Abstract
Reform is multi-faceted. Looking back on the history of South Korea’s political economy, South Korean society has displayed diverse patterns of economic reform in terms of goals, contents, means, and processes. Winners and losers have different notions of reform based on what potential benefit they can get from institutional change. Different stakeholders and actors may assume and pursue different goals, interests, ideas, and patterns of reform throughout the whole process of institutional change. Only fact we can agree on is that all reforms, for better or worse, take the form of institutional change. How can we identify the mechanism or politics, which often remain vague and mysterious, of institutional change? To answer these puzzles, we need to elaborate on institutional analysis by tracing the detailed process and examining how related variables interact on a specific issue in a critical period. Decoding the mechanism of institutional change has been one of the main research tasks in neo-institutional political economy. Diverse paths of institutional change can reflects the nature of real politics that define the internal workings of state behavior.
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Notes
- 1.
At the time, management rights were seriously threatened due to a decline of corporate value of over 50% compared to the end of 1996 as a result of the reduction of stock prices and the exchange rate (The Chosun Ilbo, February 5, 1998a).
- 2.
The agreement was delayed for 4 months due to the World Bank’s conditions for providing structural adjustment loans of two billion dollars. As the government agreed to accept most of the demands, they reached an agreement on September 24, 1998.
- 3.
In a letter the US Secretary of the Treasury sent to Congress, the evaluation results stated that the IMF funds were not used to financially support these six industries, and it was reported that the debt of these sectors was not guaranteed.
- 4.
Even here, the transformation to holding companies is not mentioned, but there is an indirect expression of opinion stating that “if holding companies are legally permitted” that it would reform the organization accordingly.
- 5.
In the government report “100 Policy Tasks to be promoted by the New Government,” the “policy to allow holding companies during the president’s term in office, and to abolish the ceiling on the gross amount of investment according to the complete permission of hostile takeovers” was specified.
- 6.
The research “Evaluation and Improvement Measures for South Korea’s Prohibition on Holding Companies (1998)” seems to have generally referred Japan’s proposal to lift its ban on holding companies.
- 7.
The committee operated temporarily and its membership consisted of the following: 4 members from government departments including the Assistant Deputy Minister of the Ministry of Finance and Economy and 11 members from academia, private companies, and research institutes.
- 8.
With this proposal from the Ministry of Finance and Economy, the submission of a revised Fair Trade Act to the Cabinet council was delayed, and the executive directors of both departments renegotiated the matter.
- 9.
At the public hearing held by the NCNP policy committee on September 17th, 1998, the People’s Solidarity for Participatory Democracy (PSPD) clearly expressed an opposing position, stating that “if pure holding companies are permitted, the ceiling on gross amount of investment needs to be revived in a limited fashion to prevent the dangers of a joint operating holding company.”
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Lee, S., Rhyu, Sy. (2019). Policy Ideas and Interest Alignment in the Process of Institutional Change in Chaebol Reform. In: The Political Economy of Change and Continuity in Korea. The Political Economy of the Asia Pacific. Springer, Cham. https://doi.org/10.1007/978-3-319-71453-0_2
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