Neo‐liberalization and Incorporation in Advanced Newly Industrialized Countries: A View from South Korea

Historically closely associated with interventionist growth strategies, the demise of corporatism was widely predicted as neo‐liberalism became the dominant economic paradigm from the late 1970s. The experience of social dialogue and social pacts in continental Europe during the 1980s and 90s, however, suggests that corporatism may have found a new economic purpose in the era of neo‐liberalism. Similarly, in the developing world, the intellectual aversion to government accommodation of ‘special interest groups’ that accompanied the early phase of economic liberalization has given way to a more sophisticated appreciation of the economic advantages of social compromise. Using the case of South Korea, a country that recently established a social pact in support of its economic liberalization drive, this paper seeks to extend our knowledge about the compatibility between neo‐liberalism and incorporation. The results contribute to the wider debate about the possibilities of diverse patterns of government–business–labour relations under ‘actually existing’ neo‐liberalism. As one of the most advanced and successful newly industrialized countries, South Korea shares structural–institutional affinities with both advanced and developing societies. Hence, it represents an intermediate case of relevance to both the mature European and ‘third wave’ democracies.