Chairman King, Ranking Member Moloney and distinguished members of the committee, my name is Peter Henry Blair. I am Associate Professor of Economics at the Stanford University Graduate School of Business. I am also a Faculty Research Fellow of the National Bureau of Economic Research, and my research is funded by the National Science Foundation's Early CAREER Development Program. I have wirtten extensively on the economic effects of capital account liberalization. Thank you for the opportunity to discuss the implications of my research for the financial services component of the recent U.S. trade agreements with Chile and Singapore.

After the devastation of World War II, Germany and Japan built national capitalist institutions that were remarkably successful in terms of national reconstruction and international competitiveness. Yet both "miracles" have since faltered, allowing U.S. capital and its institutional forms to establish global dominance. National varieties of capitalism are now under intense pressure to converge to the U.S. model. Kozo Yamamura and Wolfgang Streeck have gathered an international group of authors to examine the likelihood of convergence to determine whether the global forces of Anglo-American capitalism will give rise to a single, homogeneous capitalist system. The chapters in this volume approach this question from five directions: international integration, technological innovation, labor relations and production systems, financial regimes and corporate governance, and domestic politics.

In their introduction, Yamamura and Streeck summarize the crises of performance and confidence that have beset German and Japanese capitalism and revived the question of competitive convergence. The editors ask whether the two countries, confronted with the political and economic exigencies of technological revolution and economic internationalization, must abandon their distinctive institutions and the competitive advantages these have yielded in the past, or whether they can adapt and retain such institutions, thereby preserving the social cohesion and economic competitiveness of their societies.

This paper assesses Pan Wei's proposal for a 'consultative rule of law system' for China, finding it a potentially important step along the path of political reform. China urgently needs political reform to deal with the rapidly mounting problems of corruption, abuse of power, financial scandals, rising crime and inequality, and declining legitimacy of the Chinese Communist Party. A rule of law, with an independent judiciary and other autonomous institutions of horizontal accountability, is vital if China is to rein in these problems and deliver better, fairer, more transparent and effective governance. However, Pan Wei's proposed system goes only part of the way toward addressing the deficiencies of governance in China, and is therefore best viewed as a transitional framework. To work, horizontal accountability must be supplemented with and reinforced by vertical account ability, through competitive elections, which give local officials an incentive to serve the public good and enable bad officials to be removed by the people. Ultimately, I argue, China can only achieve adequate and enduring political accountability by moving toward democracy. Among the other issues addressed in the paper are the architecture and appointment of a system of horizontal accountability for China; the role of the Communist Party (or its successor hegemon) in a 'rule of law' system; and the timing and phasing of the transition to a rule of law.

Reprinted in Suisheng Zhao, ed., Debating Political Reform in China: Rule of Law vs. Democratization, 2006.

South Korea (Korea hereafter) and Taiwan are widely recognized as the two most successful third-wave democracies in Asia (Chu, Diamond, and Shin, 2001; Diamond and Plattner, 1998; Shin and Lee, 2003). For more than a decade, these two new democracies have regularly held free and competitive elections at all levels of their respective governments. Both nationally and locally, citizens choose the heads of the executive branches and the members of the legislatures thorough regularly scheduled electoral contests. Unlike many countries in the region, moreover, the two countries have peacefully transferred power to opposition parties, the Millennium Democratic Party in Korea and the Democratic Progressive Party in Taiwan. Accordingly, there is little doubt that the political regimes of Korea and Taiwan fully meet the democratic principle of popular sovereignty featuring free and fair elections, universal adult suffrage, and multiparty competition. Nonetheless, little is known about how well their current regimes meet other important principles of liberal democracy and uphold its basic values such as freedom, equality, and justice.

This paper will assess the "quality of democracy" in India and Bangladesh. This paper we will argue that the democratic successes and failures are in large measure a function of the socio-political milieu within which the democratic transitions took place in both states. It will also argue that despite a range of striking shortcomings India has made significant progress in a number of arenas toward enhancing the quality of democracy. Bangladesh, on the other hand, has failed to make similar progress. Instead there is much evidence that suggests that the quality of democracy in Bangladesh is actually regressing.