Financial Crisis in East Asia: Underlying and Precipitating Factors

Anne Krueger is best known around the world for her contributions to international economics — including economic development. But much of her work transcends these fields. Nowhere is this more evident than in her highly influential article published more than a quarter of a century ago: ‘The Political Economy of the Rent-Seeking Society’ (Krueger, 1974). This insightful contribution integrated elements of the economic theory of bureaucracy with the systematic study of economic policy making. This theory, in the hands of Professor Krueger and later writers, reveals how efforts of entrepreneurs, traders and managers to gain favourable treatment from government diverts energies and resources from productive activities, thereby curbing economic growth and also skewing the rewards from economic activity.