Corporate Governance, Crony Capitalism and Economic Crises: should the US business model replace the Asian way of “doing business”?

This paper considers the Greenspan/Summers/IMF (GSI) argument that the Asian way of doing business was the deep cause of the Asian crisis. The IMF reform programme for the crisis‐affected Asian countries suggested they should abandon the Asian business model and adopt the US corporate model. The main findings are: (a) contrary to GSI doctrine, poor corporate governance and lack of competition are not common characteristics of the Asian business model; (b) the stock market‐based US business model has severe limitations for developing country corporations, not least because of imperfect share prices and the imperfect market for corporate control.