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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 31, No. 2, pp.195-236
ISSN: 1225-0279 (Print)
Print publication date 30 May 2018
Received 14 Jan 2018 Revised 13 Mar 2018 Accepted 09 Apr 2018

Understanding Korea’s Saemaul Undong: Theory, Evidence, and Implication

Sung-Hee Jwa
Sung-Hee Jwa, Chairman, President Park Chung Hee Memorial Foundation, 386 World cup-ro, Mapo-gu, Seoul 03906, South Korea jwa4746@naver.com

JEL Classification: B5, D, O, Q1, R1

Abstract

This study attempts to derive a theory of Saemaul Undong (SMU) by identifying its key success factors and to discover its policy implications for economic development. The proposed theory argues that the success of the SMU was fundamentally driven by the government’s strong adherence to the economic discrimination (ED) principle of “rewarding high performance and penalizing low performance,” which is the basic function of the market. ED is the grand principle behind the success of the SMU. This study draws upon detailed historical and personal accounts about how the SMU was implemented by former President Park Chung Hee to show how faithful the SMU was to the ED principle. In addition, the study provides a new empirical model to estimate the effect of the SMU on economic growth and shows that the SMU had been a significant contributor to Korea’s high growth performance during the 1970s. One of the main policy implications of the SMU is that development and social policies should comply with the ED principle by preventing any political influence from working against the ED principle for the success and sustainability of those policies. Finally, the study argues that the SMU model provides an alternative or complementary perspective to the existing community development models.

Keywords:

Saemaul Undong (SMU), Self-help spirit, Economic discrimination, Economic egalitarianism, Economization of politics, Theory of the SMU success, Marketization of economy, Park Chung Hee

Acknowledgments

The main idea of this paper is originally from Jwa (2006) (in Korean), and a resource paper based on that idea, “Korea’s New Village Movement: Success Factors and Implications on Development Economics” (K-Developedia, Seoul: KDI School of Public Policy and Management, 2015) is a precursor to this paper as well as the section on “Success Factors of Saemaul Undong” in Chapter 8 of Jwa (2017b). However, this paper now covers much broader topics than all those early related works. The author has benefited from his affiliations with Korea Development Institute (KDI), Korea Economic Research Institute (KERI), and the Kyeonggi Research Institute, as well as from teaching Korean economic development at Seoul National University, KDI school of Public Policy and Management, and the Park Chung Hee School of Policy and Saemaul of Yungnam University. The author appreciates two anonymous referees for their useful comments. The author further appreciates Professor Yong Yoon at Chulalongkorn University for his longstanding research collaboration and Dr. Tae-Joon Han, senior fellow at the President Park Chung Hee Memorial Foundation for useful comments as well as assistance in English editing. The author also thanks Dr. Taekyu Lee, an economist at the Korea Economic Research Institute and Dr. Byung-Ook Lee, a research professor at Seoul National University for their assistances in empirical work.

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