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The fact of the matter is that while we are hearing less and less today about the East Asian economic crisis, the region continues to be shaken from time to time by aftershocks from the crisis and the self-confidence and vitality that characterized the region's workforce prior to the crisis has been replaced by self doubt, finger pointing and a lingering malaise that has crept into the hearts and minds of the people. Where once the "Tigers" were the standard by which the economic progress of other developing countries was judged, today the region is more likely to be held up as an example of what excess and cronyism can bring. And "Asian capitalism," viewed by many prior to the crisis as the economic model that would indeed make the coming century the "Asian century," has largely been discredited-displaced once and for all it seems by "western style capitalism." Here relationship-based lending is investigated as both a cultural artifact and as a largely ignored cause of the East Asian economic crisis.
Clearly, mistakes were made during those heady years leading up to 1997, mistakes that many scholars, analysts, government officials, and even more casual observers have variously attributed to weak political leadership, misguided development policies, structural deficiencies, regulatory inadequacies, graft, corruption, cronyism, and, finally, plain old greed. When one looks back it appears that all of these factors had some role to play in precipitating the East Asian economic crisis and there is now a substantial body of research to clearly suggest that this is the case.
Unfortunately, one does not have to read very far before it becomes clear that three or four broad themes have come to dominate conventional wisdom regarding causes of the crisis. These themes tend to embrace macroeconomics, political economics, financial institutions and markets, and regional development. Closely related to these major themes is that research dealing with the role and effectiveness of non-governmental organizations in responding to the crisis. This tendency to cluster around "streams of research" is not uncommon among scholars, in fact, it is more common than not and should probably be viewed as a strength because it contributes to depth in those narrowly defined areas of study that get coverage. However, this process of...