The critical juncture approach is a theoretical approach that not only explains the distinct organizational “gap”, in Northeast Asia, but also stresses the agency of key decision-makers and policymakers in Northeast Asian institution-building that current popular theories ignore. First, Northeast Asia, as a region, has always been marked by both its absence of any formal regional multilateral security structure and the regionally-distinct obstacles it has faced to build a regional institution. Second, current popular theories that have aimed to explain the organizational gap in the region have failed to do so, and the critical juncture approach has taken the best aspects of its rival theories to successfully explain the region’s approach to institution building. Through a two-stage process, the critical juncture approach has created a theoretical framework to solve the region’s collective action problem. Third, an important strength the critical juncture approach holds is its ability to recognize the value of agency and ideas, while also its limits.
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Northeast Asia’s Typical Institutional Path
The “Organizational Gap”
Northeast Asia has always been in a unique history regarding institution-building, as they have never had a formal multilateral security structure. Furthermore, it was not up until the 1990s that the region built any form of regional economic and environmental organization (Calder & Ye, 2004, pp. 192). With the growing issue of emerging financial and cooperative security challenges in the region, this distinctive absence of a multilateral coordination structure needs to be addressed. As illustrated by the Korean War and the Asian financial crisis, Northeast Asia evidently must face their issues of regional security pressures and financial vulnerability (Calder & Ye, 2004, pp. 192).
Reasons for the “Gap”: Northeast Asia’s Collective Action Problem. However, Asia’s particular institutional path does not only lie with its absence of multilateral institutions but rather the reasons why the region faces an organizational gap. According to Calder and Ye (2004), due to Northeast Asia’s Cold War heritage and the embedded institutional structures that it engendered, there are various challenges to regional cooperation (pp. 215). One, nations in the region persistently fail to see common interest amongst each other and therefore, fail to communicate with one another (Calder & Ye, 2004, pp. 215). Two, the region lacks blueprints, think tanks, and epistemic communities with broad knowledge of the area, which leads to their agenda-setting problem (Calder & Ye, 2004, pp. 215).
Individualism and Informal Institutional Tendencies. In addition to the region’s collective action problem of coordinating with one another, East Asian countries fail to see the danger of individualistic market operations in a highly interdependent world which leads to further complications in solving the collective action problem (Calder & Ye, 2004, pp. 216). The region focuses largely on individualistic and informal institutional arrangements, which in turn, provokes a tendency toward free-riding and a persistent related reliance to asymmetric economic and security ties with the United States (Calder & Ye, 2004, pp. 215).
Critical Juncture and Regionalism
A “Gap” in Popular Theoretical Explanations
There are many theories that aim to explain the absence of multilateral institutions in Northeast Asia, but the two most popular ones are realism and historical institutionalism. Realists understand the organizational gap to be a geographical phenomenon, while historical institutionalists explain the gap as a part of the region’s institutionalized norms and culture (Calder & Ye, 2004, pp. 193). However, neither realism nor historical institutionalism on their own can explain the origin or narrowing of the Northeast Asian organizational gap. Thus, this is where the critical juncture approach comes in to answer the questions its two rival theories failed to do so. A critical juncture refers to precarious situations in which decisions of key actors are highly influential for the selection of one path of institutional development over other possible paths. In a critical juncture, individual decision making is crucial in shaping the ultimate institutional product (Calder & Ye, 2004, pp. 195). However, a critical juncture is not only made up of a spider web of political-economic factors that instantly come together to create opportunities for institutional change, but rather a two-stage process.
Stage One: The Catalyst
In the first stage of a critical juncture, there must be an event or events that will cause changes and pressures, usually followed by a form of a crisis, and produce an environment that is opportune to fundamental change. This event or events will then undermine the legitimacy of existing institutions or policies and create pressures to consider alternative approaches to specific problems. The catalyst often takes the form of a crisis, such as political uprising, wars, recession, or shifts in the balance of power.
The Korean War and The Asian Financial Crisis. In terms of Northeast Asia, this can be better illustrated through the root of the region’s organizational gap. The root of the region’s gap is a crisis-driven critical juncture, the Korean War and the Asian financial crisis of 1997-8 being the catalysts that produced and perpetuated institutionally the lack of formal multilateral arrangements that has characterized the region since (Calder & Ye, 2004, pp. 219). Furthermore, critical junctures are highly important in terms of regional institution-building, especially in Northeast Asia. On a regional scale, political systems are bureaucratized and often fragmented, with a bias towards routine that makes crisis decision-making central to policy change (Calder & Ye, 2004, pp. 200). Hence, due to their way of ineffectively dealing with regional crises, the region faces security pressures, such as the danger of war and particularly the Korean conflict. On an international scale, corporations are often highly leveraged, making them particularly vulnerable to political and economic uncertainties affect the availability of capital (Calder & Ye, 2004, pp. 200). In addition to corporate leverage, the region faces financial vulnerability due to a lack of transparency, weak financial institutions, and a dependence on real-estate collateral (Calder & Ye, 2004, pp. 201). Thus, these corporate vulnerabilities and their perverse national and international implications were demonstrated in a major catalyst – as seen by Korea and Japan during Asian financial crisis of 1997-8 (Calder & Ye, 2004, pp. 200). Therefore, Calder and Ye (2004) argue that due to security pressures and financial vulnerability in the region, major policy innovations in Northeast Asia are thus highly dependent on critical juncture (pp. 202).
Stage Two: The Response
In the second stage of a critical juncture, there must be a response from the decision-makers that can either initiate or drastically change the trajectory of an institution. In this stage, the decision-makers are presented with limited options and time to respond to propose a new course of action. Calder and Ye (2004) theorize that “the organizational gap is likely to be narrowed through the same dynamic that created it: the critical juncture mechanism.” (pp. 219). The reason being that the critical juncture mechanism can make common interests visible and change individual cost-benefit calculations (Calder & Ye, 2004, pp. 219-220).As a result, the region would establish social networks that facilitate coordination and communication and provoke potentially countervailing regional alliances against the US power, thus solving the region’s collective action problem (Calder & Ye, 2004, pp. 220).
The Value of Agency and Ideas in Institution-Building
Unlike what realist and historical institutionalist may argue, the critical juncture approach stresses the major role agency and ideas play in institution-building. It is the agency of key policymakers and decision-makers, together with the catalyst, which actually brings about beginnings of institution-building or a change in the trajectory of existing institutions. Furthermore, since different leaders could interpret the same set of structural changes and pressures in different ways and, hence, set in motion an alternate set of policies; thus, critical junctures places a lot of importance on individual decision-makers.
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Limits to Agency
While the critical juncture approach does place a greater emphasis on the agency of important actors, that agency does have its limitations. The needs of preexisting institution, domestic interests and foreign policy considerations frequently help to shape ultimate institutional profiles, as do culture and perceptions in a more indirect way (Calder & Ye, 2004, pp. 195). Nonetheless, the importance of these background factors is still determined by the individual decision makers (Calder & Ye, 2004, pp. 195). Therefore, policymakers’ decision is largely determined by the process of personal interaction at a critical juncture, however, domestic interest is often an important background factor.
The critical juncture approach is a theory that not only explains the distinct organizational “gap”, in Northeast Asia, but also returns agency to key decision-makers and policymakers in Northeast Asian institution-building that current popular theories ignore. First, Northeast Asia, as a region, has always been marked by both its absence of any formal regional multilateral security structure and the regionally-distinct obstacles it has faced to build a regional institution. Second, current popular theories that have aimed to explain the organizational gap in the region have failed to do so, and the critical juncture approach has taken the best aspects of its rival theories to successfully explain the region’s approach to institution building. Through a two stage process, the critical juncture approach has created a theoretical framework to solve the region’s collective action problem. Third, an important strength the critical juncture approach holds is its ability to recognize the value of agency and ideas, while also its limits.
- Calder, K., & Ye, M. (2004). Regionalism and Critical Junctures: Explaining the “Organization Gap” in Northeast Asia. Journal of East Asian Studies, 4(2), 191-226.
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