Corruption is typically understood as a sign of weak institutions and failed governance. But what if it is a deliberate political technology used to consolidate power, discipline rivals, and reshape political systems?

This is the argument advanced by University of Chicago sociologist Kimberly Kay Hoang in the latest episode of the APARC Briefing series. Drawing on years of ethnographic research across Southeast Asia, including Vietnam, Myanmar, Hong Kong, and Singapore, as well as offshore tax havens, Hoang uses a comparative Asian lens to show how both democratic and authoritarian governments strategically align with private capital, reinforcing elite power. Hoang joined APARC Director Kiyoteru Tsutsui to share core insights from her work.

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Kimberly Kay Hoang speaks on the APARC Briefing series with host Kiyoteru Tsutsui.

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She argues that corruption discourse often operates as a political tool, widely seen across Asian political economies and increasingly evident in the United States during the Trump era. This rhetoric, she says, tends not so much to dismantle institutions but to reshape them, concentrating authority in the executive and weakening checks and balances. According to Hoang, these patterns reflect a broader global shift toward more oligarchic forms of governance, where political power is increasingly concentrated among transnational elites.

"We often think of corruption as a failure of governance – that it's a weak state, and weak states can’t govern," Hoang says. "But in Southeast Asia and in other parts of East Asia, it has become an instrument for governance. It's a way of consolidating political power, weaponizing corruption."

From Vietnam's Hostess Bars to Global Finance

Hoang's research journey began in an unexpected place: working 12-hour shifts in Vietnamese hostess bars in 2009-2010, shortly after the global financial crisis. What started as an ethnographic study of the sex industry and human trafficking in Vietnam evolved into something far larger: a story of Asian ascendancy and Western decline playing out in micro-transactions.

"I started to witness local Vietnamese men turning down deals with Western businessmen and taking extraordinary deals from investors from China, parts of Southeast Asia – Hong Kong and Singapore – and Korea, Taiwan," Hoang recalls. When she examined foreign direct investment data, "the numbers lined up to what I was seeing at a micro level."

But when she presented these findings in the United States, the response was skeptical, even hostile. "People would say, 'Okay, yes, the economy is in decline, but America still has the strongest military,' or 'China is really dependent on the American economy, so if the American economy collapses, so will China's,'" she remembers. "It was a huge oversight of American arrogance to just believe that [Asian ascendancy] was impossible."

Her continued research led her to follow not just the money but "the people who move the money" – from Vietnam and Myanmar to Hong Kong and Singapore, and ultimately to offshore tax havens in the British Virgin Islands, Panama, the Seychelles, and the Cayman Islands.

The Architecture of Global Capital

What Hoang uncovered was what she calls an "architecture of global capital" – an invisible financial infrastructure built by "hidden engineers" including specialized wealth managers, lawyers, and financial advisors who coordinate across borders to move elite wealth beyond the reach of any single nation-state.

The scale is staggering: approximately $7.6 trillion in household wealth is hidden offshore globally, with the top 0.01% avoiding about 25% of their tax obligations through legal structures and shell corporations.

"We have to move beyond national boundaries," Hoang argues, "because global oligarchs choose the sovereigns and choose the jurisdictions that govern their financial transactions and activities."

This system creates what Hoang describes in her book, Spiderweb Capitalism: How Global Elites Exploit Frontier Markets (Princeton University Press), as a web of legal and financial gray zones that allow wealth to compound while evading accountability.

Corruption as Governance Mechanism

Hoang’s work exposes the connections between the rise of global elites, corruption, and the emergence of oligarchic governance. Across both Asia and the United States, she explains, corruption discourse operates as a mechanism for reshaping democratic governance by means of dissolving the boundary between political authority and economic power.

"What does that mean? It means that we no longer rely on institutions," she says. "People who have executive authority can just go after their rivals."

This creates what Hoang calls "anticipatory compliance," a situation in which political and economic elites preemptively align themselves with power centers. The mechanism works through strategic ambiguity: when corruption charges can be selectively deployed, everyone becomes potentially vulnerable, leading to self-regulation through fear.

While this pattern is well-established in countries like China and Vietnam, Hoang sees similar dynamics emerging in the United States. "Under the Trump administration, we've seen charges of corruption being weaponized as a tool of governance," she notes, while emphasizing that elements of this already appeared under the Biden administration.

Democratic Reordering, Not Collapse

When explaining the impacts of corruption discourse on democratic governance, Hoang is careful to distinguish between democratic collapse and what she terms "democratic reordering." Rather than overtly capturing the state, global oligarchs work through existing institutions, gradually redefining their function through moralized narratives, weakened oversight, selective enforcement, and strategic risk management. The outward forms of democracy remain intact, but the independence of courts, election fairness, and accountability mechanisms are steadily eroded. "They increasingly serve concentrated elite interests."

In comparing the United States to China, Hoang notes a crucial difference: "China has a long view. They're playing a 50-year view [...] If we're in this constant [electoral] cycle, and we've delegitimized oversight and political authority, [...] we need to have stronger independent institutions that outlast whoever is in office."

Finding Hope in Resistance

Despite her sobering analysis, Hoang sees reasons for optimism. "What gives me hope is that, if you look carefully, there are a lot of resistance movements," she says. "I think there's a growing battle between the millionaires and billionaires."

She points to resistance not just from grassroots movements but from millionaires who "don't want to live in a billionaire oligarchy world, who feel economically precarious vis-à-vis the extreme inequality."

The challenge, she argues, is that both mainstream and social media highlight extremes while missing the middle-level discourse and resistance movements that are actively organizing.

Kimberly Kay Hoang is Professor of Sociology and the College, and Director of Global Studies at the University of Chicago. In addition to Spiderweb Capitalism, she is the author of Dealing in Desire: Asian Ascendancy, Western Decline, and the Hidden Currencies of Global Sex Work (University of California Press). Her forthcoming work examines U.S.-China power relations in offshore financial centers.

The full APARC Briefing conversation with Hoang is available on APARC’s YouTube channel.

Southeast Asia’s megacities, long viewed as symbols of progress, are facing crises ranging from floods and ecological damage to displacement and widening inequality. Scholars of contemporary urban politics often attribute these predicaments to rapid globalization that originated in the mid-1980s. Yet APARC Visiting Scholar Gavin Shatkin argues they must be understood in the context of the Cold War era, when urban development agendas were molded by authoritarian regimes exerting political and economic control in the name of anti-communism.

Shatkin, an urban planner specializing in the political economy of urbanization and urban policy and planning in Southeast Asia, is a professor of public policy and architecture at Northeastern University. He recently completed his residency at APARC as a Lee Kong Chian National University of Singapore-Stanford fellow on Southeast Asia. Before heading to Singapore for the second part of his fellowship, he presented research from his new book project, which examines how U.S.-supported authoritarian regimes in Indonesia, the Philippines, and Thailand shaped urban politics in three megalopolises —Jakarta, Bangkok, and Metro Manila — during the 1960s and 1970s, with consequences that reverberate today.

Political Violence as Foundation

Shatkin refers to the period from the mid-1960s to the mid-1970s as Southeast Asia's "hot Cold War." During that time, in tandem with the armed conflict in Vietnam, Laos, and Cambodia, political violence spread through Indonesia, the Philippines, and Thailand, as the three countries witnessed the emergence of authoritarian regimes that cemented their rule by manipulating laws and institutions and deploying targeted, often extreme violence justified as necessary to combat communism.

In Indonesia, a U.S.-backed 1965 military coup, directed particularly at the Communist Party of Indonesia, led to the massacre of 500,000 to one million people, heralding General Suharto's 32-year authoritarian rule.

In the Philippines, amid leftist demonstrations and a communist insurgency, President Ferdinand Marcos declared martial law in 1972, marking the beginning of a decade defined by his administration’s widespread human rights violations, throughout which the United States continued to provide foreign aid to the country, considering Marcos a steadfast anti-communist ally.

And in Thailand, the imposition of the 1958 military dictatorship to counter communist threats and the 1976 crackdown by Thai police and right-wing paramilitaries against leftist protesters were pivotal points in establishing a royalist-nationalist model that defined "Thainess" (khwam pen thai) through loyalty to the monarchy, aligned with military power as well as American military aid and counter-insurgency policy guidance.

According to Shatkin, these were not isolated incidents but defining episodes of political violence that cemented authoritative oligarchic control over urban development. The explosive urbanization in Southeast Asian cities that followed in the mid-1980s must be read through the lens of this earlier period, when authoritarian regimes sought to exploit urban transformation to entrench political and economic power.

Oligarchic Politics

The Suharto regime's approach to Jakarta as a source of profit exemplifies this dynamic. Shatkin explains how, between 1985 and 1998, Indonesia's National Land Agency distributed land permits for extensive urban development across the Jakarta metropolitan region to a small network of oligarchic conglomerates, such as the Salim Group. These crony corporations, allied with Suharto through family ties and political patronage, came to dominate Indonesia’s economy. Many of these same corporate interests continue to influence development agendas in Jakarta today, owning exclusive rights to purchase and develop permitted land.

The same pattern of successive waves of government expansion of metropolitan regions through infrastructure development and the distribution of land to selected major conglomerates has repeated itself in Manila and Bangkok, creating in-country profit centers for economic interests and what Shatkin calls “an archipelago of exclusive gated elite spaces” that reinforces spatial dichotomy and segregation as each of these megacities also experiences a housing crisis.

For example, Shatkin’s research in Metro Manila during the late 1990s and early 2000s revealed that approximately 40% of the population lived in dense informal settlements. A significant portion of these residents were employed in the nearby container port, yet their wages were insufficient to afford legal housing near their workplace. This discrepancy highlights a structural dilemma where low-wage workers are effectively compelled to occupy land illegally.

Environmental crises in the three urban giants are also entrenched in political and social structures rooted in oligarchic and authoritarian legacies of the Cold War era, argues Shatkin. Thus, increasingly devastating floods in Jakarta, Metro Manila, and Bangkok have less to do with sea level rise and far more with the rapid spread of impervious surfaces and the extraction of groundwater resulting from uncontrolled urban sprawl on converted watershed lands within a relatively weak regulatory environment. Moreover, flooding mitigation solutions, like Indonesia’s Great Garuda seawall project, have perpetuated the same pattern of land giveaways to major developers.

Lessons from Urban Social Movements

Crucially, Shatkin's research shows that Southeast Asian urban activists themselves frame their struggles through the lens of Cold War legacies. For example, when Jakarta residents along the Ciliwung River faced eviction for flood mitigation in 2015, they challenged the Jakarta administration and the Ciliwung-Cisadane Flood Control Office in court, arguing the eviction was based on a Cold War-era law drafted during counterinsurgency operations that had no place in democratic Indonesia. They partially won the case.

In a similar vein, Thailand's Red Shirt movement, representing working-class people from the northeast, deliberately protested on land owned by the Crown Property Bureau, using iconography that critiqued the military-monarchy-elite alliance forged during the Cold War.

An example from Manila is the 2001 mass protests by urban, low-income groups in defense of President Joseph Estrada, who was impeached for corruption. Their support can be interpreted as a reaction against “anti-poor” discourse that originated in the Ferdinand Marcos era. For the urban poor, Estrada represented a powerful counterweight to this legacy of elite disdain.

"We need to listen to these protest movements on the ground,” says Shatkin. They do not primarily critique globalization but rather contest entrenched oligarchy and state paternalism forged by Cold War political violence. Thus, an alternative framework for understanding debates in urban politics of Jakarta, Manila, and Bangkok is to view them not merely as capitals shaped by globalization but as Cold War frontline sites.

Beyond Southeast Asia

The implications of Shatkin’s theoretical framework extend beyond Jakarta, Metro Manila, and Bangkok, and even beyond Southeast Asia. It illuminates how periods of political upheaval create enduring social, economic, and environmental inequalities.

Moreover, these three urban giants, which produce outsized shares of their nations' GDP, rank among the world's largest cities. Their futures will not only affect Southeast Asia but also global urban development patterns. Shatkin's work suggests that this future cannot be charted without reckoning with the past.

Donald Trump’s decisive victory in the 2024 U.S. presidential election has reignited debates about the United States' role in a world increasingly defined by geopolitical tensions, economic uncertainty, and democratic recession. The return of Trump to the White House will have profound implications for Asia. To assess the stakes for the region, APARC convened a panel of experts who weighed in on the potential risks and opportunities the second Trump administration’s policies may pose for Asian nations and how regional stakeholders look at their future with the United States. Another panel, organized by APARC’s China Program, focused on what’s ahead for U.S.-China relations.

High Stakes for the Asia-Pacific

APARC’s panel, The 2024 U.S. Presidential Elections: High Stakes for Asia, examined how the return of Trump’s political ideology and the macroeconomic effects of his foreign policy will affect Asia.

“We are witnessing the solidification of Trumpism as an influential political ideology,” stated APARC and Korea Program Director Gi-Wook Shin at the opening of the discussion, “one that has begun to transcend traditional  American conservatism. Trumpism — marked by a blend of economic nationalism, nativism, and a strongman approach to leadership —could have a huge impact not only in American society but also on the liberal global order.”

According to Shin, Trump’s policies, particularly his focus on unilateralism and economic self-interest, could significantly alter the political and economic dynamics of the Asia-Pacific region.

Political scientist Francis Fukuyama, the Olivier Nomellini Senior Fellow at the Freeman Spogli Institute, argued that Trump’s victory was no longer an anomaly but part of a larger trend of working-class voters shifting allegiance from the Democratic to the Republican Party. Fukuyama expressed concerns about Trump’s aggressive economic policies, including imposing broad tariffs on allies and adversaries alike, and warned that such policies could result in inflation, trade tensions, and long-term economic instability. In addition, he asserted that Trump’s reluctance to engage in foreign conflicts could undermine the United States’ commitments to security alliances, particularly in Asia.

APARC Deputy Director and Japan Program Director Kiyoteru Tsutsui emphasized the broader geopolitical implications of Trump’s policies, noting that Trump’s "America First" approach could further erode the international liberal order. He suggested that Japan would face significant challenges navigating the unpredictability of Trump’s foreign policies. According to Tsutsui, “There might be greater pressure to line up with the United States in dealing with China economically, which would  put a great deal of strain on the Japanese economy.” Such an alignment might also muddle Japan’s own diplomatic and security interests.

Gita Wirjawan, a visiting scholar with Stanford's Precourt Institute for Energy and former visiting scholar at APARC, focused on the stakes for Southeast Asia. Wirjawan argued that Trump’s economic policies, such as protectionism and prioritizing economic growth over democratic principles, could embolden right-wing populist movements in Southeast Asia. He suggested that parts of Southeast Asia could be a natural beneficiary of a reallocation of financial capital from the U.S. as companies diversify supply chains by establishing operations outside China in response to Trump’s planned tariffs. Yet, growing economic inequality in Southeast Asia, particularly in urban areas, could fuel the rise of similar nationalist policies, undermining efforts to promote inclusive, democratic development.

Shin highlighted the challenges South Korea might face under a second Trump presidency. Trump will likely demand higher defense payments from South Korea, potentially straining the U.S.-ROK alliance. This could put President Yoon in a tough spot, especially as trilateral U.S.-Japan-Korea cooperation has been progressing well but faces uncertainty. Economically, South Korean firms may struggle if U.S. policies like the Inflation Reduction Act and CHIPS Act are rolled back, as subsidies were crucial for their investments in the U.S. On North Korea, Shin noted that Trump may resume summit diplomacy with Kim Jong Un, leaving South Korea sidelined and potentially sparking an arms race in Northeast Asia. 

The panelists all emphasized that Asia, with its diverse political landscapes, would need to navigate a new era of economic nationalism and geopolitical unpredictability, with potential challenges to economic stability and democratic norms.

A Focus on U.S.-China Relations 

The second panel, "Crossroads of Power: U.S.-China Relations in a New Administration," focused specifically on the evolving dynamics of U.S.-China relations in the wake of the election. Moderated by APARC China Program Director Jean Oi, the discussion featured Shorenstein APARC Fellow Thomas Fingar, and Peking University's Yu Tiejun, the APARC's China Policy Fellow during fall 2024. The panelists analyzed the potential trade, security, and diplomacy shifts between the two global superpowers, particularly in light of Washington's bipartisan consensus on China. 

Central to the discussion was the continuity of U.S. policy toward China under the first Trump administration and the Biden administration. Examples of this continuity included recent tariff increases on Chinese imports, a new U.S. Department of the Treasury program to screen U.S. outbound foreign investments in key sectors, and tighter export controls on critical technologies like quantum computing and advanced semiconductors. The panelists explored the economic and strategic ramifications, noting that these policies could disrupt existing trade patterns. 

Another area of concern was China’s uneven implementation of the 2020 Phase One  trade deal it negotiated with the U.S., in which China had committed to domestic reforms and $200 billion of additional U.S. imports. This failure could buttress the new administration’s plan to increase tariffs, complicating diplomatic efforts between Washington and Beijing. Fingar noted that while China has made efforts to diversify its supply chains, these changes might not be enough to shield it from the effects of U.S. economic policies, which could include escalating tariffs or additional restrictions on Chinese exports. 

The conversation also touched on broader geopolitical considerations, particularly concerning China’s role in the ongoing war in Ukraine. The panelists discussed the potential for cooperation or de-escalation in U.S.-China relations, with China’s positioning on the war serving as both a point of contention and a possible avenue for diplomatic engagement. 

Underscoring the deepening complexities in U.S.-China relations post-election, the panelists highlighted the uncertainty surrounding U.S. foreign policy under a second Trump administration, particularly regarding the role of people-to-people exchanges in fostering mutual understanding.

Both events emphasized the multifaceted consequences of Trump’s return to power for Asia and the global international order. While the discussions highlighted the challenges posed by the rise of economic nationalism, trade tensions, and shifting security priorities, they also pointed to potential areas of cooperation and the evolving dynamics of global diplomacy.

In the Media

From Center Fellow Oriana Skylar Mastro:

What a Second Trump Term Means for the World
OnPoint – WBUR, Nov 12 (interview)

Race to the White House: How the US Election Will Impact Foreign Policy
UBS Circle One, October 23 (interview)

From Visiting Scholar Michael Beeman:

On Korea-U.S. Economic Cooperation in the Era of Walking Out
Yonhap News, Nov 20 (featured)

Trump Looking for Trade 'Reset' with Most Countries: Ex-USTR Official
Nikkei, Nov 16 (interview)

How Southeast Asia Can Weather the Trump Trade Typhoon
The Economist, Nov 14 (quoted)