This paper aims to examine whether the industrial development of South Korea has been transformed from the state-led developmental model towards the new balanced model as anticipated by the government after the 1997 Asian financial crisis. The new role of the state would surely transform under the new development model. However, the academic debate on what has been changed and its effectiveness remains. Our main research question is: in the pursuit of social equity and balanced development, has the role of the Korean state as well as institutional arrangements shifted? What factors influence the outcomes and obstacles? In summary, the South Korea state altered its role to decentralize resources to various private actors and delegate regional government and local agents, such as technology parks, research institutions, and universities. This initiative aims to promote endogenous growth through a bottom- up approach. Particularly, the approach for financial funding and technology transfer were derived from the United States neo-liberal method, namely, Silicon Valley model. However, the outcomes deviated from those expected. We conclude that path-dependent factors, such as chaebol-monopolized industrial structure and political cronyism issues, hinder the intent of such transformation.
Tamkang Journal of International Affairs 22(4), p.51-97