Yes, Regional Economic interests, but Its Meaning? East Asian Financial Market Development (with Yong Wook Lee)

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Ranging from the creation of Eurozone to African Financial Markets Initiative, the world has seen emergence of various regional financial institutions in recent decades. How can we explain the new institutional landscape? In this paper, we propose an experience-communication analytical framework to explain regional state actors’ choice of regional institution building. The crux of the framework is to investigate systematically the formation of collective economic interests for regional institution building. In presenting the framework, we make a theoretical claim that the nature, content, utility function of economic interests should be analyzed rather than assumed. We show that regional states define their economic interests on the basis of their interpretation of a critical event, such as financial crisis, and their relations with significant others during the event. To test our theoretical claim, we examine the institutional development of the Asian Bond Market Initiative in East Asia for the last fifteen years. For empirical exploration, we attempt to make best use of both qualitative process-tracing and quantitative colocation analysis to ensure the validity and reliability of our theoretical claim. Particular attention is paid to the role of Japan in the context of financial cooperation of ASEAN plus Three. Japanese financial officials were
instrumental in shifting the foci for regional bond market cooperation from the APEC where the United States was a member to ASEAN+3, the membership of which was limited to ASEAN plus Three countries, as they worked with member states in forging regional economic interests in financial autonomy.