Leader, Government, and Market: The Economic Development of South Korea and Taiwan in the 70s and 80s

Abstract

South Korea and Taiwan experienced the extremely rare type of high-level, sustained postwar economic growth.
While it has attracted the attention of many scholars who found out the identical pattern of economic development
between South Korea and Taiwan by focusing on the similar structural conditions, relatively less attention has been
given to the development mechanism South Korea and Taiwan employed to develop their economy. Furthermore,
few studies have highlighted the role of actors in the process of economic development in South Korea and Taiwan
because most of previous studies have focused on the structural conditions. This study aimed to examine how South
Korea and Taiwan have developed their economy by discovering the type of a development mechanism employed.
Based on using the set of secondary data source, this study found out that South Korea and Taiwan achieved a
phenomenal economic development based on the export-oriented industrialization. However, South Korean economy
was developed by the government-led development mechanism, while Taiwanese economy was developed by the
market-led development mechanism. And, the difference in the way of developing their economy was mainly caused
by not only several structural conditions, such as the consensus between the government and private sector over the
matter of economic development, the urgency of economic development, and the existence of vertical social system,
but also the characteristics, such as the leadership style of key policy makers.