Understanding Koreas Saemaul Undong: Theory, Evidence, and Implication

Abstract

This study attempts to derive a theory of Saemaul Undong (SMU) by identifying its key success factors and to discover its policy implications for economic development. The proposed theory argues that the success of the SMU was fundamentally driven by the governments strong adherence to the economic discrimination (ED) principle of rewarding high performance and penalizing low performance, which is the basic function of the market. ED is the grand principle behind the success of the SMU. This study draws upon detailed historical and personal accounts about how the SMU was implemented by former President Park Chung Hee to show how faithful the SMU was to the ED principle. In addition, the study provides a new empirical model to estimate the effect of the SMU on economic growth and shows that the SMU had been a significant contributor to Koreas high growth performance during the 1970s. One of the main policy implications of the SMU is that development and social policies should comply with the ED principle by preventing any political influence from working against the ED principle for the success and sustainability of those policies. Finally, the study argues that the SMU model provides an alternative or complementary perspective to the existing community development models.