided by
the constitution. This should enhance the capability of civil society
through actions directed towards the implementation of rights and
responsibilities and should improve the quality of representative
democracy by imposing new rules for political institutions and the
election process.
The reality also indicates that the new constitution is only a beginning.
Civil society is now being called upon to play a far more complex role
than it did in the period of democratization when dismantling the
authoritarian regime was the main concern. A common fear, a feeling of
distrust, that the new mechanisms will also be abused by the old politics,
still affects popular response to the democratic process. This will persist as
long as Thai civil society is structured on the foundations of asymmetric
power relations and while everyone is still not able to equally share the
so-called free public space. The opening up of the public space is a neces-
sary but not a sufficient condition for achieving good governance in the
broader sense of that term which includes social justice. For that, civil
society will need to develop relatively autonomous organizations. Major
policy advocacy groups, unlike charity organizations, are caught in the
dilemma of maintaining autonomy and depending on the state for
resources. Many have come to rely on external funding for their activities.
Such dependency for financial and other resources greatly hinders the
action capacity of these organizations.
Civil society organizations also need to become more broad-based.
This will increase their public accountability and enhance domestic
fundraising. These are essential for the establishment of a healthy civic
culture. Civic education has received little attention in the current
transitional period. A misinformed citizenry contributes to public dis-
trust about civil society organizations. Prospects for future steps
towards substantive democracy can be threatened by the conservative
elements within civil society. The progressive groups in civil society
will have to overcome this obstacle and demand affirmative action to
increase visibility and create political opportunities for the marginal
groups. Careful efforts to nurture and implement the constitutional
provisions for participatory democracy will also help reduce popular
distrust of the political process. Given its history, state-civil society
relations in Thailand will require an adequate mix of cooperation and
contestation, without the fear of state retaliation in any form, includ-
ing state mobilization of mass support through information distortion,
media control and defamation of protesters and their leaders.
This chapter has outlined the significant role civil society can play in
reinforcing the new concept of good governance, a concept that
includes a righteous state, a good society and social justice. Civil
society in Thailand will not be able to fulfill that role if it does not
meet the challenges outlined above.
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Index
Afghanistan 18, 90 rural China 126–131

Africa 31 village democracy 133–134
AIDS 59 civil society 1, 2, 6–10, 17, 81–82,
Anderson, B. 98 92, 99–100, 105, 140, 154,
Asia Foundation 134 178,186–187, 189, 214–216, 219,
Asia-Pacific Economic Cooperation 221, 229–231
(APEC) 78 Cold War 75
Asian communisms 83 Colombia 18
Asian Development Bank 225 communitarianism 19
Asian financial crisis 1, 23, 56, 229 commodification 105, 106
Asian values 19, 82, 91, 92, 104 Comte, A. 13
Assembly of the Poor (AOP) 8, Confucian values 82, 104
140–179, 229 Confucianism 91
Association of Southeast Asian contagion 37
Nations (ASEAN) 78, 190 contemporary capitalism 106
Australia 22, 149 co-optation 9
corporatism 220
Bhutan 54 crony capitalism 64, 76
Bretton Woods institutions 69, 93, cultural homogenization 30
185 Czeckslovakia 23
British liberalism 16
bubble economy 64 democracy 1, 5, 13–15, 25, 66, 216
constitutional 8, 9, 213
Canadian government 5 democratization 5
Canadian International Development formal 75
Agency (CIDA) 202 grassroots 149, 204
Cambodia 149 liberal 81–83
Carter Center for Democracy 134 participatory 149
caste-based pluralism 15 democratic development 1
Chiapas 24 democratic socialism 224
chaebol 67 development aggression 150
Chile 70 developmental state 94
China 20, 22, 45, 61, 70, 85, 111, Doi-moi 91
114, 126–133
political culture 113 East Asian development model 62
Chinese Communist Party (CCP) East Asian financial crisis 60, 71
126, 129 economic liberalization 3, 7, 29,
Chinese immigrants 23 182
Chinese oligarchies 127 deregulation 57
grassroots democracy 134 deregulation of capital markets 70
National People’s Congress devaluation 57
128–131 exchange rate stabilization 71
Tiananmen crackdown 121 financial deregulation 34
234
Index 235
financial liberalization 23, 46 Kashmir 17

privatization 23, 204 Kerala 24
trade liberalization 44 Indonesia 19, 53, 68, 69, 72, 77, 85
Ecuador 18 Habibie, B.J. 77
elite pluralism 17, 20, 24–25 Golkar Party 19, 77
emerging markets 34, 37 Jakarta 24
Engels, F. 13 Suharto 19, 77
Environmental Impact Assessment Wahid, Abdurrahman 77
(EIA) 169 industrial revolution 22
Eurocentrism 85 International Financial Institutions
Europe 49 (IFIs) 2
European Union 134 International Monetary Fund (IMF)
18, 42, 60, 64, 69–70, 75–76, 94,
fascism 83 185, 223, 225
financial crises 37
flexible specialisation 36 Japan 35, 40–41, 62, 149
Ford Foundation 134
Foreign Direct Investment (FDI) 3, Khomeini, Ayatollah 19
33, 34, 44, 45, 46 Kim Young Sam 68
French Revolution 19, 21 Kissinger, H. 68
Fujimori, Alberto 21 Korea 54, 65, 67, 75
G-7 18, 21, 25 late capitalism 48

GATT 42 Latin America 32, 37, 42, 65
Gellner, E. 98 Lenin, V.I. 86
global economic governance 2 liberalization 4, 38, 57, 71
globalization 1, 3, 29, 31, 33, 37–38,
44, 45, 48, 53–54, 56–59, 75, 78, Malaysia 53–54, 68, 72, 77, 149
89, 95, 189 Marx, Karl 13, 106
globalization of culture 48 McWorld 54
good governance 5, 214, 223–224, Menem, Carlos 21
228–229, 231 Mexico 23
Michels, R. 14
Hindutva 82, 91, 104, 107 Mill, John Stuart 15
Hong Kong 73, 93, 111, 114, Modigliani-Miller (M-M proposition)
119–126, 134–136 66
Democratic Alliance for the Mohamad, Mahathir 20, 77, 78
Betterment of Hong Kong Mosca, G. 14
(DAB) 122, 124 multi-culturalism 104
Democratic Party (DP) 121 Multi-national Corporations (MNCs)
democratization 121 33, 45, 204
Hobsbawm, E. 87–88 Myanmar 18
human development 182, 183
Human Development Report 2, 39 national bourgeoisie 86, 95
human rights 5, 150, 185 National Bureau of Economic
Research 69
imperialism 36, 56, 60 nationalism 76
India 16–18, 54, 61, 85, 100, 103, Asian nationalism 81
149 bourgeois nationalism 101
236 Index
nationalism – continued state-elite relations 193

cultural nationalism 82, 92, 96, state-civil society relations 193
103–107 Polanyi, K. 99
developmental nationalism 92 political culture 112
xenophobic nationalism 78 post-Cold War era 75
national capitalism 95, 102 pro-market reforms 6
neo-liberal/neo-liberalism 8, 204 pluralism 15
new economy 71
Newly Industrialized Countries (NICs) Russia 39, 65
3, 187, 195 Russian financial crisis 23
New Zealand 22
New York 30 Shah, Husain 17
Non-governmental Organizations Shah, Nusrat 17
(NGOs) 6–7, 24, 111–112, 147, Singapore 70, 93
170–171, 174, 182–183, 185–186, South Korea 22, 62, 72–73, 76, 93,
188, 190, 197–202, 219–220, 222, 149
225 Soviet Union 39, 83, 87
North-South partnership 189, 204 state-led development 62
Stiglitz, Joseph 60, 183, 188
old economy 73 structural adjustment 18, 184, 185
Organization of Economic sustainable democratic development
Cooperation and Development 10
(OECD) 183
Taiwan 70, 73, 93, 111, 114, 116, 136
Pareto, V. 16 black money 118
participatory development 9, 187, Ching-kuo, Chiang 115, 136
189 Democratic Progressive Party (DPP)
participatory governance 183, 200 119
participatory internationalism 54 democratic transition 115
paternalistic political culture 215 democratization 136
People’s Organizations (POs) 149, Dangwai 116
170–171, 190 Kuomintang (KMT) 116–119, 134,
Philippines 53, 73, 85, 184–204 136
Aquino, Corazon 195, 197 political culture 115
civil society 196, 199, 201–203 political liberalization 117
Estrada, Joseph 196 Thailand 6, 64, 69, 72–73, 140–179,
Local Government Code of 1991 213–230
200 Alternative Agricultural Network
Marcos, Ferdinand 195, 196, 197 169–173
patrimonialism 195 Alternative Energy Group 168
Philippine Agenda 21, 194 Assembly of Indigenous People in
Philippine Development Assistance Thailand 175
Program (PDAP) 202 Bank of Thailand 214
Promoting Participation for Bangkok 147, 154
Sustainable Enterprises (PPSE) Campaign for Popular Democracy
202 168, 219
Ramos, Fidel 196–197 Civil Liberty Association 174
Social Reform Agenda (SRA) Communist Party of Thailand
197–198 (CPT) 144
Index 237
export-oriented economic growth Students’ Federation of Thailand

146 168
Farmers’ Federation of Thailand 1997 Constitution 141, 178
144, 220 Third World socialism 79
Federation for Democracy 219
Forest Industry Organization (FIO) United Kingdom 20
160–162 UNCTAD 41
grassroots movements 141, 143, UNESCO 49
173 United Kingdom 32
Institute for Political Development United Nations (UN) 3, 38, 185
219 United Nations Development
Land Allocation Scheme for the Program 134, 188, 223
Poor 147 Uruguay Round 43
Land Rights and Forest Network USA 5, 20–21, 35, 40–41, 50, 52,
(NFA) 148, 175 67–69, 74–75, 78, 134
National Counter-Corruption United States Agency for
Commission (NCCC) 216, International Development
228 (USAID) 202
National Election Commission USSR 83, 88
(NEC) 216 Uzbekistan 90
Ngarm-boon 160
Ngarm-rom 159 Vietnam 85, 91
Ngarm-yen 159
political democratization 213 Washington Consensus 70
political liberalization 145 Washington Consensus-privatization
Pongkhunpet Dam 163–165 57
pracha sangkom 221, 222 Wolfensohn, J. 183
Protection of Civil Rights and World Bank 5, 18, 46–48, 60, 71, 94,
Freedom Group 219 183, 185–186, 188, 192, 223, 225
Small Farmers Assembly of the World Trade Organization (WTO)
Northeast (SFAN) 147–149, 18, 23, 43, 59, 61, 76, 188
165
social movements 146 Zainuddin, Daim 77
Thammarat 223–224 Zain-ul-Abidin 17

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Democracy and Civil

Society in Asia: Volume 1

International Political Economy Series

Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke,

List of Tables and Figure ix

Notes on the Contributors xii

1 Introduction: Globalization, Democracy and Civil Society after

2 Discontents of Democracy: Elite Pluralism, Mystiﬁcation

3 Globalization, Economic Restructuring and the Implications

4 Globalization, Economic Restructuring and the

5 Nation Against Democracy: The Rise of Cultural

6 Political Culture, Alternative Politics and Democracy in

7 From Victimized Communities to Movement Powers and

8 Grassroots Democracy and Community Empowerment:

9 Civil Society and Good Governance: A New Chapter

The central importance of the countries of Asia in the rapidly chang-

Other colleagues, students and members of the staff in the

AAN Alternative Agricultural Network

LGC Local Government Code

Leonora Angeles is an Assistant Professor at the School of Community

Amiya Kumar Bagchi is a renowned economist and historian. He has

Chantana Banpasirichote is an Assistant Professor of Government, in

Jayati Ghosh is an Associate Professor at the Centre of Economic

Jayant Lele is Professor Emeritus at Queen’s University, Kingston,

Suthy Prasartset is presently Associate Professor of Economics, at

Fahimul Quadir is an Assistant Professor of the Division of Social

William K. Tabb is Professor of economics and Professor of political

David Zweig is Professor of Social Science at Hong Kong University of

of Agrarian Radicalism in China, 1968–1981 (1989), China’s Brain Drain

This volume brings together a group of scholars from various parts of

empowerment, and participation. While the consensus is that civil

Deconstructing the myths of globalization

At the heart of this volume is an analysis of economic globalization

(UNDP 2003). The irony is that, although a few developing countries

Apart from generating and/or perpetuating inequalities, liberaliz-

The ﬁnancial crisis of the 1990s and the ‘push’ for

The recent resurgence of the modernization paradigm reinforces a

groups would force authoritarian regimes to develop an open, transpar-

promotion of democracy and the strengthening of associational life

Is civil society a panacea?

deﬁned as the ensemble of private, non-state organizations working

set of non-governmental institutions which is strong enough to

The primary purpose of a vibrant civil society is to ensure that govern-

Much has been written about the enormous diversity of meanings

Going beyond constitutional democracy: the future of

institutions that allow people to determine their own future. It is

an effort to bring marginalized groups together to form powerful

Blair, H. (1997), ‘Donors, Democratisation and Civil Society: Relating Theory to

Elite rule, class rule, and elite pluralism in India

was to be governed by a minority. The thrust of their critique was

with a pluralist society. In such a society, interests and cultures would

In the nineteenth-century era of British liberalism, we learned about

were represented in group interests. Moreover, he ignored the issue

Global elite pluralism, political strategies and market

We move to a different register when we take up questions of civil

of exclusion on the basis of ethnicity or other ascribed stigmata

Fifthly, armed conﬂict between warring states or claimants to state

cronies. But this happened because of popular revolts led by students

without support from some section of the wealthy. Because of this

industrial revolution appeared on the scene and was followed by the

they ﬁnd employment, it is generally in low-paid, casual or contract

civil society from that of the state remains virtually meaningless so

Even in the context of the extraordinary twentieth-century, the 1990s

and a certain kind of cultural homogenization. This concluding section