The foreign–domestic divide in studying the aftermath of economic crises and outlining an alternative approach
Financial and broader economic crises in less developed economies raise an important set of questions in the study of IPE. Which foreign and domestic actors gain and lose afterwards? Are there similar or different responses from American and European actors? Is US foreign economic policy during crises shaped by commercial pressures? Are US firms dominant internationally? This chapter groups analyses into two principal and competing perspectives. In the specific case of Asia’s recent economic downturn, a number of authors are categorized together on the grounds that they held similar assumptions and advanced similar hypotheses particularly concerning the strengths or limitations of American power. The first approach is termed the “strong American power model.” It posited that a qualitatively different Asia would emerge from the financial crisis in which US actors increased their economic policy and FDI stakes in the region. The second approach, the “resistant domestic political economy model,” maintained that developing Asia would largely resist international pressure because of its deep-rooted social structures.