The Ebb and Flow of Government Regulation: An Exploratory Study on the Regulation of Business Groups in Korea

Abstract

When and why does government seek to introduce and strengthen the regulation of big business corporations, and when does government withdraw the regulation? In answering these questions, this study examines the ebb and flow of regulatory policy, which may be called a "regulatory tide." This study focuses on the effect of crucial political and economic changes such as presidential elections and economic recession. We propose that political changes tend to enforce the government and the ruling party to strengthen regulatory policy on business corporations. Economic forces tend to press the goevernment and ruling party to weaken regulatory policy and, in turn, regulatory policy tends to alternate strengthening and weakening periods. These propositions are examined using Korean regulatory policies on business conglomerations during 19802002.