| Summary: | South Korea has long been touted as an outstanding model of economic development. Despite poor resource endowment and a large population, a colonial legacy, the devastation following a civil war, persistent political instability, and the lingering military confrontation with her northern neighbour, Korea's role in the international economic system has rapidly increased in importance since the 1950s. For nearly four decades, Korea has achieved a remarkable economic performance that transformed the country from a typical case of a developing nation trapped in a "vicious circle of underdevelopment", into one of the largest economies in the late 1990s. Several factors account for the Korean economic success, from high levels of domestic investment and savings and a growing volume of exports, to the improvement of the quality of life reflecting decreased poverty levels, longer life expectation and lower fertility rates. Beneath the economic success lays a system of "socialisation of private risk", a particular mode of organising the market, as the "visible hands" of a strong and developmental state was able to accelerate the pace of economic growth by identifying strategic industrial sectors, making discretionary allocation of resources to those sectors, and minimising the collective action dilemmas pervasive in most developing countries. Yet, how the developmental state's policy goals were designed, negotiated and implemented remains much of a "black box". This research argues that to understand the policy process in Korea, it is crucial to examine the central role played by Korean leaders and how their policy choices are shaped by the dynamic interaction of institutions, history, context, ideas and coalition politics.
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