Political Institutions and Corporate Governance Reforms in Southeast Asia

While the weak corporate governance has been identified as among the leading contributing factors that led to the Asian financial crisis, the progress in restructuring corporate governance has been rather modest in Southeast Asia following the crisis. Some common features of corporate governance in Southeast Asian countries, such as high concentration of ownership and lack of adequate disclosure, have been remarkably resilient to the frustration of the reformers. In this paper, we argue that the observed rigidities in corporate governance structure in Southeast Asia may be due to the political institutions as well as the interaction between these institutions and the corporate sectors. Our analysis also finds that there are substantive variations in corporate governance across Southeast Asian countries, and that the differences in political institutions among these countries may account for much of the variations