Building a Developmental State: The Korean Case Reconsidered

The unprecedented economic success of South Korea in the latter half of this century has made it a favorite test case for just about every theory of development. Explanations of its transformation have been especially valued since its galloping growth rates stand in such stark contrast to the prolonged stagnation of so many other developing countries. Among such explanations, the one that held sway for nearly two decades starting from the 1970s was neoclassical in fundamentals: South Korea developed, so the story went, because of its fidelity to free market principles and the wisdom of its state in adhering to a minimalist role in the developmental process. This pairing of economic success with a minimalist state stood in sharp relief against the contrasting pair of economic stagnation and an interventionist state, which seemed to obtain just about everywhere else in the developing world. The symmetry appeared to give the neoclassicals a watertight case: the solution to the developmental conundrum lay in minimizing the direct hand of the government in the economy. Since the late 1980s, however, a series of detailed case studies have served to raise grave doubts about the descriptive adequacy of the neoclassical story, at least as it pertains to Korea. In the work of Alice Amsden, Jung-en Woo, Robert Wade, Stephen Haggard, and others, it has emerged that the Korean state, as well as that in Taiwan, has been anything but minimalist; not only has it been involved