Contradictions and Limits of a Developmental State: With Illustrations from the South Korean Case

Studies of the rapid rise of East Asian nations in the world economy have focused on the “strong” and “developmental” state, documenting the foundations of the rise of the state and its remarkable achievements. Absent from these studies has been analysis of how the state changed as a result of development, the causes of change, and the actors involved in this transition. This study focuses on the case of South Korea, where the state's influence in the economy declined due to historical pressures and the inherent contradictions of autonomy and institution. The paradox of South Korea s remarkable success in development was that it forced the state to reevaluate its raison d'etre and to curtail its functions. The weakening developmental state is presented with unusual challenges when a more dramatic breakdown of the authoritarian regime and ensuing democratic consolidation occur. The former process is subsumed under broader, sweeping political reforms, and the political environment of democracy makes it difficult for the state to choose between the capitalists' demand for a protectionist government and labor's demand for a welfare state.