This paper reviews the salient features of Korea's economic experience in the 1970s, the decade when the government pursued an industrial targeting policy with the utmost vigor. Whether or not the policy succeeded is of critical importance in evaluating the Korean government's capabilities and its role in the country's economic performance.
To state the conclusion of this paper first: The government's contribution to Korean economic growth, though considerable, was not made through the kind of intervention that is popularly perceived to be the case. In particular, the Korean government's intervention in allocating resources at the industry or firm level did not prove to be successful. As shall be argued in the following, the Korean economy performed well when there was no strong bias in the incentive system, and it performed poorly under an industrial policy that strongly favored certain industries and protected domestic producers. Given the practical importance and academic interest of the subject matter, a more thorough and rigorous analysis of the Korea experience is called for.
- The Government in Korean Economic Growth
- Yoo, Jungho유정호
- Korea Development Institute