Did the 1997 Financial Crisis Transform the S. Korean Developmental State? Focused on the Public Fund

Abstract

Many scholars have explained South Korea’s economic development in terms of “developmental state.” They point out that the success of the South Korean government intervention was mainly due to “the control of the state over the industrial capital through financial resources” and “the existence of the independent bureaucracy able to discipline the capital”¹ (Johnson, 1982; Amsden, 1989; Wade, 1990; Kim E. M., 1997; Chibber, 1999). Based on a high-level state autonomy and capacity, the South Korean developmental state was able to discipline the industrial capital to comply with the state’s policies and successfully intervene in the economic market with its own characteristic resource allocation and competition mechanisms (Amsden and Euh Y. D., 1993; Chang H. J., 1998; Cherry, 2005; Lim W. H., 2003; chapters 5 and 6). They argue that the formation of a triple alliance among “the state, the financial capital, and the industrial capital” guaranteed the state’s effective dominance over the domestic capital (Kim E. M., 1997; Woo-Cumings, 1999; Hahm J. H., 2003).