The Role and Effects of Efficacy in Socioeconomic Development and Foreign Direct Investment: A Comparative Study of South Korea and Singapore

Abstract

There is a sizable amount of research and explanation concerning the rapid and sustainable development of newly industrialised countries (NIC) in Asia. This article seeks to create a deeper understanding of the relationships between the governmental sector, the economic sector, and the social sector in the Asian political arena. As such, it will explain how policies pursued in selected countries could have impacted the economies of the so-called ‘tiger’ or ‘dragon’ countries. In addition, the study will show how governmental efficacy is connected with socioeconomic development by means of comparing, as exemplars, South Korea and Singapore, in the period 1960– 2007. The investigated period experienced heightened socioeconomic development in South Korea and Singapore. Stressing the historical evolution of socioeconomic development, the researcher accordingly focused on social, political, and economic outcomes in their relationship with the factor of macroeconomic stability and the varying amounts of foreign direct investment in the two nations. This study looks to create a deeper understanding of the role of government efficacy and socioeconomic development in an Asian context in which government efficacy and political development and institutions have played important roles in creating stable and continuous social and economic development. This idea of government efficacy and political development has helped to strengthen the capacity of governments to adapt and adjust their political agency’s capability to achieve political goals and sustainable socioeconomic development. South Korea has created institutions that are simpler than complex organisations and may lack autonomy and coherence. In contrast, Singapore has created complex and autonomous institutions with strong coherence. The findings in