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Economic Crises and Policy Regimes

Economic Crises and Policy Regimes

The Dynamics of Policy Innovation and Paradigmatic Change

Edited by Hideko Magara

In this innovative book, Hideko Magara brings together an expert team to explore both the possibilities and difficulties of transitioning from a neoliberal policy regime to an alternative regime through drastic policy innovations. The authors argue that, for more than two decades, citizens in developed countries have witnessed massive job losses, lowered wages, slow economic growth and widening inequality under a neoliberal policy regime that has placed heavy constraints on policy choices.

Chapter 8: Political response to economic crisis in 1997 and 2008 South Korea

Hyug Baeg Im

Subjects: economics and finance, political economy, welfare economics, politics and public policy, political economy, public policy, social policy and sociology, economics of social policy


In 1987, Koreans, for the first time since Park Chung Hee's Yushin dictatorship, directly elected their president and succeeded in democratic regime change. However, despite political regime change, what Adam Przeworski calls 'policy regime change' (Przeworski 2001, 2010) did not take place. The main pillars of a developmental state policy regime of an authoritarian period remained intact under new democratic governments. The policy regime did not change because 'crises of success' created the conditions for democratic transition in South Korea. The authoritarian dictators had to withdraw from power because they had accomplished the historical mission of economic development and thus became historically obsolescent. After the political regime change, while democratically elected governments have made many political and social reforms such as instituting liberal democratic institutions, depoliticization of the military, decentralization of power, holding local elections, instituting an American-style law school and so on, they have carried out few reforms with regard to the economic policy regime and have largely followed the major economic policies of their authoritarian predecessors. However, the old policy regime could not be sustained indefinitely. The Korean developmental state policy regime was not sustainable when faced with external as well as internal political and economic changes such as the end of the Cold War, global hegemony of neoliberalism and the alternation in power between political parties.

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