THE débacles at Enron, WorldCom, Ahold and Vivendi have left western pontificators on corporate governance a bit short of moral firepower. Yet it is important to keep a sense of proportion. Fraud, corruption, cartels, collusion and the unfair treatment of minorities are rare in America and Europe. But they are all too common in East Asia and other emerging markets. The question for such places is: should corporate governance be modelled precisely on the richer countries—or can they develop versions of their own?

Since the financial collapse of 1997, several East Asian countries have overhauled their corporate governance, putting new powers in the hands of the courts and setting up new regulators. In some, such as Malaysia, this has worked. But in others, new institutions co-exist with the same bad old attitudes. Indonesia has dawdled for two years over restructuring the $13.9 billion debt owed by Asia Pulp & Paper, the biggest defaulter in emerging markets; the company has favoured domestic bondholders over foreign investors. In Thailand, foreign creditors have been shabbily treated, most notably in the case of Thai Petrochemical Industries. A new bankruptcy court has, extraordinarily, given the finance ministry power over this bust conglomerate's assets, which could mean that partial control is returned to Prachai Leophairatana, the well-connected tycoon who drove it into bankruptcy in the first place (see article). And in South Korea SK Corp, the third-biggest chaebol, has rescued a tottering sister company, to the fury of its foreign investors.

Asia's traditional corporate model sits uneasily with modern practice. Families are a key source of capital, contacts and customers. That is logical enough when uncertainties and risks are high and capital markets underdeveloped. Interlocking networks of subsidiaries and sister companies can allow funds to flow quickly into promising new businesses. But such networks are opaque, and discriminate against outside investors. Moreover, the ambiguous role of the state, as not only a regulator but often a shareholder in Asian companies, creates conflicts of interest and gives too much power to politicians.

Several forces are pushing for improvement. East Asian families are smaller, so tycoons more often have to find outside managers. The modern heir may have not only an MBA from Harvard Business School but also western notions of how to run a business. It is becoming clearer that opacity costs money, as untrusting foreign investors demand bigger returns. And all Asian countries crave the cloak of international respectability, from membership of the OECD club to the kudos of hosting the Olympic Games or World Cup.

Good governance is hard to achieve so long as bankruptcy courts and judges are inexperienced or easily pressured. In a new white paper, the OECD suggests that Asian countries should look for ways to protect minority shareholders that can be triggered by shareholders themselves, without waiting for the courts or regulators to intervene. These might include, for instance, allowing minority shareholders who have voted unsuccessfully against a large transaction to insist that the company buy out their shares at the value prevailing before the transaction took place.

East Asian governments should create rules that are easy to enforce, even if they diverge from practice in Delaware or London. Enthusiasm for better governance and shareholder rights matters more than the precise shape of institutions.