| New chair of Korean Studies questions myths of “economic miracle” BY SALLY ACHARYA
Photo by Jeff Watts
Jungho Yoo delivered his inaugural lecture as Choon Wan Lim and Korea Foundation Chair of Korean Studies. |
South Korea began the 1960s poorer than Ghana or Bolivia. A few decades later, it is wealthier than some European nations. But the story of how that happened is fraught with myths, said Jungho Yoo in his inaugural lecture as chair of Korean Studies. Yoo joined AU this semester as the first holder of the Choon Wan Lim and Korea Foundation Chair of Korean Studies at the School of International Service (SIS). Lim, the father of three alumni, endowed the chair with the partnership of the Korea Foundation, which promotes knowledge of Korea through academic and cultural exchange programs. Yoo’s first public lecture, “Myths About the Korean Economic Miracle,” was an ambitious effort to “overturn the conventional wisdom,” in the words of SIS professor Peter Lewis, who commented afterwards. Yoo spoke to a packed audience at the Mary Graydon Center that included a number of Korean students and community members, including about a dozen of his former classmates from Seoul High School and their families. The South Korean “miracle” is widely believed to have been a result of authoritarian government policies that essentially forced modernization and gave it a jump start with export-led growth. Ironically, Yoo said, this lends ammunition both to the far right, which sees it as an example of the advantages of authoritarian leadership in the developing world, and the far left, which sees it as proof of the benefits of central planning. When President Chung-Hee Park took power through a military coup in 1961, promising to save Koreans from poverty, he was willing to “sacrifice almost anything” to his goal, including individual freedom and property rights, Yoo said. The Korean government undertook a drive to develop selected heavy and chemical industries that was “little different from a war plan in spirit.” While this naturally led to faster growth of those industries, Yoo said, South Korea’s ultimate growth was not the result of wise government interference. In fact, government policies were often at cross-purposes. His studies conclude that resources were misallocated, the growth rate of exports dropped, and real exports shrank during the government push in the 1970s. In Yoo’s view, the drive to expand heavy and chemical industries actually weakened light industry and reduced the overall competitiveness of Korean exports. A number of factors contributed to the huge expansion of the Korean economy, including the high level of education that already existed in Korea, Yoo said. But in his view, a major if under-studied fact was the size of the world market, which gave Korea an unprecedented potential for expansion at a historically remarkable pace. “The leftists and rightists in Korea . . . both appear to put much greater faith in the government than it deserves,” Yoo said. “Every government that controls or micromanages the economy . . . [will produce] infringement on individuals’ freedom and property rights. Both sides seem to think that this infringement is a political matter with little consequence for the economy, or is a small price to pay for economic gains.” But, he said, “Nothing is farther from the truth.” The speech was followed by commentary and a discussion of Yoo’s points by Lewis and Marcus Noland of the Institute for Inter-national Economics, author of several books on the two Koreas. Lewis said he found Yoo’s talk “extremely stimulating, extremely provocative, and very engaging.” He was sympathetic with Yoo’s effort “to dispel the attraction of statism and authoritarian control” but added that “seeing the state as a crucial variable in economic performance is not the same as saying state intervention is necessary.” Lewis, an Africa specialist, noted that many African states would have liked to expand imports during the same period that Korea took advantage of the world market, and in fact applied some of the same policies, but without the same effect. Investment policies often look about the same on paper, but “policies have invariably failed [elsewhere] because of pervasive nonenforcement,” and so the South Korean story can be seen, alternatively, “as a rare instance of successful intervention, mainly because of successful enforcement.” Lewis said that what has been particularly impressive in South Korea has been its ability to enforce policies and sustain them over the long run. Noland continued the discussion by adding his own thoughts on what, if not government policy, might explain the Korean “miracle.” How did a country that started out poorer than Ghana end up richer than some European nations? Many observers take a “culturally essentialist” position, he said, simply stating that “Koreans are Koreans.” However, “the existence of North Korea points to a different explanation. Clearly being a Korean is not a sufficient reason.” In some sense, Korea in the 1950s was “deceptively poor,” Noland said. The war had devastated its economy, but as Yoo had pointed out, its educational level was unusually high. There were also a high number of skilled people who could, for instance, maintain advanced manufacturing plants. All these factors, he said, may have been factors that contributed to Korea’s growth. In addition, its lack of natural resources have added to South Korea’s development by forcing it to go into manufacturing relatively early in its development. Audience and community members added their own thoughts and questions to the discussion afterwards. Commented Louis Goodman, dean of SIS: “I have to say I’ve rarely heard such a satisfying lecture and commentary.” |
