“How do we explain the sustained success story of South Korea's development towards becoming a rich industrialized and democratic country?” This is the leading question addressed in Korean Political and Economic Development and its main aim. The second aim of the book is to put this analytical framework to the test. Designed as the first of the multivolume study “Rising to the Challenges of Democratization and Globalization in Korea, 1987–2007,” the book applies theoretical conceptions of the political economic approach put forward by North, Wallis, and Weingast to the case of South Korea.Footnote 17 The authors, Jongryn Mo and Barry R. Weingast, set out to overcome the perspective of partial explanations by such theories as modernization theory; development theory; democratization theory; and theories of meritocratic bureaucracy, colonial experience, economic policy making, et cetera, and provide an integrated account of South Korea's political and economic development from the establishment of the republic in 1948 to the end of Roh Moo-hyun's administration in 2008.
Mo, a professor at Yonsei University's Graduate School of International Studies, has published important works in the field of international political economy, sometimes collaborating with Stephan M. Haggard of UC San Diego, who is well known for his various studies on the East Asian financial crisis. Weingast is the Ward C. Krebs Professor of Political Science in the Department of Political Science at Stanford University. He is well known for his contributions on such topics as the political economy of development, democracy, legal institutions, and the rule of law. His collaborative works with Douglass C. North, Nobel Economic Science Prize Laureate, have obviously provided the theoretical point of departure for the book reviewed here.
Korean Political and Economic Development starts out with an introductory chapter (chap. 1) in which the authors set forth the overall idea and concept of the case study. This includes the main motivation of explaining South Korea's development and lack of integrated approaches. It is explained both as a first introduction to the approach of North, Wallis, and Weingast and as a sneak preview of its application to the case study.
In the ensuing chapter (chap. 2), the analytical framework with all its conceptions and central analytical terms is put forward in detail. The basic idea is that development can be conceptualized as transition from natural states to developed states through a seesaw mechanism of counterbalancing openness and limitedness of the political and economic system. Limited-access and open-access social orders depict the ways the polity, economy, and society of a country are organized. In countries with limited-access order, modes of exchange are mainly based on personal relationships facilitating privileges, monopolies, and corruption. Citizens are limited in forming formal organizations, such as civil society groups, political parties, or trade unions; opportunities for citizens to engage in economic activities, such as operating an enterprise on equal terms, are limited; privileges are reserved for a select few; and competition is restricted. Open-access orders are the opposite. Here access is basically open and exchange is based on impersonal relationships facilitating competition. The authors posit a dynamic interrelationship between the two realms of economy and politics that is the source of a progressing evolvement. It is grounded on the idea that progress in development depends on a double balancing interplay of political and economic openness, just as a kayak only moves forward if water mass is pushed left and right of the vessel in turns. This includes the contention that moving forward smoothly is only possible by well-balanced development.
In the six main chapters (chap. 3–8), Mo and Weingast apply this analytical framework to the Korean case around the three turning points in 1961, 1987, and 1997 that mark shifts between four different systems of political economy: predatory state, developmental state, economic populism, and plutocracy. The first transition occurred with the takeover by General Park Chung Hee in 1961 when Park opened access to the economic system with an export-led policy strategy, while suppressing political access that could have dampened economic growth and endangered the regime's support of the people in the face of the communist threat from North Korea. The developmental dictatorship saw very strong economic growth with the birth of the chaebol, enterprises too big to fail, that shared their gains to a certain extent with the people. This resulted in a growing middle class, working class, and civil society and led the oppositional party to become stronger and demanding. This disequilibrium of high economic openness and low political openness led to the second turning point, that is, to democratization in 1987, which can be explained as a manifestation of counterbalancing by opening access to the political system. However, once the political realm was liberalized, the government lost its control over big businesses. Competition in the political arena became fiercer, and the government and opposition parties became heavily dependent on financial support from the chaebol. This led to a reversal in the relationship between government and industry, tying the hands of politicians ever more to control big business and their thirst for greater profits and larger debts. This induced the financial crisis at the end of the 1990s. The opening of the political system led to the first democratic turnover: the election of President Kim Dae Jung in 1997. As president, he was able to manage the crisis mainly by deregulating and restructuring, that is, opening the economy for more competition.
The conclusion (chap. 9) is spread out across twelve pages, giving a brief summary of the contents and final reflections on whether and how the South Korean case posits a good role model for successful development of other countries. Here the authors emphasize the historical uniqueness of the Korean case, while leaving some room for possible adaptation strategies for developing countries.
In sum, the book indeed provides the reader with a unified lens through which a comprehensive understanding and reasonable explanation of South Korea's dynamic development becomes possible. The case study also reconfirms the expected pattern of double balancing as predicted by the analytical framework. In this way, the book is highly recommended to scholars in the field of political economy, for it provides an illustrative and convincing application of a theoretically informed approach that is part of a long-term and comprehensive theoretical research project executed by some of the most renowned scholars in the field. At the same time, the book will be of great interest to scholars dealing with the issue of how to explain successful and less successful development, since it gives new insights that so far have not been provided by the existing literature. Also, graduate students in various fields will benefit from reading this piece of research, since for students of political economy it can teach the workings of its theory by following a very practical application. For students of South Korea or the region, it can serve as a distinct and comprehensive overview of major developments in the country. The book's systematical organization makes it easier to connect the research it contains to acquired knowledge and future learning about the country, and, above all, makes it more accessible for comparative studies.
