Your browser does not support the PubReader view.
Go to this page to see a list of supporting browsers.
Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 12, No. 2, pp.105-125
ISSN: 1225-0279 (Print)
Print publication date 31 May 1999
Received Oct 1998 Revised Mar 1999

Preparing Korea for Global Competition in the 21st Century: An Agenda for Institutional Reform

Chung Hoon Lee
Professor of Economics, University of Hawaill at Manoa and Senior Fellow at the East-West Center, Honolulu, Hawaii 1chung@hawaii.edu

JEL Classification: O1, O5

Abstract

The paper offers some thoughts on the institutional reforms that Korea will have to undertake to achieve sustained economic growth in the 21st century. It begins with the discussion of a key institution that contributed to Korea’s rapid economic growth in the 1960s and 1970s and then argues that the demise of that institution in the later years has brought about an institutional hiatus with serious consequences to the economy. The paper then concludes that the globalizing world of the 21st century will require Korea to change many of its age-old informal institutions as they are incompatible with the formal institutions necessary for Korea to be competitive in the new world economy.

Acknowledgments

The author wishes to thank Ha-Joon Chang, Keun Lee, Ambassador Richard “Dixie” Walker, and an anonymous referee for their comments on an earlier version of the paper.

References

  • Aage, Hans. “Sustainable Transition.” In R. W. Campbell (ed.), The Postcommunist Economic Transformation: Essays in Honor of Gregory Grossman. Boulder: Westview Press, 1994.
  • Bates, Robert H. Beyond the Miracle of the Market: The Political Economy of Agrarian Development in Kenya. Cambridge: Cambridge University Press, 1989.
  • Booz, Allen and Hamilton. Vision Korea: Revitalizing the Korean Economy toward the 21st Century. Seoul, Korea, October 1997 (in Korean).
  • Bruno, Michael. “Stabilization and Reform in Eastern Europe.” IMF Staff Papers 39 (No. 4 1992): 741-77. [https://doi.org/10.2307/3867420]
  • Brzeski, Andrzej. “Postcommunist Transformation: Between Accident and Design.” In R. W. Campbell (ed.), The Postcommunist Economic Transformation: Essays in Honor of Gregory Grossman. Boulder: Westview Press, 1994.
  • Cargill, Thomas F. “Korea's Transition to an Efficient and Stable Financial Structure.” Presented at the Conference on Korea's Transition to a High-Productivity Economy, Honolulu, Hawaii: University of Hawaii at Manoa, Center for Korean Studies, February 6-7, 1998.
  • Chang, Ha-Joon. “The Political Economy of Industrial Policy in Korea.” Cambridge Journal of Economics 17 (No. 2 1993): 131-57. [https://doi.org/10.1093/oxfordjournals.cje.a035227]
  • Chang, Ha-Joon. “An Alternative View on Regulatory Reform in Korea.” Presented at the Conference on Korea's Transition to a High-Productivity Economy, Honolulu, Hawaii: University of Hawaii at Manoa, Center for Korean Studies, February 6-7, 1998.
  • Cho, Lee-Jay. “Culture, Institutions, and Development.” In Lee-Jay Cho and Yoon Hyung Kim (eds.), Korea's Political Economy: An Institutional Perspective, Boulder: Westview Press, 1994.
  • Cho, Lee-Jay. and Kim, Yoon Hyung (eds.). Economic Development in the Republic of Korea: A Policy Perspective. Honolulu, Hawaii: East-West Center, 1991.
  • Cho, Lee-Jay, and Lee, Chung H. “The Government-Business Relationship in Korea: Cultural Dimensions.” In Tzong-shien Yu and Joseph S. Lee (eds.), Confucianism and Economic Development. Taipei, Taiwan: Chung-Hua Institution for Economic Research, 1995.
  • Choi, Dong Kyu. “Evolution of Administrative Organization to Promote Economic Development in Korea.” East Asia Economic Policy Studies 2 (September 1988), Honolulu, Hawaii: East-West Center.
  • Ellman, Michael. “Transformation, Depression, and Economics: Some Lessons.” Journal of Comparative Economics 19 (No. 1 1994): 1-21. [https://doi.org/10.1006/jcec.1994.1060]
  • Feeny, David. “The Demand for and Supply of Institutional Arrangements.” In V. Ostrom, D. Feeny, and H. Picht (eds.), Rethinking Institutional Analysis and Development: Issues, Alternatives, and Choices. San Francisco: International Center for Economic Growth, 1988.
  • Fields, Gary S., and Wan, Jr., Henry, “Wage-Setting Institutions and Economic Growth.” World Development 17 (No. 9 1989). [https://doi.org/10.1016/0305-750X(89)90087-9]
  • Greif, Avner. “Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies.” Journal of Political Economy 102 (No. 5 1994): 912-50. [https://doi.org/10.1086/261959]
  • Kim, Kwang Suk. “Industrial Policy and Trade Regimes.” In Lee-Jay Cho and Yoon Hyung Kim (eds.), Economic Development in the Republic of Korea: A Policy Perspective. Honolulu, Hawaii: East-West Center, 1991.
  • Kirkpatrick, Grant. “Transition Experiences Compared: Lessons from Central and Eastern Europe's Reform.” In Chung H. Lee, and Helmut Reisen (eds.), From Reform to Growth: China and Other Countries in Transition in Asia and Central and Eastern Europe. Paris: OECD Development Centre, 1994.
  • Kozul-Wright, Richard, and Rayment, Paul. “Walking on Two Legs: Strengthening Democracy and Productive Entrepreneurship in the Transition Economies.” United Nations Conference on Trade and Development Discussion Paper 101, August 1995.
  • Kwack, Taewon. “Industrial Restructuring Experience and Policies in Korea in the 1970s.” Presented at a workshop on Industrial Restructuring Experience and Policies in the Asian NICs, Honolulu, Hawaii: The East-West Center, August 1984.
  • Lee, Chung H. “The Government, Financial System, and Large Private Enterprises in the Economic Development of South Korea.” World Development (February 1992). [https://doi.org/10.1016/0305-750X(92)90098-G]
  • Lee, Chung H. and Lee, Keun. “The Weakening of the State and Agenda for Economic Reform: The Case of South Korea.” In Conference on Global Interdependence and Asia-Pacific Cooperation. Taipei, Taiwan: Chung-Hua Institution for Economic Research, December 1992.
  • Lee, Chung H., and Reisen, Helmut (eds.). From Reform to Growth: China and Other Countries in Transition in Asia and Central and Eastern Europe. Paris: OECD Development Centre, 1994.
  • Lee, Keun. The Evolution of the Korean Economy: From a Pre-Modern to a Reunified Economy. A Seoul National University Monograph, June 1998.
  • Lin, Justin Yifu, and Nugent, Jeffrey B. “Institutions and Economic Development.” In J. Behrman and T. N. Srinivasan (eds.), Handbook of Development Economics, Volume III, Elsevier Science B.V., 1995. [https://doi.org/10.1016/S1573-4471(05)80010-5]
  • Murrell, Peter. “The Transition According to Cambridge, Mass.” Journal of Economic Literature 33 (No. 1 1995): 164-78.
  • Nabli, Mustapha K., and Nugent, Jeffrey B. The New Institutional Economics and Development. Amsterdam: North-Holland, 1989. [https://doi.org/10.1016/B978-0-444-87487-0.50028-1]
  • Naughton, Barry. “Reforming a Planned Economy: Is China Unique?” In Chung H. Lee, and Helmut Reisen (eds.), From Reform to Growth: China and Other Countries in Transition in Asia and Central and Eastern Europe. Paris: OECD Development Centre, 1994.
  • Nee, Victor, “Norms and Networks in Economic and Organizational Performance.” American Economic Review 88 (No. 2 1998): 85-9.
  • North, Douglass C. Structure and Change in Economic History. New York: W. W. Norton, 1981.
  • North, Douglass C. Institutions, Institutional Change and Economic Performance. Cambridge University Press, 1990. [https://doi.org/10.1017/CBO9780511808678]
  • North, Douglass C. “Institutions.” Journal of Economic Perspectives 5 (No. 1 1991): 97-112. [https://doi.org/10.1257/jep.5.1.97]
  • Olson, Jr., Mancur. “Distinguished Lecture on Economics in Government: Big Bills Left on the Sidewall: Why Some Nations are Rich, and Others Poor.” Journal of Economic Perspectives 10 (No. 2 1996): 3-24. [https://doi.org/10.1257/jep.10.2.3]
  • Platteau, Jean-Philippe. “Behind the Market Stage Where Real Societies Exist―Part I: The Role of Public and Private Order Institutions.” Journal of Developing Studies 30 (No. 3 1994): 533-77. [https://doi.org/10.1080/00220389408422328]
  • Platteau, Jean-Philippe. “Behind the Market Stage Where Real Societies Exist―Part II: The Role of Moral Norms.” Journal of Developing Studies 30 (No. 3 1994): 753-817. [https://doi.org/10.1080/00220389408422338]
  • Rana, Pradumna B., and Paz, Wilhelmina. “Economies in Transition: The Asian Experience.” In Chung H. Lee, and Helmut Reisen (eds.), From Reform to Growth: China and Other Countries in Transition in Asia and Central and Eastern Europe. Paris: OECD Development Centre, 1994.
  • Ranis, Gustav. “The Role of Institutions in Transition Growth: The East Asian Newly Industrializing Countries.” World Development 17 (No. 9 1989): 1443-53. [https://doi.org/10.1016/0305-750X(89)90085-5]
  • Rodrik, Dani. “Understanding Economic Policy Reform.” Journal of Economic Literature 34 (No. 1 1996): 9-41.
  • Schmielding, Holger. Lending Stability to Europe’s Emerging Market Economies. Tubingen, Germany: J.C.B. Mohr, 1992.
  • Stern, Joseph J., Kim, Ji-hong, Perkins, Dwight H., and Yoo, Jung-ho. Industrialization and the State: The Korean Heavy and Chemical Industry Drive. Cambridge, Mass.: Harvard Institute for International Development, 1995.
  • Taylor, Lance. “The Market Met Its Match: Lessons for the Future from the Transition’s Initial Years.” Journal of Comparative Economics 19 (No. 1 1994): 64-87. [https://doi.org/10.1006/jcec.1994.1063]
  • Williamson, Oliver E. The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting. New York: Free Press, 1985.
  • Winiecki, Jan. “Shaping the Institutional Infrastructure.” In H. Siebert (ed.), The Transformation of Socialist Economies. Tubingen, Germany: J.C.B. Mohr, 1992.
  • Woo, Cheonsik, and Lee, Ju-Ho. “Education in Korea: Attainments and Challenges.” Presented at the Conference on Korea's Transition to a High-Productivity Economy, Honolulu, Hawaii: University of Hawaii at Manoa, Center for Korean Studies, February 6-7, 1998.