A well-developed thesis in political economy claims that crises create opportunities for change. Yet despite creating similar preferences for change, the Asian financial crisis led to reform of policies and institutions in some issue areas and in some countries of Southeast Asia, but not in others. In this essay I find that policies and institutions associated with technological upgrading of the economy, and particularly the manufacturing sector, are often immune to reform efforts, for two reasons. First, reform demands that policymakers know what to do; and second, they must know how to do it. Whether countries can discover and adopt new “templates” for reforming technology policies and institutions depends on the capacity of preexisting institutions to foster participative rather than simply consultative public-private collaboration. Such collaboration is most likely when decentralized yet coordinated bureaucracies facilitate meaningful participation from private actors, including business, labor, and academia, in forming, implementing, monitoring, and enforcing development policies.
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