Review Of The Chastening
Paul Blustein (2001) The Chastening: Inside the Crisis that Rocked the Global Financial System and Humbled the IMF (NY: Public Affairs)
In The Chastening, Blustein provides an overview of the policies and responses of the IMF to the Asian financial crisis. More specifically, Blustein lays the foundation with a brief history of the IMF, the specific details of the crises, and finally, the policies that were implemented. However, the book is largely an account of the crises, rather than an analysis of the policies per se.
On the other hand, Blustein manages to invoke several questions throughout the book. The question most congruent with the discussions in class is that of whether the East Asian economies can be expected to continue growing rapidly without the structural change required into economies more similar to those in the West. These changes, which generally included the reduction of the role of government in the market, the reduction of labour union power, and the reduction of personalized relations between the private and public sector, were part of the compulsory objectives that had to be undertaken in order for the countries to become eligible for an IMF rescue package. Alternatively, since these conditions could be considered the opposite of some of the characteristics of the East Asian model outlined in class, did the East Asian model actually exist? If it did, then could it be expected to survive this ‘attack’ by the Western model?
The book, however, provides no evidence as to whether an East Asian model actually existed. Based on the discussions in class, we know that while there appears to be some evidence for some general similarity between the High Performing Asian Economies – namely a high savings rate, an export-oriented economy, relatively authoritarian governments, and a competent bureaucratic core – there is no sure and fast way to classifying a country as being a possible high performing one.
However, where do...
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