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Capitalizing on democracy : the maintenance of the Korean developmental state and the promotion of small & medium enterprises Weisbart, Michael James


This study explores the relationship between democracy and the developmental state in Korea. It deals directly with two important puzzles: 1) If the developmental state has truly been dismantled, how can we explain the fact that it is continuing to identify strategic industries of the. future and then finance and underwrite their development through industrial policy? 2) How can we reconcile evidence of strong, concerted state behavior with normal assumptions that democracy and the developmental state are incompatible? Typical studies have provided accounts of the litany of reform measures that have appeared as early as 1980, concluding that the developmental state is no more. This study goes beyond those, arguing that the reforms only tell us one side of the story. It takes for granted that the old Korean developmental state model is gone. Rather, this study begins from the premise that if the institution is to be pronounced dead, scholars must first determine finally that the state is no longer acting as a developmental state, that it has not adapted and transformed itself in such a way(s) as to continue to promote economic development beyond an Anglo-American model. Unfortunately for celebrants at the developmental state's funeral, the empirical evidence does not support a simple thesis of demise. This paper has two major findings: One, the Korean Developmental State is extant, that convergence with an Anglo-American model has not obtained and is unlikely to in the future. Two, assumptions of the incompatibility of democracy and the developmental state are unfounded, at least in the Korean milieu. These two conclusions are arrived at through a diachronic exploration of the South Korean political economy before and after 1987 and, specifically, by exploring the strengthening of state promotion policy for Small and Medium Enterprises after the 1987 democratic transition.

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