Despite unfavorable initial conditions, the Republic of Korea's real GNP has tripled in every decade since 1962. The economy has undergone a rapid structural transformation and is now dominated by a dynamic and flexible manufacturing sector. The benefits of growth have been distributed widely. There has been a sharp reduction in the incidence of absolute poverty and significant improvements across a broad range of social indicators. This was only possible in an environment in which the state saw economic development as its primary responsibility. Economic policy has been characterized by a strong outward orientation, as reflected in the rapid and sustained growth of manufactured exports. Export promotion was the prime motivator of an activist industrial policy and international prices were used to assess the success of sectoral interventions. Macroeconomic policy has been pragmatic and flexible, although there was a strong emphasis on growth and industrial development in the 1960s and 1970s, the government imposed a comprehensive stabilization program following the second oil shock. The report also discusses Korea's industrial policy and its evolution, as well as the role of institutions in its economic development.