We examine the separation of ownership and control for 2,980 corporations in nine East Asian countries. In all countries, voting rights frequently exceed cash-#ow rights via pyramid structures and cross-holdings. The separation of ownership and control is most pronounced among family-controlled "rms and small "rms. More than two-thirds of "rms are controlled by a single shareholder. Managers of closely held "rms tend to be relatives of the controlling shareholder's family. Older "rms are generally family-controlled, dispelling the notion that ownership becomes dispersed over time. Finally, signi"cant corporate wealth in East Asia is concentrated among a few families. � 2000 Elsevier Science S.A. All rights reserved. JEL classixcation: G32; L22

Transaction-cost politics views economic policymaking as a political process constrained by asymmetric information and limited commitment possibilities. This paper examines some implications of this perspective for less-developed countries considering policy reform. It emphasizes that success requires reform of the rules and institutions which govern the strategic interaction of the participants in the political game, and that reforms must cope with the special interests and asymmetric information which already exist. In this light, it examines some broad issues of the design of constitutions and institutions (definition and enforcement of property rights, control of inflation and of government expenditures, federalism, and redistribution), as well as some specific issue of the design of organizations and incentives (problems posed by the interaction of multiple tasks and multiple interests, and their interaction with the limitations on auditing and administration that exists in many LDCs).

This paper is dedicated to the memory of Guillermo Molinelli, who as friendly critic and invaluable source of knowledge challenged each and every aspect of this project. We are indebted to Matías

prepared for the UNRISD project on

This paper is dedicated to the memory of Guillermo Molinelli, who as friendly critic and invaluable source of knowledge challenged each and every aspect of this project. We are indebted to Matías Iaryczower, Sebastián Saiegh, Mark Jones, Valeria Palanza and Juliana Bambaci for valuable input into this project. We received useful comments Public policies are the outcomes of complex intertemporal exchanges among politicians. The basic institutional characteristics of a country constitute the framework within which those transactions are accomplished. We develop a transactions theory to understand the ways in which political institutions affect the transactions that political actors are able to undertake, and hence the policies that emerge. We argue that Argentina is a case in which the functioning of political institutions has been such that it prevented the capacity to undertake efficient intertemporal political exchanges. We use positive political theory and transaction cost economics to explain the workings of Argentine political institutions, and to show how that maps into lowquality