Changes in Small and Medium-sized Business Policy through Historical New Institutionalism : Focusing on Path Dependence and Punctuated Equilibrium

This study examined how small and medium-sized enterprise(SMEs) policies focused on protecting and fostering SMEs changed under the Kim Dae-jung, Roh Moo-hyun and Lee Myung-bak governments in the 2000s through historical new institutionalism. A path-dependent institutional change appeared in that both the quantitative growth of SMEs through the Kim Dae-jung government’s venture business development policy and their qualitative growth through the Roh Moo-hyun government’s innovative SMEs development policy were promoted for the purpose of creating jobs and securing new growth engines. The policy ideas of strengthening the competitiveness of SMEs, expanding competition, and transitioning to a technology- and knowledge-intensive industrial structure influenced the actors’ choice. Under the Lee Myung-bak administration, due to the external factor of the global financial crisis, there were not many restrictions on policy ideas for actors’ selection of institution, resulting in a punctuated equilibrium in which the social policy nature was greatly weakened and the political nature was strengthened. The abolition of the collective private contract system and designation of distinct business system appeared as a form of punctuated equilibrium between the ‘protection and development’ paradigm and the ‘autonomy and competition’ paradigm. It suggests that policies need to support industries that require protection in a selective and focused manner to ensure competitiveness of SMEs. It also suggests that effectiveness through institutional change should be improved by presenting a clear single policy stance on policy ideas to be considered when changing the institution.