Korean Economic Development: An Interpretive Model

Korean Economic Development: An Interpretive Model

Korean Economic Development: An Interpretive Model

Korean Economic Development: An Interpretive Model

Synopsis

Kuznets focuses on the four key characteristics of South Korean economic development since the mid-1960s: relatively high investment rates, labor market competition, export orientation, and a strong, interventionist government. He uses an informal model to simplify the complex relations that underlie Korea's outstanding growth and also assesses the relevance of the model for other countries. The work is designed to be read by non-specialists, in that no prior knowledge of Korea has been assumed. The work concentrates on economic issues, and policy choices are of particular interest. References are made to English-language literature on economic development in general and on Korean development in particular.

Excerpt

Korean Economic Development: An Interpretive Model focuses on the key characteristics of South Korea's economic development since the mid-1960s. There are four of these: high investment rates, labor market competition, export orientation, and a strong interventionist government. Other characteristics, such as the spread of education, rising agricultural productivity, and growing technological capacity, were candidates for inclusion but for various reasons were excluded. Any model intended to interpret Korean development has to answer two questions if it is to be taken seriously: Why a Korean rather than a Kenyan, Uruguayan, or some other model? and in what sense is the work a "model"? Korea is the model because Korea's economic development has been outstanding. the World Bank's World Development Report for 1992 shows, for instance, that annual average rate of increase in per capita gross national product (GNP) from 1965 to 1990 was higher for Korea than for any of the other more than 100 countries whose increase rates are shown.

The word model is used here in two senses. First, this book simplifies the complex cause-and-effect relations that explain economic processes. Such simplification trades breadth for a closer analysis of what seems most important. Second, while Korea's economic development is significant per se (Korea ranked fifteenth among all countries by size of gross domestic product, or gdp, in 1990), it should also apply elsewhere. in this sense the Korean model is a guide for speeding the pace of development in other countries. Readers should note that the model used here is an informal one. Characteristics such as competitiveness and policy intervention have been important in Korea but cannot be specified in quantitative terms as required by formal models.

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