The transition in the political economy of South Korean development

This article analyzes the current transition in the political economy of South Korea in the context of political democratization and economic development. Because South Korea can be regarded as a case in which successful economic growth preceded political democratization, the article reviews the advantage and the disadvantage of late industrialization and its limitations. It discusses rising conflicts of interest among economic agents, labor disputes, and the erosion of international competitiveness. The article also reviews the sociopolitical reform program advanced by the new administration and its ramifications for the economic prospects. The article concludes that the Korean economy will continue to grow but not as fast as it had grown in the past and that the new political environment will play a critical role in determining the characteristics of capitalism in South Korea. The success of future economic development will depend on the stability of the political system and the national capacity to resolve conflict of interests.