Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 17, No. 3, pp.275-307
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 2004
Received 04 Nov 2004 Revised 20 Dec 2004

Political Institutions and Economic Development: A Study in Economic Discrimination and Political Philosophy

Sung-Hee Jwa ; Yong Yoon
President, Korea Economic Research Institute (KERI), FKI Building 12 Fl. 28-1, Yoido-dong, Yeongdungpo-ku, Seoul 150-756, Korea, Tel: +82-2-3771-0004, Fax: +82-2-785-0270/1
Visiting Researcher, Korea Economic Research Institute (KERI) and Ph.D. Candidate, Seoul National University, Tel: +82-2-3771-0048

JEL Classification: B40, D63, J79, O10


Providing what we believe ought to be the economics perspective, this paper introduces an approach to understanding the economic and political forces driving economic development. Adopted here is a vertical view of the world, through which the notion of economic discrimination (ED) plays a central role. ED, it is argued is a necessary condition for economic development, while its negation, egalitarianism, which seems much prevalent in modern-day democracies, is the seed to economic digression. This paper also traces the growth of egalitarianism in classical Western political philosophy, and also weighs the importance and relevance of the ED paradigm in the backdrop of classical and neoclassical economic thought. To further illustrate its usefulness, we speculate on the development potentials of various types of regimes utilizing a political-economy axis.


Economic development, Economic discrimination, Political institutions


  • Blaug, Mark. Economic Theory in Retrospect. 3rd Edn., Cambridge: Cambridge University Press, 1978.
  • Chang, Ha-Joon. Kicking away the Ladder: Development Strategy in Historical Perspective. London: Anthem Press, 2003. []
  • Dahl, A. Robert. On Democracy. New Haven: Yale University Press, 1998.
  • Dahl, A. Robert. A Preface to Economic Democracy. Cambridge: Polity Press, 1985. []
  • Fleischacker, Samuel. On Adam Smith's Wealth of Nations. Princeton: Princeton University Press, 2004.
  • Friedman, Milton. “The Methodology of Positive Economics.” In Essays in Positive Economics. Chicago: University of Chicago Press, 1953.
  • Fukuyama, Francis. The End of History and the Last Man. London: Penguin Books, 1992.
  • Glaeser, Edward L., La Porta, Rafael, Lopez-de-Silanes, Florencio, and Shleifer, Andrei. Do Institutions Cause Growth? NBER Working Paper 10568, 2004. []
  • Hayek, Friedrich August von (1952). The Counter-Revolution of Science: Studies on the Abuse of Reason. Indianapolis, IN: Liberty Press, 1979.
  • Hayek, Friedrich August von (1952). “The Theory of Complex Phenomena.” In Mario Bunge (ed.), The Critical Approach to Science and Philosophy: Essays in Honor of K. R. Popper. New York: Free Press, 1964.
  • Hegel, Georg W. F. (Originally Published 1807). The Phenomenology of Mind. Trans. T. M. Knox, London: Oxford University Press, 1967.
  • Henrekson, Magnus, and Ulf, Jakobsson. “Where Schumpeter Was Nearly Right-The Swedish Model and Capitalism, Socialism and Democracy.” Journal of Evolutionary Economics 11 (No. 3 2001): 331-58. []
  • Hobbes, Thomas (Originally Published 1651). In C. B. MacPherson (ed.), The Leviathan. Harmondsworth: Penguin, 1968.
  • Hodgson, Geoffrey M. Evolution and Institutions. Cheltenham, UK: Edward Elgar, 1999.
  • Jacobs, Jane. Cities and the Wealth of Nations. New York: Random House, 1984.
  • Jevons, W. Stanley (First Published 1871). The Theory of Political Economy. London: Macmillan and Co.
  • Jwa, Sung-Hee. “Why Firms and Markets in Economics?” Seoul Journal of Economics 15 (No. 2 2002): 277-94.
  • Jwa, Sung-Hee. “The Chaebol, Corporate Policy and Korea's Development Paradigm.” In Sung-Hee Jwa and In Kwon Lee (eds.), Competition and Corporate Governance in Korea. Cheltenham: Edward Elgar, 2004.
  • Jwa, Sung-Hee, and Yong Yoon. A New Look at Development Economics through Korea's Experience: The Paradox of Economic Development. Paper Presented at the 2004 KDI-KAEA Conference, Seoul: KDI-KAEA, 2004.
  • Locke, John (First Published 1690). Second Treatise on Civil Government. Prometheus Books, 1986.
  • Markell, Patchen. Bound by Recognition. Princeton NJ: Princeton University Press, 2003.
  • Marx, Karl (Original Work Published 1867). Capital: A Critique of Political Economy. Penguin Books; Reprint Edition, 1992.
  • Merriam-Webster Online Dictionary. Link, .
  • Mill, John Stuart (1859). “On Liberty.” In J. M. Robson (ed.), Collected Works of John Stuart Mill. Toronto: University of Toronto Press, 1963.
  • Nagel, Thomas. Equality and Partiality. Oxford: Oxford University Press, 1991.
  • Nietzsche, Friedrich (Written: 1886, First Published: 1909-13). Beyond Good and Evil. New York: Vintage Books, 1989.
  • North, Douglass. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press, 1990. []
  • North, Douglass, and Thomas, R. P. The Rise of the Western World. Cambridge: Cambridge University Press, 1973.
  • Nozick, Robert. Anarchy, State, and Utopia. New York: Basic Books, 1974.
  • Plato. “Republic.” In John M. Cooper (ed.), Plato, Complete Works. D.S. Hutchinson, Indianapolis: Hackett, 1997.
  • Plato. “Laws.” In John M. Cooper (ed.), Plato, Complete Works. D.S. Hutchinson, Indianapolis: Hackett, 1997.
  • Rae, Douglas. Equalities. Cambridge Massachusetts: Harvard University Press, 1981.
  • Rawls, John. A Theory of Justice. Cambridge: The Belknap Press of Harvard University Press, 1971.
  • Ridley, Matt. The Origins of Virtue: Human Instincts and the Evolution of Cooperation. New York: Penguin Books, 1998.
  • Rodrick, Dani. Institutions for High-Quality Growth: What They Are and How to Acquire Them. NBER Working Paper 7540, 2000. []
  • Rousseau, Jean-Jacques. The Basic Political Writings. Indianapolis: Hackett, 1987.
  • Sala-i-Martin, Xavier. “I Just Ran Two Million Regressions.” American Economic Review 87 (No. 2 1997): 178-83. []
  • Sartori, Giovanni. The Theory of Democracy Revisited. Chatham, New Jersey: Chatham House, 1987.
  • Smith, Adam (First Published 1759). The Theory of Moral Sentiments. Indianapolis: Liberty Classics, 1982. []
  • Smith, Adam. (1776) An Inquiry into the Nature and Causes of the Wealth of Nations. Repr. New York: Random House, 1937. []
  • Stanford Encyclopedia of Philosophy. Link, .
  • Stigler, George. “Smith's Travels on the Ship of State.” In Andrew Skinner and Thomas Wilson (eds.), Essays on Adam Smith. Oxford: Clarendon Press, 1975.
  • Tocqueville, Alexis de (1835, 1840). Democracy in America. 2 Vols., New York: Shocken Books, 1961.
  • Whitehead, A. North. Process and Reality. New York: Macmillan, 1929.