Political and Economic Democratization and Its Impact on the Government-Business Relationship in Korea

Abstract

Under the authoritarian market economy system, Korea has achieved a demonstrably successful economic performance. But its inherent systemic tension and conflict, which had been suppressed under the repressive rule, has since 1987 begun to unravel. A series of political democratization moves are still coming on stream and social demands for economic democratization press for a change in economic policy in the direction of correcting economic and social imbalances. Following the change in the relative political strength among proximate policymakers, the state economic policy-making structure and process is undergoing a significant change, and the existing government business relationship, biased generally for big business, has come under siege. The potential impacts of these recent changes on the economy's performance have not yet been fully materialized. It must be heeded, however, by responsible political actors that, when the institutional values of a democratic and pluralistic society are overly valued, they inevitably exact a price in terms of the slackening efficiency and the loss of adaptability to the rapidly changing world economic conditions, as the experiences of the advanced democratic industrial countries, particularly the U.S., show.