36
An Overview of Country Experiences

This chapter briefly describes the individual experiences of each country case in the light of the foregoing discussion. We pay relatively more attention to Finland and Austria, since many excellent analyses (especially Wade, 1989; Amsden, 1989) have already been devoted to the two Asian miracles.


36.1 Korea

Korea illustrates most of the elements outlined above. The Korean state has been very strong not only towards labour but also towards business. The Korean state has offered large rewards for successful entrepreneurs, but it has also had the ability to discipline business: 'where Korea differs from most other late industrialising countries is in the discipline its state exercises over private firms' ( Amsden, 1989, p. 14).

The historical roots of the strength of the Korean state have been analysed by Amsden ( 1989). The Japanese colonization of Korea left a vacuum of power after World War II, and the state was able to establish its power in the 1960s because of the weakness of social classes. The landlord aristocracy had been dispersed by land reform, the working class was too small and too weak to pose a serious challenge, and capitalists had become dependent on government subsidies. The military government nationalized the banks in 1961, which gave the state the power to determine the allocation and timing of industrial investment.

Thus there is no question of the strength of the Korean state. But it was also confronted with checks and balances that prevented a degeneration into pervasive corruption. Amsden emphasizes the role of the student movement as well as that of external pressures and the US administration. The student movement was important because it presented the state with a constant danger of rebellion which in turn 'disciplined' the

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