494 Reviews/Comptes rendus Governing from the Centre: The Concentration of Power in Canadian Politics by Donald Savoie. Toronto: University of Toronto Press, 1999. This book argues that the Canadian centre of government has evolved a great deal during the past 20 years. It presents a study of how the central agencies have changed between the 1970s and 2000. Donald Savoie adopts the position that prime ministerial power has been enhanced in recent years. However, a similar position was adopted by Thomas Hockin years ago. This suggests that issues in public sector management are also the subject of continuous debate. The case for the power of the prime minister is presented in Chapter 2, “The Centre Is Born” (pp. 20-45); Chapter 3, “Render Unto the Centre” (pp. 46-67); and in Chapter 4 (pp. 71-108). These chapters are further supported by a separate focus on the Privy Council Office (pp. 109-55); Finance (pp. 156-92); and the Treasury Board and the Public Service Commission (pp. 193-238). The author effectively employs the technique of interviews and shows the effects of one who has had access to the system. He emphasizes the importance of interviews in the study of Canadian public sector management relative to other countries (pp. 364-65). Various studies of the central agencies have demonstrated this pattern in Canada. Savoie discusses the most recent changes, especially during the 1990s. Part II of the book deals with the role of the prime minister and the central agencies. The study points to the inequality of ministers within the Cabinet. Furthermore, the study points to the dominant role of the prime minister in the system. The prime minister has a distinctive role in the appointment of ministers, the Clerk of the Privy Council, and deputy ministers. The prime minister and, to a lesser extent, the minister of finance and the president of the Treasury Board Secretariat dominate the system (pp. 71-238). In his chapter on departments, Savoie indicates: The background to the changes in the past 30 years can be related to the leadership of Pierre Elliott Trudeau in 1968-79 and later between 1979 and 1984. The study examines the roles of the core central agencies: the Prime Minister’s Office, the Privy Council Office, the Treasury Board Secretariat, and the Department of Finance. The enhanced position of the Privy Council Office and the Department of Finance are significantly emphasized. With respect to the power of the prime minister, Savoie concludes: In earlier chapters we have seen that whenever the prime minister wishes to focus on an issue, he or she will get their way. In addition, it is clear that he and his Minister of Finance have a free hand to establish their own priority projects. The Prime Minister’s priorities will always see the light of day pretty well as they were first envisaged. As for the rest, the centre of government monitors, decides and lays the groundwork for a consensus to emerge to resolve outstanding issues or to decide on a course of action (p. 317). The prime minister is the key player in selecting which people will be empowered. The Clerk of the Privy Council and Secretary to Cabinet, key staff members in the Prime Minister’s Office, the Minister and Deputy Minister of Finance, two or three ministers, and some deputy ministers are extremely powerful in Ottawa circles because the Prime Minister prefers it that way (p. 359). Thus, a major departure from previous examinations of the central agencies is the assertion made “Primus: There Is No Longer Any Inter or Pares” (pp. 71-108). Chapter 4 suggests “that prime ministers leading a majority government can drive virtually whatever initiative or measure they might favour. Cabinet and Parliament are there, but with a majority of seats, a prime minister can manipulate CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL . XXVI , NO . 4 2000 Reviews/Comptes rendus them when it comes to issues that matter a great deal to him” (p. 106). Having established this conclusion, the author discusses the individual roles of the following organizations: the Privy Council Office; the Department of Finance, and the Treasury Board and the Public Service Commission (pp. 109-238). Accordingly, the author presents a contemporary study of central agencies. Some of these issues were addressed in the Politics of Public Spending by the same author. The interrelationships between the central agencies have been most intricate and complex and they have been addressed by several research studies ranging from the Glassco Commission in the early 1960s to the PS2000 Task Force in the late 1980s and early 1990s. At the time of writing, these relationships are still being modified; especially the relationships between the Treasury Board Secretariat, the Public Service Commission, and line departments (pp. 193-238). From this perspective, the study provides useful information for a meaningful discussion of the complex relationships which can take place between these public sector organizations. It makes a major contribution to our knowledge of the system. The discussion of the above is subsequently juxtaposed against the role of ministers and departments in public sector management. In this regard, this study can be meaningfully assisted by more detailed case studies of departments (see pp. 274-310). At this point, the author grapples with an old debate concerning the actual relationship between central agencies and line departments in public management. There are different views in the public service with respect to the relative power of the central agencies in relation to line departments. The controversy continues in 2000 and beyond. Savoie concludes that the power has shifted to the prime minister and to the minister of finance and the president of the Treasury Board. However, experienced officials in Canada and abroad have cautioned against generalizations. One can recall the debates 495 that took place during the Trudeau years with respect to the relationship between the Prime Minister’s Office, the Privy Council Office, and the Department of Finance. Pursuant to the report of the Lambert Commission, the Department of Finance has performed a dominant role in public management. The review of departments is captured between Chapters 9 and 11, where the analysis indicates that there are competing views concerning the relative roles and power of central agencies versus line departments. These chapters make very interesting reading about the politics of public bureaucracy. In Chapter 9, an interesting analysis of staff-line relationships is presented (pp. 276-83). There is historical evidence to support the periodic emergence of strong ministers and departments (pp. 274-310). For example, the 1993 reorganization established some super ministries such as Human Resources Development Canada, which perform major coordinating roles in public sector management. There is also the issue of horizontal roles in government which continues to be a problem. This debate has taken place with respect to fiscal policy and human resources management (p. 61). The debate over the relationship between the Treasury Board Secretariat and the Public Service Commission provides an example of the latter challenge (pp. 193-238). There is also the issue of the need to improve policy capacity within the public sector. This has been addressed in the annual report of the Clerk of the Privy Council. Governing from the Centre: The Concentration of Power in Canadian Politics is an important study which captures several of the most recent developments in public sector management in Canada. The book should be required reading for both teachers of public administration and for practitioners in the public sector. It is a natural sequel to another by the same author entitled Taking Stock, which catalogued several recent changes in public sector management. This book, Governing from the Centre, is one of a CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL . XXVI, NO. 4 2000 496 Reviews/Comptes rendus series of studies that deal with problems of contemporary public sector management reforms. The analysis presents information which points to the complexities inherent in contemporary public sector management. The concentration of power cited raises questions concerning the recent assertion that responsive government means putting the needs of citizens first. It also deals with the perennial issue of cen- CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, tralization versus decentralization in the public sector management. This study describes the role of central agencies under the contemporary approach to public administration labeled, “New Public Management.” R.W. PHIDD, Department of Political Science, University of Guelph VOL . XXVI , NO . 4 2000 Reviews/Comptes rendus Regionalism, Multilateralism, and the Politics of Global Trade edited by Donald Barry and Ronald C. Keith. Vancouver: University of British Columbia Press, 1999. Pp. xviii, 302, index. This book, which gathers together papers presented at a conference held at the University of Calgary in October 1997, provides a good overview of regionalism and multilateralism, the two seemingly opposing political forces shaping the world trading system in a time of increasing globalization. It makes an important contribution to the ongoing debate about whether regionalism is supporting or undermining the global trading system. While written before the WTO Ministerial Meeting late last year, it is also useful background reading for anyone trying to understand the underlying forces and interests that prevented an agreement from emerging in Seattle to embark on another round of multilateral trade negotiations. The introductory chapter by Donald Barry and Ronald C. Keith sets the stage for the rest of the book, nicely laying out the main themes and issues to be explored. The body of the book includes: general chapters on regionalism and globalization; more specific chapters on the European Union, the NAFTA, and APEC as concrete examples of regional agreements; chapters on interregional relations between the EU and the United States, between North America and Asia, and between Asia and Europe (the so-called Asia Europe Meeting); and three chapters examining the implications of regionalism and multilateralism for Canada. The final chapter by Charles Doran does a very good job of pulling together all the main conclusions of the other chapters. Indeed, the introductory and concluding chapters are so complete that the lazy or busy reader need 497 not read the whole book to pick up the most important points made at the conference and to see them put into a broader perspective. While all the chapters of this book were of high quality, the chapters by Robert K. McCleery on the political economy of NAFTA expansion, by Carolyn Rhodes on the relationship between the European Union and the United States, and by Ronald C. Keith and Patricia L. Maclachlan on Canada’s APEC policy deserve special mention. The McCleery chapter, which is more quantitative than the rest of the book, is more likely to appeal to economists. Its quantitative nuggets include interesting data on trade flows in the Western Hemisphere and a useful table summarizing the estimates of gains from alternative regional trading arrangements in the Western Hemisphere. The Rhodes chapter, which is apt to be of more interest to political scientists, examines the evolution of the most important bilateral relationship in the global economy, that between the EU and US. It underlines the tensions that have developed as leadership in the global economy has progressed from US hegemony to US-EU bipolarity and describes the efforts to resolve bilateral issues through such institutions as the grand-sounding, but relatively modest, Transatlantic Partnership. The chapter by Keith and Maclachlan does an admirable job of explaining the unique Asian character of APEC that makes it so inscrutable compared to more traditional regional organizations. This book will be of interest to economists, political scientists, lawyers, public servants, and laypeople concerned about trade policy, trade law, and international relations. PATRICK GRADY, Global Economics Ltd. CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL . XXVI, NO. 4 2000 498 Reviews/Comptes rendus Gray Dawn: How the Coming Age Wave Will Transform America and the World by Peter G. Peterson. New York: Times Books, 1999. Pp. 280. In the unheralded 1980s movie Red Dawn, the omnipresent Reagan-era evil lurking over the horizon is communism. In the 1999 book Gray Dawn that omnipresent evil is the aging of the world’s population. In both cases, if a society lets its guard down the inevitable apocalypse can only be overcome by some extremely quick and drastic moves. To delay means destruction. This is the message that continually emerges from Peterson’s book on how the coming age wave will transform America and the world. The book is filled with metaphors rather than academic research. On the dust jacket, global aging is likened to a looming iceberg — failure to change course now will result in disaster (read Titanic). Peterson is ringing the alarm bell. And what new directions are recommended to avoid this fate? With the US firmly in mind, the author recommends longer working lives, more immigration, increasing fertility, stressing (his words) filial obligation, requiring individual retirement savings and targeting public benefits on the basis of need. Some background on the author may be useful in providing a context for these recommendations. Again the dust jacket is helpful. Peter G. Peterson is a 72-year old former US Secretary of Commerce who is currently chairman of an investment bank and a director of the Federal Reserve Bank of New York. He chairs the Council on Foreign Relations and the Institute for International Economics. Perhaps of most importance, however, he is one of the founders of the Concord Coalition, which he currently directs with Paul Volcker and others. The Coalition claims success at achieving its first goal of a balanced US federal budget and currently is working on bringing the future cost of federal entitlement spending under control. Given this background, many readers would see this as another book on apocalyptic demography promoting the neoCANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, conservative agenda to dismantle or hamstring government on important issues of social and economic policies (Gee and Gutman 2000). There is no doubt that the underlying premise of this book is correct. Declining fertility rates worldwide and rising longevity, especially in the developed world, have resulted in population aging. Moreover, he is also undoubtedly correct that this trend will raise unprecedented political, social, economic, and moral challenges in the new millennium. Also, he is substantially correct in observing that policymakers have largely ignored the implications of societal aging. Whether it is a time bomb as he maintains, especially for pensions and health care, or a growing challenge, however, remains more of a judgement than the result of research, especially in this book. Raising the retirement age and immigration levels are considered important to offset the emerging labour shortage and presumably, the inevitable rise in wages and labour income. Increasing fertility and filial responsibility (provide home care, etc.) repositions women in traditional roles, although Mr. Peterson is far too politically correct to state this implication. These roles likely mean withdrawing female labour from the workplace thereby potentially aggravating the impending labour shortage. The direct contradiction of these recommendations never seems to occur to Mr. Peterson. Moreover, the recommendations demonstrate a misunderstanding of current demographic facts. Over the first decade and a half of the twenty-first century in North America the children of the “boomers,” the “echo” generation, enter the labour market (Foot and Stoffman 1998). In the US this group is now almost as large as their boomer parents because US fertility has remained around replacement levels (2.1 children per woman), which is much higher than Europe (1.4) or Japan (1.3). Consequently the continuing labour force participation of the boomers in their fifties combined with the labour force entry of their echo children in their twenties result in no shortage of workers or taxVOL . XXVI , NO . 4 2000 Reviews/Comptes rendus payers. Is this demographic fact ignored either because it requires more than a cursory knowledge of demographics by the author or because it conflicts directly with the neo-conservative political agenda that underlies the recommendations? Ignoring the resulting decline in dependency allows the author to proselytize on the total dependency fallacy. In essence he argues that because much of the costs of dependency have been socialized and seniors cost more than children (two to three times, not ten times, as he implies), the impending demands of the seniors for public pension and health care outstrip any resources that will be released from expenditures on the young, primarily education. While this may be true in the US, it is not nearly so apparent in the lower fertility countries of Europe, Japan, and even Canada. However, even more revealing is Peterson’s belief that there is a fundamental difference between spending on one’s own children and on some anonymous retiree. This position ignores the fact that the retiree may be one’s own parent and certainly reinforces the individualistic, selfinterested values underlying the recommendations. This is not to say that there are not a few useful insights in this book. Two examples will suffice. First, mainly for the fertility reasons outlined above, North America does not face nearly the aging crisis (!) that Europe and Japan face. This means in the author’s view, that the coming upheaval and draconian policy measures will have to be even more dramatic in these older developed nations. Second, Peterson draws on personal anecdotal evidence to reinforce his claim that the political response has been denial resulting in political gridlock on aging issues. Because the aging trend is gradual, current politicians have little incentive to be proactive since, as Peterson quotes, the problems “won’t hit on my watch.” Perhaps surprisingly, Canada receives more than passing recognition in this book. There are 18 page references in the index to Canada compared to 41 for the United Kingdom, 15 for Japan, 14 for Swe- 499 den, 13 for Germany, 10 for Western Europe, 6 for Eastern Europe, and 5 for Mexico. For an academic audience this book smacks of the alarmist journalism that has now become too familiar in media that rely on sensationalist headlines to push their wares. The treatment of the issues is attention getting (not necessarily bad), superficial, and lacks careful research. Liberal use is made of population projection data, but socio-economic life-cycle data are ignored. For example, charitable giving increases with age, yet there is no discussion of the role of the not-for-profit sector in this book. Also, saving for retirement peaks in one’s fifties after family raising in one’s thirties and forties and the vast majority of the boomers are not there yet, so it is not surprising that surveys find that “onethird of boomers have saved nothing at all, and another third have saved too little to make a difference in retirement.” There are numerous other places where references to life-cycle information could have improved both the academic and policy content of the book. It is interesting that all of Peterson’s recommendations from raising the retirement age and immigration levels through targeting benefits and stressing (read mandating) individual saving and filial responsibility require a strong government for their implementation. No responsibility is placed on the corporate sector to contribute to the solutions either through funding or through reduced profitability, especially in the financial (pension management) or health-care sectors. In this regard, the neo-conservative agenda of this book is also its Achilles’ heel. It is doubtful if the challenges identified by the author and the implementation of his recommendations can take place without the cooperation of individuals, strong governments, and business. To leave the latter out of the solutions guarantees their failure. Peterson’s book provides a useful international perspective to the discussion on aging, but a different agenda is required to deal successfully with the challenges identified here and elsewhere (Mullan 2000). CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL . XXVI, NO. 4 2000 500 Reviews/Comptes rendus REFERENCES Foot, D.K. with D. Stoffman. 1998. Boom, Bust & Echo 2000: Profitting from the Demographic Shift in the New Millennium. Toronto: Macfarlane, Walter & Ross. Gee, E.M. and G.M. Gutman, eds. 2000. The Overselling of Population Aging: Apocalyptic Demography, Intergenerational Challenges and Social Policy. Don Mills: Oxford. Mullan P. 2000. The Imaginary Time Bomb: Why an Aging Population is not a Social Problem. London: I.B. Tauris. DAVID K. FOOT, Department of Economics, University of Toronto CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL . XXVI , NO . 4 2000 Reviews/Comptes rendus Enter at Your Own Risk: Canadian Youth and the Labour Market by Richard Marquardt. Toronto: Between the Lines, 1998. Pp. ix, 165. $25.00. The title of Richard Marquardt’s monograph on Canadian youth and the labour market, Enter at Your Own Risk, captures one of the new salient features of Canadian society in the 1990s — the uncertainty young people face in linking their education to jobs and careers. Poll data show increasing public pessimism and anxiety about employment prospects of the next generation. Thus, young people who are entering the now more difficult terrain of the transition to adulthood can use Marquardt’s well-written and thoroughly researched study as a guide. The study has general appeal because, by drawing on history, sociology, economics, and policy debates across a fairly wide time span, Marquardt manages, in a relatively few pages, to write a comprehensive description and analysis of the issue of youth and the labour market which is currently definitive. Beginning with a chapter setting out the youth employment issue, Marquardt then takes an historical tour of youth, family, education, labour market, and the state in five periods between 1850 and 1945. His next chapter focuses on the postwar years in which Canada reaches its Fordist pinnacle, followed by its transition to neo-liberalism and the risk society. The rapid moves after leaving secondary education into stable and well-paying, blue-collar work and from universities into the professional and semiprofessional occupations of the expanding public and private bureaucracies have given way to an uncertainty about whether young people will ever be able to leave secondary labour market jobs for primary sector employment where their work will match their educational attainment and their interests and be well-paid. The four chapters that constitute the main portion of Enter at Your Own Risk focus on the contemporary period roughly from the 1980s — the changes to and pressures on the educational system, 501 the restructuring of the labour market as a result of de-industrialization and downsizing both in the private and public sectors, consideration of earnings, income, and life-styles, and examination of public policy responses to labour market restructuring especially various training programs. Here as throughout his book, Marquardt continues to emphasize the complexity of the issue of youth employment. The choices that youth (and their parents) make in the transition to adulthood are very much conditioned by class, gender, race and ethnicity, and by region, the latter factor not only pointing to differences between provinces across Canada, but differences within provinces including urban/rural contrasts. The broad documentary evidence that Marquardt brings to bear in describing the youth, education, and employment relationship over time is an outstanding quality of his monograph. In addition to drawing extensively on academic and non-academic scholarship, he presents the arguments and data from numerous government and other studies not generally known or now forgotten and many hard to locate. In his conclusion, Marquardt highlights policy alternatives which relate to larger questions of how citizens might shape their society. Readers may be surprised to learn how closely Canada’s labour market strategies fit OECD policy analysts’ recommendations for a two-pronged (two-class) jobs strategy that, while making a bow to the promotion of knowledge-based, high-wage employment, really expects that the vast bulk of future employment will (and ought to) be based on the expansion of lowwage, low-skilled employment. Enter at Your Own Risk, is an excellent background study of a major social problem area in Canadian society today. It is detailed because this particular problem has a long history and is complex with respect to the social structural forces at work. The analysis is linked to conceptual notions that can be expanded by an instructor or followed up through footnotes and the bibliography in more theoretical works on the post-modern condition. In presenting the problem of youth employment, for instance, the CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL . XXVI, NO. 4 2000 502 Reviews/Comptes rendus reader is invited to consider certain theorists (Giddens, Beck) who argue that social institutions and behaviour of the post-modern period have become de-traditionalized with social roles and commitments becoming expanded matters of choice. Given the restructured economy, one can clearly debate how such social change is experienced by young people and whether more choice is more opportunity and freedom, or more uncertainty and risk. Thus, Enter at Your Own Risk, is a welcome resource in courses dealing with youth, inequality, employ- CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, ment and labour, Canadian society, and education. An attractive aspect of the book is its set of a dozen intriguing photographs of young people in work settings by Vincenzo Pietropaolo which visually invite one to wonder about their subjects’ personal histories: How have they threaded their way into the photo, and what are their hopes and aspirations as part of Canada’s future? T ONY TURRITTIN , Department of Sociology, York University VOL . XXVI , NO . 4 2000 Reviews/Comptes rendus Canada: The State of the Federation 1998/99: How Canadians Connect edited by Harvey Lazar and Tom McIntosh. Montreal and Kingston: McGill-Queen’s University Press for the School of Policy Studies, Queen’s University, 1999. Pp. viii, 394. $24.95. How Canadians Connect is published by the Institute of Intergovernmental Relations in association with the School of Policy Studies at Queen’s University. Publication has been supported by Heritage Canada. Its title suggests a focus on 1998/99. But the book proves not to be so “dated.” Some chapters are significant reviews of related literature, policy initiatives, data analysis covering lengthy time frames, and a wide ground of issues including suggestions for reform. For these and other reasons How Canadians Connect is a provocative book which will prove useful for some time to come. It is well-worth consideration as a possible text book. It is an excellent survey, from a diverse group of authors, of the economic, political, and social forces that act on Canada and Canadians from within and without and that alter our institutions and domestic and international relationships, particularly the role and significance of the state. It has, in tandem, a major focus on the question of whether Canadians are “more or less attached to their country.” On this the evidence is mixed. On the economic front, for example, interprovincial trade connections seem stronger, of “tighter weave,” including Quebec, than one might expect given the FTA and NAFTA and generally globalization. Yet other facts are particularly damning, for example, “the federal party system in Canada has broken down,” “national parties no longer serve as the sinews of a healthy federalism,” and “the Liberals essentially govern by default.” Each political party and institutional grouping has much to learn from this book, clearly, “some of the lessons are less than flattering.” Each ought to assess its current standing and contributions to the strengthening or weakening of the social democracy that is Canada and the Canada that might be. 503 Thus, How Canadians Connect is a “must read” for all “identity” groups and political parties, labour and business organizations. Teachers of, and students in, both discipline-based social science and related courses including interdisciplinary Canadian Studies at senior undergraduate and graduate levels will find it a mine of suggestions for debate and research on important social questions and policies. This is particularly so since the book’s 18 authors emphasize issues and assess the roles of groups, interests, and voices that range over the political spectrum. Their contributions are found in 13 chapters, organized into six parts, Overview (F. Lazer and T. McIntosh, How Canadians Connect); Role of the State (R. Whitaker, Canadian State; and A. Eisenberg, Two Pluralisms); The Economic Context (J. Helliwell, National Economy, M. Vachon and F. Vaillancourt, Interprovincial Mobility, and C. Sjolander, Foreign Policy); The Societal Context (T. McIntosh, Organized Labour; K. Day and Q. Grafton, Student Mobility; B. Tanguay, Political Parties); Identity, Citizenship and Culture (M. James, Redress Politics; D. Pritchard and F. Sauvagau, Values of Professional Journalists; F. Graves, T. Dugas and P. Beauchamp, National Attachments) and Chronology 1997-98 (M. Kluger). How Canadians Connect seems to guarantee reflection and debate on what is right and what is wrong and how we are to improve, or not, the lot of Canadians in an increasingly integrated world economy. What seems to be the desired end is the creation of institutions and values of social democracy at home, consistently connected to international institutions that, together, induce creativity, equality, and communitymindfulness and that, in turn, generate improvements in technical and social efficiency, fairness, and democracy. These institutional ends and the implied human nature are contentious and far from certain. W. ROBERT NEEDHAM, Director of Canadian Studies, University of Waterloo CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL . XXVI, NO. 4 2000 504 Reviews/Comptes rendus The Asian Financial Crisis: Causes, Cures, and Systemic Implications by Morris Goldstein, Policy Analysis in International Economics No. 55. Washington, DC: Institute for International Economics, 1998. Pp. xi, 77. Global Economic Effects of the Asian Currency Devaluations by Marcus Noland, Li-Gang Liu, Sherman Robinson and Zhi Wang, Policy Analyses in International Economics No. 56. Washington, DC: Institute for International Economics, 1998. Pp. xi, 104. Restoring Japan’s Economic Growth by A. Posen. Washington, DC: Institute for International Economics, 1998. Pp. 186. These studies are a trilogy published by the Institute for International Economics to examine the Asian financial crisis which shook global financial markets after June 1997. The first two chapters of Goldstein’s work chronicle the origins of the crisis documenting the imbalances and weaknesses in the domestic banking sectors and foreign borrowing activities of the ASEAN-4 economies of Thailand, Indonesia, Malaysia, and the Philippines in the early 1990s. In retrospect, their economies were characterized by excessive credit expansion and reliance on short-term foreign borrowing coupled with an inadequate regulatory oversight and supervision. Compounding these weaknesses were several aspects of their international trade relationships such as large current account deficits, concerns over the quality of domestic investment spending and appreciating real exchange rates. Foreign investors dramatically downgraded their confidence in the region culminating in the July 1997 floating of the Thai baht and contagion effects on the currencies and economies of other Asian countries. The final three chapters constitute the bulk of the study. They address policy issues including the author’s prescriptions and a careful review of the debate over the contentious IMF restructuring packages negotiated with Thailand, South Korea, and Indonesia in the late fall of 1997 and early 1998. The importance of Japan and China’s getting their houses in good CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, economic order is viewed as a prerequisite to achieving a sustained recovery from the crisis. The study finishes with Goldstein’s cogent “top ten list” of lessons learned which constitute a set of sensible prescriptions for avoiding future major crises and include strong support for a continuing role for the IMF. Noland et al. use a multi-sectoral, multi-country, computable general equilibrium model of real trade flows, trade balances, world prices, and real exchange rates to simulate the effects of alternative Asian currency devaluations and negative supply-side shocks on trade balances, GDP and real absorption in 17 regions, which together comprise the global economy. The authors support using this type of analytical framework to explore the global economic implications of the Asian financial crisis by arguing in the first chapter that the crisis and attendant exchange rate changes should be viewed as reflecting fundamental and persistent weaknesses in the financial affairs of the countries concerned. They reject an alternative view which would see the crisis as a reversible event hinging upon expectational factors, especially moral hazard considerations (foreign investors expected to be bailed out). This also happens to be consistent with Goldstein’s analysis. Their model is able to take into account, sector by sector (agriculture, mining, machinery, etc.), the effects of simultaneous complex multilateral exchange rate changes such as the fact that while the crisis brought about a depreciation of the Japanese yen visà-vis the United States and Western Europe, the yen appreciated relative to the ASEAN-4 and South Korea. Also interesting is the analysis of the effect of the crisis devaluations on China and their model’s indication that only a modest competitive devaluation by China would be required to restore its trade balance. Another major focus of the study is the negative impact of the Asian devaluations on the US trade balance and the possible protectionist trade policies that could be precipitated. Though not concerned per se with the Asian crisis, Posen’s work provides a useful Japanese backdrop. Both Goldstein and Noland et al. stress the critical importance of a stronger Japanese economy and inVOL . XXVI , NO . 4 2000 Reviews/Comptes rendus creased absorption of goods from its Asian neighbours to a regional return to economic well-being. Posen’s study is a comprehensive analysis of the genesis of the Japanese malaise of the 1990s. The root cause was not structural (insufficient reliance on free markets), cultural (too powerful interest groups) or demographic (concerns for an aging society). Rather it arose from ill-conceived macroeconomic policies characterized by excessive austerity, asset price deflation, and a lack of financial reform. Posner’s prescription for improved economic health correspondingly includes fiscal expansion (using permanent tax cuts funded with shortterm debt), monetary stabilization (announcing a 3 percent inflation target and the desire to avoid yen depreciation), and a financial reform package (limiting bank bailouts, re-capitalizing solvent banks, improving banking supervision, and limiting government competition with private bank deposits). Throughout this study Poser demonstrates an expert knowledge of macroeconomic literature as it pertains to Japan and OECD countries generally. The extensive bibliography is very useful. He displays a commanding knowledge of the recent behaviour of the Japanese economy 505 and an intimate acquaintance with the Japanese macropolicy-making system. While these three books are published as a trilogy, they are very different in focus and in level and depth of analysis. The Goldstein book is a good general treatment of the Asian financial crisis and international financial policy issues and would be a good addition to intermediate level courses in international finance. Because of the quantitative techniques employed, Noland et al. would better be found on the reading list of advanced undergraduate or graduate courses in macroeconomics. Posner’s book, because of the depth and detailed nature of the analysis, would be a valuable addition to any advanced level macro or public finance course in which a focus on Japan, perhaps as a case study, would be useful or where the objective is to understand how excellent macro policy analysis is carried out. JOHN N. BENSON, Department of Economics, University of Guelph CANADIAN PUBLIC POLICY – ANALYSE DE POLITIQUES, VOL . XXVI, NO. 4 2000