Better by design: Korea's neoliberal economy

Abstract

This paper examines the processes of bank and corporate restructuring in South Korea since the 1997–98 economic crisis, and seeks to highlight how the state has intervened in a highly dirigiste manner in order to expedite restructuring in both the commercial bank and corporate sectors. At the same time it demonstrates the clear neoliberal principles that have underpinned the state's attempts to promote restructuring. The state has shown a clear determination to take action against insolvent firms and financial institutions no matter how large or strategically important they may be, to impose hard budget constraints on key economic actors. Furthermore, the state has actively sought to engineer the sale of key domestic firms and banks to foreign investors. We argue that Korea's efforts to create a functioning neoliberal economy have been largely successful and are functional from the perspective of Korean capitalism, if not the perspective of individual Korean firms. Changes in the global economy in the two decades preceding the 1997–98 crisis imposed an increasingly inescapable pressure on the Korean state to effect a neoliberal transformation and Korea's future as a centre of capitalist accumulation has for some time been bound up with the success of the neoliberal project. In conclusion, this paper seeks to draw out the broader implications of this reading of the post-crisis restructuring programme for debates on global economic liberalization and the future of capitalist diversity.     

Globalization,International Organizations,and Telecommunications

Since the 1990s over 158 countries established pro‐market reforms in telecommunications—a fast pace for such a drastic change. For example, Sweden and Botswana, two nations vastly different across multiple dimensions, both liberalized their telecom sectors. Why did so many countries adopt liberal reforms in such a short period of time? Conventional wisdom highlights the role of global markets and technology, powerful states, global diffusion, and domestic politics. I argue that contrary to these claims, diffusion through key international organizations is the critical and overlooked factor in explaining rapid global convergence of pro‐market telecom reforms. Using an original dataset for 189 countries between 1970 and 2003 and event history analysis, I demonstrate that membership in key liberal trading organizations, especially the WTO and the OECD, increases the likelihood that countries will adopt liberal pro‐market reforms in telecommunications. These results speak directly to current public policy debates about the reregulation of global markets and bridges the literatures of policy diffusion, institutional design, and regulatory regimes.     

Policy Agendas for South Korea's Broadband Convergence Network Infrastructure Project

Broadband holds a critical position in the progress of economic and social indicators by connecting consumers, businesses, and governments. South Korea has consistently been the global leader in broadband deployment since 1999. In the last 10 years, the Korean government has pursued several strategies for its broadband policy. The purpose of this article was to explore South Korea's implementation of its Broadband Convergence Network (BcN) project with special emphasis on its objectives of achieving media convergence, ubiquitous connectivity, and coordination among network stakeholders. The study uses the theoretical framework of institutionalism to identify factors that help explain how the policy agenda for the BcN was implemented. The BcN is Korea's most recent high‐speed Internet infrastructure project and is envisioned as a conduit through which broadband services, applications, and content will flow to reflect a robust high‐speed Internet infrastructure. This broadband infrastructure project began in 2004 as a consortium that includes the government and private sector firms. This infrastructure was launched as a three‐phase project. The first phase of the BcN extended from 2004 through 2005, the second phase extended from 2006 through 2007, and the third phase extended from 2008 through 2010.     

Eclipse or reconfigured? South Korea's developmental state and challenges of the global knowledge economy

Abstract

Globalists and former students of the Asian developmental state maintain that the latter has succumbed to the forces of globalization. They believe that the global knowledge economy involves the thorough integration of the global economy, continuous innovation and networks rather than hierarchies and that these factors are foreign to the operational logic of the developmental state and thus render it obsolete. This article contends that the global economy is not as open as supposed, and that the challenges posed by the knowledge economy, while genuine, tend to be uneven. Focusing on Korea's information technology sector and relying on documentary and interview data, the present article suggests that, while the Korean state no longer relies on its erstwhile finance and regulation strategies, it has continued to articulate development visions and sought to achieve them through deploying public resources to structure the market. Rather than going into eclipse, the Korean developmental state has been reconfigured.     

Meso‐discourses,state forms and the gendering of liberal‐democratic citizenship

This article builds upon Michel Foucault's fleeting observation that ‘the state consists in the codification of a whole number of power relations’ and that ‘a revolution is a different type of codification of these same relations’ (Held et al., 1983, pp. 312–3). Specifically, the article uses the case of Canada to argue that distinct state forms rest on particular meso‐discourses which inform a logic of governance, historical configurations of the public and private and gendered citizenships. The meso‐discourses of separate spheres, liberal progressivism and performativity (the logics of governance for the laissez‐faire state, the Keynesian welfare state and the neo‐liberal state, respectively) have coded and recoded gendered citizenships, thereby providing women and men with differential access to the public sphere and to citizenship claims. The neo‐liberal state's meso‐discourse of performativity is especially challenging for women and all equity‐seeking groups because it prescribes the ascendency of market relations over political negotiation or ethical considerations, as well as the attrition of social and political citizenship rights. Social citizenship is being eclipsed by market citizenship.     

State Capitalism,Chinese‐Style: Strategic Value of Sectors,Sectoral Characteristics,and Globalization

Scholarship on the institutional foundations of Chinese‐style capitalism emphasizes the impact of liberal reformers and China's participation in international organizations, devolution of economic decision making and local experimentation, and the proliferation of market actors to explain their origins. This article investigates distinct patterns of sectoral variation in market governance in China today, examining the extent and scope in which dominant forms of market coordination and distribution of property rights reflect variation in national goals of economic power, security, and growth; structural sectoral attributes; and the path‐dependent effects of institutional arrangements. The reinforcement of state coordination and the dominance of state ownership and shareholding in strategic industries, such as telecommunications, and the relinquishment of state control and the dominance of market stakeholders in nonstrategic sectors, such as textiles, characterize the rise of bifurcated capitalism in the period before and after China's accession to the World Trade Organization.     

Crafting and dismantling the egalitarian social contract: the changing state-society relations in globalizing Korea

Abstract

Between the late 1960s and the early 1980s, the Korean developmental state implemented a series of drastic egalitarian educational policies that were primarily geared toward social integration. While promoting social mobility and educational expansion, they provided the basis of the egalitarian social contract in Korea's educational policymaking for decades. Since the 1990s, however, the Korean state has implemented neoliberal education reforms that led to the rapid dismantling of the egalitarian framework for the country's educational policymaking. These neoliberal reforms were strongly supported by the affluent middle class that prefer elitist education and can afford expensive private education. The general direction of change in Korea's educational policymaking suggests both significant change and continuity in the character of the Korean state and its relations to society since the 1990s. The contemporary Korean state still maintains a highly strategic and activist orientation in adopting and implementing policies although its policies are increasingly neoliberal in content. In doing so, the Korean state is gradually abandoning its broad social base and mobilizational capacity, while increasingly connecting with the upper segments of the middle class.     

Power transitions and global trade governance: The impact of a rising China on the export credit regime

The existing liberal international economic order was constructed during the era of American hegemony and has been heavily shaped by US power. How is the rise of China affecting global economic governance? This article analyzes the case of export credit, which has long been considered a highly effective international regulatory regime and an important component of global trade governance. I show that the rise of China is profoundly altering the landscape of export credit and undermining its governance arrangements. State-backed export credit is a key tool of China's development strategy, yet I argue that an explosion in China's use of export credit is eroding the efficacy of existing international rules intended to prevent a competitive spiral of state subsidization via export credit. The case of export credit highlights a fundamental tension between liberal institutions of global governance and the development objectives of emerging powers.     

Medieval Security in the Modern State

Abstract. The size of the private security industry has increased substantially in recent decades. While previous research has focused on the industry's growth trajectory, less emphasis has been placed on explaining the nature and diversity of private security services. This article investigates the possibility of studying private security with the feudal model. Feudalism is introduced as an ideal type and the paper explains why it is necessary for understanding the independent control of violent force—termed here as ‘private coercion’—in contemporary society. The feudal model provides a unique historical lens through which to re-examine previous studies on this subject. In many ways, private coercion is incongruent with the traditional vision of liberal, capitalist society. The feudal model reveals these inconsistencies as it identifies private coercion as a means of creating wealth that violates the state's monopoly on violence, challenges the public sphere of governance and redefines the boundaries between public and private space. This article suggests that any explanation of modern modes of securing life and property is incomplete without the feudal model.     

Global citizenship as a national project: the evolution of segye shimin in South Korean public discourse

The idea of global citizenship in contemporary South Korean public discourse has revolved mainly around a national endeavor to boost the county's stature and competitiveness amid economic globalization. Based on a review of two decades of published media references to segye shimin (‘global citizen’ in the Korean language), this article shows that the specific usages of segye shimin – mainly by elites from government, academia, and journalism – underscore how the ‘developmental citizenship’ that marked South Korea's past authoritarian military regimes has carried on since the transition to civilian-led democracy. In contrast with the burgeoning academic discourse on cosmopolitanism that focuses heavily on moral responsibilities to humanity and the planet, South Korea's discourse of global citizenship has been closely aligned with neoliberalism and filled with exhortations to the domestic population to overcome numerous perceived liabilities seen as impeding the country's advancement. While global citizenship discourse in South Korea has emphasized top-down national strategic imperatives, a bottom-up approach to cosmopolitanism is also emerging as the country gains confidence and the notion of segye shimin gradually gains traction across the wider society.     

Disaggregating public-private governance interactions: European Union interventions in transnational private sustainability governance

Transnational private sustainability governance, such as eco-certification, does not operate in a regulatory or jurisdictional vacuum. A public authority may intervene in private governance for various reasons, including to improve private governance's efficient functioning or to assert public regulatory primacy. This article argues that to properly understand the nature of public-private governance interactions—whether more competitive or complementary—we need to disaggregate a public authority's intervention. The article distinguishes between four features of private governance in which a public authority can intervene: standard setting, procedural aspects, supply chain signaling, and compliance incentives. Using the cases of the European Union's policies on organic agriculture and biofuels production, the article shows that public-private governance interaction dynamics vary across these private governance features as well as over time. Furthermore, the analysis highlights the importance of active lobbying by private governance actors in influencing these dynamics and the resulting policy outputs.     

Corporations at a crossroads: How multilevel governance interactions shape participation and effort in private governance regimes

This article argues that the interactions between firm agency in corporate management and the multilevel governance structures in which firms operate condition firms' participation and effort in private governance regimes. Empirically, I examine the Fortune Global 500 firms' decisions about participation and the extent of participation in the Carbon Disclosure Project during 2011–2015. Given firms' strategic considerations, the efficacy of corporate management structures and practices is conditioned by domestic regulatory and global regime contexts, and this efficacy varies across developed and developing countries. In developed countries, corporate, domestic, and global governance positively reinforce each other as drivers of private regulation on climate change. These governance levels are complements not substitutes. By contrast, the main drivers of participation and effort in developing countries are corporate management structures and practices, the stringency of domestic regulatory institutions, and their interactions. This article's results are robust to alternative specifications, including an alternative modeling approach.     

Korean foreign direct investment in Europe: The determining forces

Korea's more complete integration into the world economy has been stunted by past government policies aimed at preserving comprehensive control over the domestic economy. This situation has recently changed owing to prevailing structural weaknesses in the Korean economy and the dictates of the global competitive environment. Consequently, the level of Korean overseas investment has escalated, particularly in Europe — the Triad region which has traditionally attracted limited inward FDI from Korea's large chaebol companies. This paper examines the determining forces that lie behind this trend. It is recognized that early Korean investments in the EU were principally driven by reactionary motives when confronted by actual or anticipated policy threats. While it is argued that the pretext for such investment has not significantly diminished, the imperatives of globalization together with emerging economic conditions in both east and west Europe have provided considerable incentives for more proactive FDI strategies to be adopted. The recent announcements by senior chaebol of intended large‐scale investments in Europe suggest that this new pattern is becoming increasingly apparent.     

Policy actions for developing the infrastructure sector: Learnings from the Indian experience

The infrastructure sector is one of the major pillars for economic growth and development of a country. The responsibility to develop this crucial sector is shifting away from the public to the private sector. After the economic liberalization in 1991, India opened the infrastructure sector, among many others, to private domestic and foreign investment. The shortage of electricity, the poor state of roads, and limited telecom access necessitated a stream of persistent reforms, which were expected to play a significant role in the infrastructure sector's growth. Although some subsectors witnessed success, others continued to face hurdles. The paper highlights the role of infrastructure in socio-economic development through global literature. It also presents a story of infrastructure development in India since the inception of economic liberalization. It highlights various challenges that discourage private sector investments, thus providing a rationale for policy initiatives by the government. The paper also presents critical issues highlighted by multiple government committees over nearly three decades and identifies residual issues that merit attention. The outcomes of the paper are relevant in the context of developing and emerging economies.     

The political economy of education and skills in South Korea: democratisation,liberalisation and education reform in comparative perspective

The success story of Korean economic development is intimately linked with the so-called developmental state; and education policy, as part of centrally orchestrated industrial policy, played a critical role in the country's rapid industrialisation, which allowed for high employment rates, relatively modest social inequality and remarkable social mobility. However, the Korean success story has started to show ‘cracks’ – with labour market dualisation, rising inequality and ‘over-education’. While acknowledging the importance of the East Asian financial crisis as external shock for the Korean political economy, we suggest more fundamental problems in the socio-economic and socio-political underpinnings of the developmental state and its education and skills formation system for understanding how Korea's economic and education miracle turned into ‘education inflation’, skills mismatch and social polarisation.     

The limits of economic globalization in East Asian developmental states

Abstract

In an attempt to adjust to economic globalization or internationalization, East Asian developmental states have liberalized their domestic economic systems, accelerating the introduction of the free‐market ideology. Despite their plan to establish the internationally compatible open‐market economy, however, the extent to which they can advance economic liberalization is limited. Political and economic burdens that the developmental state's extensive intervention in the market has incurred in the course of state‐led mercantile economic development, make it impossible for those states to execute full‐scale economic liberalization. The South Korean case clearly shows this. The Korean developmental state retains two major economic burdens: the exclusive ownership and the poor financial structure of the chaebôl. Insofar as Korean big business preserves those weak spots, the government cannot surrender the power of regulation despite its spontaneous implementation of the economic liberalization policy. In addition, the common ‘egoistic’ interests which government bureaucrats and the political class share also limit the degree to which economic liberalization policy can be implemented. The degree of state intervention in the market in Korea has been deeper than that in Japan which pioneered Asian developmental statism, and, thus, the political and economic burdens it has incurred for itself are heavier. Consequently, the East Asian developmental state cannot entirely withdraw its intervention in the market. The ‘support’ of industries is likely to diminish, but ‘regulation’ for the formation of the autonomous market will increase. For the Korean developmental state, globalization and economic liberalization are political economic slogans to re‐launch economic growth and to elevate the international economic competitiveness of industries under the initiative of the state, and motivated by nationalistic reasons. Hence, the role of the state in the market is still far from becoming redundant even in the tide of globalization and economic liberalization in the case of South Korea, where the legacy of strong developmental statism remains considerable.     

Out of tune or well tempered? How competition agencies direct the orchestrating state

This article analyzes the impact competition agencies have on the orchestrating role of states in domestic private regulation. I argue that these agencies can significantly affect interactions in the governance triangle through the way they apply a “logic of the market” to evaluate agreements between firms. The regulatory framework of European Union competition law has increasingly constrained the ability of firms to take into account broader interests when making agreements to foster social objectives. This logic of the market clashes with the ever‐increasing emphasis governments place on enabling firms to enter into such agreements. I analyze this tension through a case study of a pact of Dutch retailers to collectively introduce higher animal welfare standards for poultry. Using regulatory network analysis I trace the governance interactions between the governance triangle on the one hand (government, non‐governmental organizations, and firms), and the Dutch competition authority, Autoriteit Consument en Markt (ACM) and the European Commission on the other hand. Attempts by the Dutch government to instruct the ACM to be more lenient toward private regulation were blocked twice by the European Commission. As a result, the Dutch government abandoned private regulation as the preferred mode and proposed a bottom‐up process that would generate public regulation as a way to avoid conflict with competition policy. I argue that paradoxically enough the intervention of these non‐majoritarian competition agencies against the “will” of the governance triangle has potentially increased the effectiveness and legitimacy of orchestration processes.     

Contested meanings of environmentalism and national security in green Korea

Abstract

This paper focuses on the relationship between national security and environmentalism in South Korea. The 2009 South Korean Presidential Committee on Green Growth set a long-term vision for South Korea to ‘go green’. This is promoted as a new state-led development paradigm and a response to new global security risks. The paper identifies official and unofficial contested narratives on development, environmentalism and national security. By focusing on civil society movements, the paper identifies challenges to the exclusionary realist and liberal institutional approaches to South Korea's Green Growth initiative. These alternative discourses of national security are unpacking and reconstructing the relationship between development and environmentalism through the question of who defines ‘national security’ and for whose interests.     

How the World Trade Organization shapes regulatory governance

The World Trade Organization (WTO) arguably shapes regulatory governance in more countries to a greater extent than any other international organization. This article provides a new framework for assessing the broader transnational regulatory implications of the WTO as part of a transnational legal order (TLO) in terms of four dimensions of regulatory change that permeate the state: (i) changes in the boundary between the market and the state (involving concomitantly market liberalization and growth of the administrative state); (ii) changes in the relative authority of institutions within the state (promoting bureaucratized and judicialized governance); (iii) changes in professional expertise engaging with state regulation (such as the role of lawyers); and (iv) changes in normative frames and accountability mechanisms for national regulation (which are trade liberal and transnational in scope). In practice, these four dimensions of change interact and build on each other. The article presents what we know to date and a framework for conducting further study of such transnational legal ordering.     

Globalization and the erosion of democracy

Abstract Despite the apparent development and spread of liberal democratic state forms in the 1980s and 1990s, possibilities for genuine democratic governance overall are declining. Firstly, the emergence and consolidation of modern liberal democracy was inextricably intertwined with the development of the nation–state and is profoundly socially embedded in that structural context. Secondly, in today's globalizing world, cross–cutting and overlapping governance structures and processes increasingly take private, oligarchic (and mixed public/private) forms; hegemonic neoliberal norms are delegitimizing state–based governance in general; and democratic states are losing the policy capacity necessary for transforming democratically generated inputs into authoritative outputs. Consequently, robust constraints limit the potential for (a) reinstitutionalizing the 'democratic chain' between accountability and effectiveness, (b) rearticulating the multitasking character of authoritative institutions and (c) renewing the capacity of authoritative agents to make the side–payments and to undertake the monitoring necessary to control free–riding and assimilate alienated groups. Rather than a new pluralistic global civil society, globalization is more likely to lead to a growth in inequalities, a fragmentation of effective governance structures and the multiplication of quasi–fiefdoms reminiscent of the Middle Ages.