The main purpose of this paper is to explore the possibilities of learning from Korea some pertinent lessons for industrialization and development in the 21st century. The 21st century presents an even greater challenge for industrialization in the developing world than the post-WWII period. The changed global economic and ecological environment will shape the emergence of new technological and industrial paradigms and trajectories in significant ways. However, the experience of Korea still presents many relevant lessons. The paper uses an extension of Sen's idea of capabilities within a framework of complex dynamic systems. In this view, development is really an extension over time and space of freedom, particularly the positive freedom to lead a certain type of life an individual has reasons to value through the creation of an interlinked network of institutions. I discuss a number of strategic features of Korean development experience ranging from strategic openness to learning, innovation and ultimately, enhancing the standard of living for all. From the Korean case, it is apparent that the desirable institutions provide a rough and ready type of security of property rights, enforceability of contracts and lead to a gradual and strategically conceived integration with the world economy. In addition, they also help maintain macroeconomic stability without a necessarily rigid conservative fiscal stance. Over time and given sufficient financial development, the state and private sector institutions should be able to manage risk-taking by financial intermediaries. In order to promote equitable growth there will also need to be institutions that can supply social insurance and safety nets, and create a democratic space for voice and accountability. But there is no one-size-that-fits-all for any of these functions. I also argue that in addition to the positive lessons from the Korean experience and the willingness of Korea to extend aid and expertise to developing economies of Asia and Africa in particular, Korea can also play a much broader and significant role in the present turbulent global political economy through creative regional and global cooperation.
Invited Paper for the 2011 United Nations Academic Impact Forum, Seoul, August 9-12, 2011