South Korea's developmentalism and contemporary telecommunications industry (1990s to the present) : what changed, what remains the same and why?

• Main Author: KIM, Marie Kangyeon
• Language: English
• Published: University of British Columbia 2013
• Online Access: http://hdl.handle.net/2429/43860

This paper seeks to explicate the diminishing significance of South Korea’s “industrial policy practices” in the context of that country’s economic development, using the telecommunications industry during the period 1990 – the present as a case study. Drawing upon the work of scholars like Peter Evans and Meredith Woo-Cummings of the Institutional School and Martin Hart-Landberg, who is associated with Historical Structuralism, I shall examine the idealistic and pragmatic/political components underpinning South Korea’s developmental culture, embodied in the so-called Korean Developmental state. This paper acknowledges the “nationalistic” vision informing “Korean Developmentalism” and its influence on contemporary policymaking in IT-related industries throughout the 1990s and continuing up to the present. It also examines the decline in state autonomy in the area of policymaking due to political realignment (among state, private and foreign capital in the context of local policymaking) and loss of bureaucratic efficacy (due to the lack of organizational coherence) and the diminishing relevance of the state’s “strategic” vision in the eyes of local private capital throughout the 1990s and continuing through to the present. Two sets of empirical cases are examined here with a view to illustrating the challenges facing “strategic policymaking” during different periods. The first two pertain to the liberalization process in telecommunications markets (early 1990s-mid 1990s) and the 1994 policy of standardizing network technology in the domestic 2G market. Next, I shift my focus to examining the strategic policymaking process during the post-financial crisis (1997-1998) and post-WTO (1997) periods. First, I examine Ministry of Information and Communications (MIC)’s failure to groom “national champions” in the service sector in the context of the 2001-2003 M&A bidding war over Hanaro between AIG- Newbridge Capital and LG. Finally, this paper draws attention to another MIC policy setback during the period extending from the early 2000s through to the mid 2000s: the failure to coordinate network technology in the 3G mobile market owing to inability on the part of MIC to persuade local service providers to adopt its choice of technology.