The Korean Developmental State

This book analyzes, from an historical comparative perspective, the Korean economic development model, the extent to which it has changed from its classical model, and what constitutes its changes and continuity. It holds that, unlike studies claiming dissolution of Korean developmentalism, the Korean state maintains its characteristics of state-led capitalism despite significant changes in policies and instruments, rather than converging toward an Anglo-Saxon-style free market system. It emphasizes that the continuity of state-led capitalism is compatible with institutional change. Some institutionalists insist the continuity of Korean developmentalism based on path dependency. In contrast, this book argues that Korean capitalism could sustain its state developmentalism by changes in policies and instruments to improve national industrial competitiveness in the changed context of international competition. The book’s layout Chapter 1 introduces the puzzles and main arguments of this book and the methods and objects of study. Next, this books begins in chapter 2 with a critical examination of existing studies on the changes and continuity of Korean state-led capitalism, and presents theoretical alternative and analytic frameworks. Chapter 3 presents an overview of the history of Korean economic growth and what caused such rapid growth over 50 years, mainly based on economic statistical data. In this chapter, I offer reference points for discussions in the next chapters by showing that the driving forces behind Korea's economic growth have significantly changed. In chapters 4 through 6, this study argues that the qualitative transition of the Korean economy is not through the private firms’ voluntary actions in the free market but by the state’s strategic attempts and their interactions with corporations. Specifically, chapter 4 analyzes the classical model of state-led capitalism in Korea. The traditional Korean developmental state established in the 1960s and 1970s was an authoritarian state dirigisme system, a variant of state-led capitalism. Chapter 5 focuses on the extent to which Korean state-led capitalism has changed, and why we can understand Korea’s current political and economic system as another variant of state-led capitalism despite significant changes in its industrial policies and institutions. Chapter 6 explores why and how Korean state-led capitalism has evolved. Specifically, we examine why Korean capitalism gave up its traditional model of state-led capitalism but did not converge toward Anglo-Saxon-style free market system or change toward a European corporatist coordination system. Finally, chapter 7 summarizes the key questions and concludes with key arguments.