ABSTRACT East Asian economies have become major creditors in recent decades. However, while existing studies address the macroeconomic impact on the global economy of capital flows from East Asian economies, the impact of norm and policy diffusion that accompany such flows has received relatively little attention. This article assesses the content and impact of financial market norms that are being disseminated from Japan and South Korea, the largest creditors in the region after China. It finds that the governments of Japan and South Korea have promoted a set of hybrid norms that mix developmental and liberal market approaches in domestic capital management, characterized by emphasis on the prudential management of financial liberalization, policy finance and capital accumulation by promoting savings. These norms do not challenge the existing order in the financial domain but rather help bridge the gap between economic developmentalism and financial liberalization. Evidence for the presence and impact of these norms is established by examining Japan and South Korea's engagement in international financial rule‐setting organizations, in multilateral aid and in bilateral aid programmes.
Lee et al. (Mon,) studied this question.