East Asian Financial Regionalism and the Politics of Global Financial Governance: Structural and Institutional Power in Global and Regional Governance

The Asian Financial Crisis in 1997-1998 and the mishandling of the crisis by the International Monetary Fund (IMF) and the United States catalyzed the rise of East Asian financial regionalism. In spite of skepticism, region-wide financial arrangements in East Asia have continually evolved and a new multilateral financial lending facility in the region was finally launched. However, the financial lending facility in East Asia is still linked to the IMF, a global institution, and has significant limits in its capacity. In the wake of the Global Financial Crisis, mounting criticism resurfaced against the IMF's legitimacy and effectiveness, but its reform process has been sluggish and its outcome remains uncertain. My argument here is that the limits of East Asian financial regionalism and the slow and uncertain reform process of the IMF, which is the linchpin of global financial governance, are attributed to the path-dependent nature of the structural and institutional power of the United States. This study aims to show that power is an integral element of global and regional governance, and global structures and institutions, originally created by a hegemonic state, can have long-lasting effects even though the hegemon is in decline.