The Internationalization of the Korean Political Economy: Variations in the Liberalization of Trade, Foreign Direct Investment, and Finance

Abstract

This dissertation explores the process of foreign economic policy liberalization in Korea from 1980-2010. It accounts for variations in the degree of liberalization across sectors and issue areas through case studies centered on the policies related to trade, FDI, and finance. Sources of influences on this process such as democratization, the state’s developmental legacy, societal interests, ideational diffusion, and external stakeholders are incorporated into an analysis that identifies their impact on policy outcomes. This project looks at how significant changes in the internal and external parameters of the Korean economy generated coalitions favoring a more liberalized domestic economic order and those which sought to defend Korea’s state-centered, mercantilistic developmental model. It offers a detailed explication of the manner in which Korean policymakers sought to formulate political outcomes that accommodated a disparate array of actors with diverging preferences into the policy process, while seeking to serve their own particular multifaceted interests. It finds that while external and domestic proponents of reform were successful in pushing Korea into increasingly deeper levels of liberalization, these efforts were continually conditioned and often attenuated by the institutional legacies of the developmental era and the social forces that were unleashed by democratization. This left the Korean economy with a fragmented set of foreign economic policies that reflected the incomplete and highly contested liberalization reform initiatives that colored policymaking during this period.