Visible Success And Invisible Failure In Post-Crisis Reform In The Republic Of Korea : Interplay Of The Global Standards, Agents, And Local Specificity (original) (raw)

Reforming Korea INC.: The Politics of Structural Adjustment Under Kim Dae Jung

1999

Korea has recovered more rapidly from the Asian financial cri sis than other countries in the region. The swift recovery can be attributed to decisive reform efforts by the Kim Dae Jung govern ment. This article examines reform efforts in three areas-the finan cial sector, corporate restructuring, and labor markets-and traces them to a skillful use of presidential power, including the exploita tion of a “honeymoon,” trilateral consultations with business and labor, and the creation of powerful administrative agencies. Howev er, the adjustment strategy of the Korean government also has a number of “command and control” elements, particularly with respect to financial and corporate restructuring, and has involved increasing state ownership of banking and corporate assets. The result is that the government still faces the task of how to realign government-business relations in the future.

The politics of market reforms: Korea's path from Chaebol Republic to market democracy and back

Contemporary Politics, 2009

This paper studies the politics of market-oriented reforms in Korea since the 1997/98 financial crisis. It focuses on the capacity of the state to implement these reforms, and challenges the view that successfully implemented market reforms follow a technocratic ‘best practice’ approach. On the contrary, this paper argues that reforms in Korea were relatively successful because they were political projects that went beyond ownership concepts of the IMF and World Bank. The temporary weakness of big business (chaebol) and the formation of reform coalitions by the government created a balance of power between societal interest groups that opened a political space for the government. The state regained some of the autonomy it had lost during the ‘Chaebol Republic’ from 1987 to 1997 and was able to implement reforms in a temporary corporatist framework. However, the chaebol adapted to the new situation and used the market-friendly reforms in their favour. The re-emergence of the chaebol undermined state autonomy and with the inauguration of the new President and former chaebol CEO Lee Myung Bak in 2008, Korea is arguably entering the second Chaebol Republic.

Restructuring Revisited: Flexible Korea and Rigid Japan*

2003

Korea has successfully undergone economic restructuring, as compared to Japan. The "flexibility" of Korea and "rigidity" of Japan are strongly related to the differences between development strategies the two countries adopted. Although Korea adopted the Japanese developmental state model, it excluded workers from the development coalition. Whereas excluded workers had been a source of instability in the Korean system, the well-found coalition of government, business, and workers in Japan had guaranteed stability of the system. This difference was not conspicuous before the economic crises; strong performance of the Korean economy and a heavy-handed government had silenced discontented Korean workers. When the crisis occurred, Korean workers demanded the overhaul of the system, while Japanese workers did not. While Japan attempted to protect the system, Korea dismantled it due to the lack of support of the disenchanted Korean people, in addition to pressure from IMF and foreign countries. Though Korea has been successful in revamping its economic system and regaining economic growth since restructuring after the economic crisis of 1997, the new system is not stable. Workers, still not fully represented in national decision-making processes, are calling for revision of the system, and are frequently expressing their anger. Japan, reluctant to accept an Anglo-American economic model, is struggling to get out of a sluggish economy, but it still enjoys a relatively stable social system.

Korean labour relations in transition

2002

Le but de cet article est d'examiner la signification des changements dans les relations de travail avant et après la crise économique au regard des nouvelles formes émergentes de subordination des travailleurs au capital à travers diverses mesures de flexiblilisation, cela tant au niveau national qu'au sein des milieux de travail. La période comprise entre 1987 et 1996 fut marquée, dans l'histoire du développement capitaliste coréen, par la confrontation entre le capital et le travail, rapport qui s'est cristallisé dans la formation d'un « mouvement de syndicats démocratiques » hautement politisé. Ce n'est qu'à partir de la crise économique de 1997 que l'État capitaliste et les entrepreneurs privés ont pu regagner un contrôle effectif sur le facteur travail en soumettant ce dernier aux impératifs de la logique marchande. En d'autres termes, c'est le marché du travail flexiblilisé, basé sur une forte compétitivité, qui détermine les mécanismes de gestion des ressources humaines et qui a permis aux entrepreneurs de diluer, de façon effective, le militantisme des syndicats sur le lieu de travail. Une étude de cas sur les relations de travail dans l'entreprise Hyundai Motors Car a révélé que, avec le degré grandissant de flexibilité et d'insécurité au travail, les relations de travail apparaissent maintenant sous une forme substantiellement différente. Cette forme de relation de travail n'est pas simplement basée sur un contrôle coercisif de l'État sur le travail, mais plus fondamentalement sur une subordination plus volontaire des travailleurs individuels au capital privé. Cependant, la marchandisation du travail flexiblilisé semble avoir une double-nature. Dans une tentative pour institutionaliser le marché du travail flexiblilisé, l'État joue un double rôle, intégrant, d'une part, les syndicats dans un espace corporatiste, comme la Commision tripartite, et d'autre part, utilisant des mesures autoritaires contre n'importe quelle violation du règlement venant nuire à la flexibilisation du marché du travail.

The new Korea: crisis brings opportunity

1999

Financial Reform to Date Our analysis of Korea's prospects leads us to believe that Korea will not be secure against future economic crisis without structural reform of finance, enterprise, and labor markets. This is a difficult task for any country. Success inevitably creates strong vested interests, deeply ingrained habits, and a tendency to seek salvation in the solutions of the past. Will Korea resist this temptation and undertake long-term structural reform? Under current conditions, we anticipate that: • Reform of the Korean finance system will stop at recapitalizing banks and solving bankruptcies. • Enterprise reform will not be sufficient to restrain family control over chaebols. • Korean labor reform will not proceed beyond the recent agreement to allow layoffs only with government approval. Given these anticipated levels of reform, the prospects for future sustained growth are fragile. An Alternative Approach Structural reforms must be built upon what is politically feasible. The International Monetary Fund (IMF) can work with key stakeholders, identify necessary tradeoffs, and promote broad social consensus so that the reforms are politically durable. To overcome the deadlock in Korea, we suggest as a solution that international financial institutions, the IMF and World Bank, facilitate a labor reform agreement between President Kim Dae-Jung and the chaebols that would allow a tradeoff of a more open labor market in exchange for opening the financial system. With the political capital gained through this reform, the government can go on to promote minority shareholder rights within chaebols. Structural reform in Korea has been slow because multilateral officials have not coordinated appropriate tradeoffs among politically significant stakeholders. As a result, the proposed reforms have not been not politically viable. Reform bargains need to overcome the divergent interests of key stakeholders. Without such coordination, reform is inherently unstable. For conditionality to be politically viable, it must be self-enforcing; domestic political coalitions must view the reforms to be in their own interests, and they must be able to take ownership of those reforms. International financial organizations can help broker reforms, but successful implementation occurs at home.