Governments Role in Koreas Economic Development from a Perspective of the Institutions Hypothe

Abstract

This paper divides economic institutions into three categories—coordination institutions, property rights institutions, and contracting institutions—and from this perspective, analyzes the role of government in Koreas economic development from the 1960s to the 1980s. This analysis suggests that the Korean development experience is not in line with the conclusions of Acemoglu, Johnson, and Robinson (2001), since property rights institutions did not play a significant role in Koreas economic development. Instead, the Korean government acted as coordination institutions, which effectively overcame the coordination failure of the market and succeeded in generating effective demand to spur sustainable growth. These results invite further comparative and empirical studies on how Korea came to have a dictator whose goal was consistent with the economic growth of the nation.