Restructuring the National Economy

by Lee-Jay Cho, Yoon Hyung Kim, and Chung H. Lee (eds.)

Tiger Books

Publisher: Seoul: Korea Development Institute
Available From: Korea Development Institute
Publication Date: December 2001
ISBN: 89-8063-118-9
Binding: paper


Increasing globalization in the twenty-first century will present South Korea with many new challenges. Most of its domestic markets will become increasingly integrated into world markets, and many of its firms will be competing with global players, both at home and abroad. How successful will Korea be in meeting these challenges of globalization? Will it need to restructure its economy with new institutions better suited for the world of globalization? If so, what are the "models" that Korea should follow?

The papers in this volume, a product of a project jointly organized by the Korea Development Institute and the East-West Center, attempt to address some of those issues relating to globalization. The topics selected for investigation are the labor market, the financial market, and the government-business relationship in Korea—three areas that, in the opinion of the project organizers, are in the greatest need for institutional reform in Korea. On each topic the reform experiences of the United States, European and other OECD countries are analyzed, followed by a discussion of Korea's record of institutional reform in that area. It is hoped that such a comparison would provide a guide for institutional reform in Korea.

One common theme throughout the volume is that there may not be a ready-made blueprint for "successful" institutions that Korea can import from abroad. Institutions that are successful, for example, in the United States may not be effective in Korea because they are not compatible with Korea's indigenous informal institutions. In that case either the imported institutions or the extant informal institutions will have to be modified if institutional reform is to be successful.

For an institutional reform to be successful, it has to be accompanied with appropriate policy and action in human resource development, the quality of people being critically important in the proper functioning of an institution. It also requires consistency and continuity in reform process. A challenge thus facing Korea is whether it can develop the political leadership that will provide consistency and continuity in institutional reform aimed at long-term sustainable economic growth.