Korea's Recovery since the 1997/98 Financial Crisis: The Last Stage of the Developmental State

Click to increase image sizeClick to decrease image size Notes The official IMF position can be found in the Executive Board assessments. For example, the assessment of the IMF Executive Board in the 1999 Article IV Consultations. IMF, 'IMF Concludes Article IV Consultation with Korea', Public Information Notice (PIN) No. 99/115, http://www.imf.org/external/np/sec/pn/1999/pn99115.htm (accessed 18 March 2008). The IMF country reports and the large number of staff working papers offer a background analysis of the official view, which highlights the role of market reforms in economic recovery. See for example, IMF Staff, Staff Report for the 2004 Article IV Consultation (Washington DC, 2005), or look at the book edited by former IMF representatives in Seoul: David Coe & Se-Jik Kim (eds), Korean Crisis and Recovery (International Monetary Fund, 2002). Frank Veneroso & Robert Wade, 'The Asian Crisis: The High Debt Model Versus the Wall Street-Treasury-IMF Complex', New Left Review, No. 228 (1998), pp. 3–20; Robert Wade, 'From "Miracle" to "Cronyism": Explaining the Great Asian Slump' (1998); Ha-Joon Chang, J. Gabriel Palma & D. Hugh Whittaker, Financial Liberalization and the Asian Crisis (Palgrave, 2001); Ha-Joon Chang, Hong-Jae Park & Chul Gyue Yoo, 'Interpreting the Korean Crisis: Financial Liberalisation, Industrial Policy and Corporate Governance', Cambridge Journal of Economics, Vol. 22, No. 6 (1998), pp. 735–46; Seung-Il Jeong, Crisis and Restructuring in East Asia: The Case of the Korean Chaebol and the Automotive Industry (Palgrave Macmillan, 2004). The most important publications on the developmental state in Korea are Alice H. Amsden, Asia's Next Giant: South Korea and Late Industrialization (Oxford University Press, 1989); Meredith Woo-Cumings, Race to the Swift: State and Finance in Korean Industrialization (Columbia University Press, 1991); Peter B. Evans, Embedded Autonomy: States and Industrial Transformation (Princeton University Press, 1995); Eun Mee Kim, Big Business, Strong State: Collusion and Conflict in South Korean Development, 1960–1990 (State University of New York Press, 1997); Robert Wade, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton University Press, 2004); Ha-Joon Chang, The East Asian Development Experience: The Miracle, the Crisis and the Future (Zed Books and Third World Network, 2006). World Bank, The East Asian Miracle: Economic Growth and Public Policy (Oxford University Press, 1993). See, for example, Hyun-Chin Lim & Jin-Ho Jang, 'Neo-Liberalism in Post-Crisis South Korea: Social Conditions and Outcomes', Journal of Contemporary Asia, Vol. 36, No. 4 (2006), pp. 442–63. See, for example, the collection of papers by Ha Joon Chang, The East Asian Development Experience. Linda Weiss, 'State Power and the Asian Crisis', New Political Economy, Vol. 4, No. 3 (1999), pp. 317–42; Elizabeth Thurbon & Linda Weiss, 'Investing in Openness: The Evolution of FDI Strategy in South Korea and Taiwan', New Political Economy, Vol. 11, No. 1 (2006), pp. 1–22. Steven Kent Vogel, Japan Remodeled: How Government and Industry Are Reforming Japanese Capitalism (Cornell University Press, 2006). Iain Pirie, 'The New Korean State', New Political Economy, Vol. 10, No. 1 (2005), pp. 25–42. Theda Skocpol, 'Bringing the State Back In: Strategies of Analysis in Current Research', in Peter B. Evans, Dietrich Rueschemeyer & Theda Skocpol (eds), Bringing the State Back In (Cambridge University Press, 1985), p. 16. Evans, Embedded Autonomy. Pirie, 'The New Korean State'. Former IMF director Horst Koehler proposed that 'the close cooperation between Korea and the IMF over the last few years has been exemplary and in many respects serves as a model for other countries.' (IMF, News Brief No. 01/82, 22 August 2001, http://www.imf.org/external/np/sec/nb/2001/nb0182.htm) (accessed 29 September 2008). The reforms that were agreed upon, starting with the first letter of intent dated 3 December 1997, can be accessed at: IMF, Korea country page, http://www.imf.org/external/country/KOR/index.htm (accessed 29 September 2008). See Samsung Economic Research Institute, Three Years after the IMF Bailout, A Review of the Korean Economy's Transformation since 1998, Seoul, 2001, p. 22. See, for example, B.: IMF Independent Evaluation Office, The IMF and Recent Capital Account Crisis: Indonesia, Korea, Brazil, Evaluation Report (IMF, 2003). Based on data from the KOSIS database of the Bank of Korea, http://www.bok.or.kr (accessed 30 May 2008). Thurbon & Weiss, 'Investing in Openness'. See Asian Development Bank statistics, http://www.adb.org (accessed 19 November 2007). Korea's GINI coefficient increased significantly from 0.283 in 1997 to 0.310 in 2004. This is the third most unequal distribution of income in the OECD, with only Mexico and the USA showing greater disparity. (See Joong Ang Ilbo, 25 February 2005, and National Statistical Service, Annual Report on the Household and Expenditure Survey, Seoul (various years)). Korea Times, 12 March 2003. The Economist, 21 October 2006. This statistic excluded investments from Hong Kong and the British Virgin Islands to the PRC. (See Table 2 at The US/China Business Council, http://www.uschina.org/statistics/2005foreigninvestment.html). IMF Staff, 'Staff Report for the 2004 Article IV Consultation', p. 6. National Statistical Office, KOSIS, http://www.nso.go.kr (accessed 19 November 2007). See OECD, Economic Surveys: Korea (OECD, 2003), p. 52. See IMF, IMF Country Report Korea (IMF, 2003), p. 102. See IMF, Country Report Korea. OECD, 'OECD Statistics', http://stats.oecd.org (accessed 28 February 2008). Thurbon & Weiss, 'Investing in Openness.' Thomas Kalinowski, 'Democracy, Economic Crisis, and Market Oriented Reforms', Comparative Sociology, Vol. 6, No. 3 (2007), pp. 344–73. The share of people who said that 'democracy was always preferable' dropped from 69 per cent in 1997 to 49 per cent in 2001/02. On the other hand the share of people who said that 'authoritarianism is sometimes preferable' increased from 20 to 33 per cent in the same period of time. See Asia Barometer Project, Korea Barometer Survey, several years, http://www.koreabarometer.org (accessed 29 September 2008).