"Big Business, Strong State"

Paper Summary:

This paper explains that many scholars consider the "rags-to-riches" turn-around of the South Korean economy as a marvel especially when compared with other countries such as those in Latin America; thereby, various theories have been proposed to explain this success. The author points out that Eun Mee Kim in "Big Business, Strong State" argues that the rapid economic growth was not due to a static "South Korean model", which was based on the constant strength of either the government or business, but rather a collusion between the state and the chaebol, the large family-owned and managed businesses. The paper relates that Kim's thesis regarding the relationship between the chaebol and the state is weak, dismissing too easily the possibility that the chaebol's influence was actually stronger in the beginning of this economic development than stated.

From the Paper:

"Beginning with General Park Chung Hee's military coup in 1961, Kim argues that the state took on an authoritarian control over South Korea, launching an aggressive economic campaign called the Five-Year Economic Development Plan (EDP). The EDP focused on transforming the economy from agriculture to industry, mercantile to manufacturing, and production for domestic use to exportation. Park targeted the chaebol specifically rather than establishing state-owned enterprises or supporting small or medium-sized businesses. As Kim contends, the idea being here that growth would be faster if the state encouraged the big businesses to expand into export-oriented arenas. Via strong-arm tactics, economic sanctions involving low-interest-rate loans to successful exporters, internationalization, and colonial legacy, the chaebol became a model for other businesses in South Korea that would, according to Kim, eventually grow beyond the state's control."

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