What Difference a Crisis? Continuity and Change in South Korea's Foreign Economic Policy

Abstract

This paper examines pre-crisis and post-crisis developments in Korea's foreign economic policy (FEP). In undertaking this exercise, it constructs a framework of FEP analysis within which these developments are studied. Korea's own 1997-8 financial crisis heightened pressures upon the country to introduce far-reaching policy reforms and structural economic adjustment. This pressure was partly formalized by the terms and conditions imposed by the International Monetary Fund's (IMF) 'bailout' programme. These and other crisis-related pressures were expected to make a profound impact on the structure, conduct and process of Korean FEP, which up to the crisis had been primarily orientated by neo-mercantilist principles. However, this paper argues that various sources of resistance pertaining to certain structural economic and socio-cultural factors will make these principles more resilient than commonly thought. Furthermore, the relative significance of continuity overchange in Korea's FEP is contended generally. It isalso argued that wider lessons can be drawn here, particularly relating to the resilience of the developmental state.