ABSTRACT
Close business-government relations have long been seen as a distinctive component of the Asian growth model, assuring investors and contributing to the quality of policy. Yet this positive strand of thinking has always coexisted with a more skeptical interpretation, especially in countries such as the Philippines, Indonesia, and Malaysia where business-government relations have been characterized by particularism and clientelistic relationships between politicians and individual businessmen. In the wake of the financial crisis of 1997-8, this skeptical strand gained ground. Cronyism and corruption may have been compatible with high growth in the past, but they created vulnerabilities, including particularly weak financial regulation and moral hazard, that contributed directly to the onset and depth of the crisis of 1997-8 (Haggard 2000: Chapter 1).
