Bank loans based on personal connections or government guidance rather than investments prospects for high returns, implicit government guarantees, empire-building, etc. I give equal weight to the flaws in the economic fundamentals, on the one hand, and to excessive swings in speculators' enthusiasm, on the other hand. I see no need to choose between blaming the countries and blaming the speculators. IMF programs should sometimes involve structural conditionality in addition to macroeconomic conditionality. Keynesianism is alive and well in Asia.
Fiscal expansion is expansionary in the short run, and fiscal contraction is contractionary.
This is contrary to the textbook theory of targets and instruments. Perhaps the lines for internal balance and external balance don't intersect. We thought we had learned that Mexico, Thailand and Korea made the mistake of waiting too long, until reserves ran low, so that by then there was no good way out. Instead, when the devaluation finally came in January, Brazil's trade balance improved sharply and the output and employment did far better than neighboring Argentina. But one could argue that political instability would have done Indonesia in no matter what.