Narrow Results

Whether foreign aid promotes or hinders democratic institutions has been debated with opposing views. This paper investigates short- and long-run effects of foreign aid on democratization in post-conflict Cambodia using autoregressive distributed lag bounds testing and Gregory–Hansen structural break testing approach for cointegration over 1980–2015 period. The findings reveal that net bilateral foreign aid per capita, aggregated and classified into purpose-based ‘governance aid’, ‘economic aid’, ‘other aid’ and ‘donor-specific aid’ from the US, EU, France, Australia and Japan, promote long-run democratization. In the short run, only governance and economic aid appear to have a consistent positive effect on democratization.

The Cambodian banking sector has rapidly expanded in recent decades, although there are concerns about the performance of Cambodian banks and the country’s banking sector. A paucity of empirical evidence to clarify the real issues in the banking sector also makes it difficult to formulate effective policy measures to address any potential problems. This study provides empirical evidence by estimating the cost function and efficiencies of 34 commercial banks over the period from 2012 to 2015. We find that the average cost efficiency scores range from 0.60 when measuring bank outputs as loan and deposit amounts, and 0.77 when measuring bank outputs as interest and non-interest income, suggesting that if they are operated more efficiently, they could cut costs by 40% in fund mobilization and 23% in profit making while keeping the same output level. We also find that the Cambodian banks have experienced an improvement in efficiency scores over the period for both aspects of banking activities. Furthermore, we find that expanding a branch network into rural areas is inefficient for bank management, and holding excessive liquidity is associated with higher efficiency, but diversification in bank business operations is negatively associated with cost efficiency of Cambodian commercial banks.

Encouraging informal firms to register with the government is a key policy issue for developing economies. However, the impact of formal registration on firm performance remains inconclusive. This paper constructs a nationally representative panel data set on registered and unregistered establishments in Cambodia by using the Economic Census in 2011 and the Inter-censal Economic Survey in 2014; the Economic Census surveyed all nonfarm establishments and enterprises without any establishment-size threshold, which served as a credible sample frame for the Inter-censal Economic Survey. To mitigate selection bias, I employ a difference-in-differences method combined with propensity-score matching and a propensity-score-weighted regression method. My results show that formalization has a significantly positive impact on sales, value added, and regularly employed workers, but yields little effect on labor productivity. While formal registration alone may not boost productivity, it can encourage the business growth of formalized firms by hiring more formal workers.

For the past two decades, since the political situation became stable, Cambodia has recorded a very rapid economic growth rate. In the meantime, globalization has progressed both in terms of the expansion of international trade and foreign direct investment (FDI) inflows. This paper applies small sample cointegration tests and error correction models to reveal the determinants of Cambodia’s rapid economic growth. The cointegration test results support the existence of a long-run equilibrium relationship among the variables concerned. The error-correction models show that expansion of international trade values has caused the rapid economic growth in Cambodia, regardless of the measure of international trade used.

This paper examines how China has successfully translated its economic might into political clout in Laos and Cambodia. The country’s role as a major trading partner, foreign investor, and provider of aid to both countries has contributed substantially to their national development. This massive influx of Chinese investment and aid has also yielded positive results, as both countries have demonstrated a more accommodating attitude toward Beijing on a variety of issues. However, Chinese economic statecraft has had differing degrees of influence on the foreign policymaking of Laos and Cambodia, particularly with regard to their foreign policies toward Vietnam, a critical secondary state in Southeast Asia. While Cambodia has been less hesitant to bandwagon with China, Laos is still seeking to balance between China and Vietnam. This paper argues that Laos and Cambodia’s existing perceptions of Vietnam dictate in part how they respond to China’s economic inducements and affect the outcomes of Chinese economic statecraft.

In January 2014, a general strike brought one million workers on to the streets of Cambodia in support of wage rises in the garment sector. Dispersed using lethal force, the longer-term response of state authorities to workers’ increasingly vocal dissent was the passing of the Law on Trade Unions in 2016. Cambodia’s use of the law to stifle opposition exemplifies wider trends in Southeast Asia and beyond towards an authoritarian variant of neo-liberal development. Caricatured as the “return of the strongmen” in popular discourse, academic scholarship too tends to privilege a totalising and top-down narrative of this shift. In this chapter, I call for better appreciation of local geographies of authoritarian change and argue that an anti-geopolitics frame can help elucidate its ground-up dynamics. Drawing from data collected as part of a 3-year institutional ethnography of the trade union movement in Cambodia, I show how the Cambodian “crackdown” was shaped, provoked, and resisted by a hitherto marginalised and overlooked force in national society: garment workers. I argue that an anti-geopolitics approach can better elucidate the contingent nature of Southeast Asia’s authoritarian (re)turns, as this strengthening of the state simultaneously engenders its growing fragility by eroding the vestiges of façade democracy on which the regime’s legitimacy is based.