Author: Terence C. Halliday

Since the G-7 called for a new international financial architecture, international financial institutions have been designing templates for markets and the laws that govern them. Corporate bankruptcy regimes have been among the bundle of reform packages urged upon developing and transitional countries. While widely enacted and formally instituted, however, many bankruptcy reforms have failed to meet expectations. Among the reasons for failure is a fundamental threat with which international organizations confront states, namely, the restructuring of the state itself. Corporate reorganization regimes reformed in compliance with global norms conventionally demand state reorganization. This paper demonstrates how global designs of bankruptcy regimes fared in three Asian countries variously affected by the Asian Financial Crisis: China, Indonesia and Korea. It examines four aspects of state restructuring: shifting the boundary between the market and state; shifting power among government agencies; vesting powers in the state; and adapting state structure to political society. The paper argues that the efficacy of transnational pressures for state restructuring turns on the recursive interplay of (a) the situation in which global designs come to be placed on national policy agendas, (b) the clarity of the global norms, (c) the power of the international organizations, (d) the weakness of nation-states, (e) the magnitude of the shift in power required by a state to conform to global designs, (f) the continuity of exogenously encouraged reforms with domestic trajectories for change, and (g) the extent of local demand and mobilization.