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Industrial policy as an engine of economic growth: A framework of analysis and evidence from South Korea (1960--96)

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  • Jongseok Lee
  • Iain Clacher
  • Kevin Keasey

Abstract

The recent financial crisis has raised significant questions about liberal free-markets as a mechanism for generating economic growth compared to those economies where there is greater state intervention. This article develops a theoretical framework for economic development that can explain historical changes in both industrial policy and economic growth where the state actively intervenes to direct economic development. The article then applies this framework to the case of South Korea where there is a strong interventionist government. The results show that economic development can be explained within a sequential framework of policy intervention and that rather than being a static decision, successful state intervention is a dynamic and evolutionary process.

Suggested Citation

  • Jongseok Lee & Iain Clacher & Kevin Keasey, 2012. "Industrial policy as an engine of economic growth: A framework of analysis and evidence from South Korea (1960--96)," Business History, Taylor & Francis Journals, vol. 54(5), pages 713-740, December.
    • Handle: RePEc:taf:bushst:v:54:y:2012:i:5:p:713-740
    DOI: 10.1080/00076791.2012.683420
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    References listed on IDEAS

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    1. Lazonick,William, 1993. "Business Organization and the Myth of the Market Economy," Cambridge Books, Cambridge University Press, number 9780521447881, January.
    2. Mehdi SHAFAEDDIN, 1998. "How Did Developed Countries Industrialize? The History Of Trade And Industrial Policy: The Cases Of Great Britain And The Usa," UNCTAD Discussion Papers 139, United Nations Conference on Trade and Development.
    3. Geoffrey M. Hodgson (ed.), 2002. "A Modern Reader in Institutional and Evolutionary Economics," Books, Edward Elgar Publishing, number 2182.
    4. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," CEPR Discussion Papers 4767, C.E.P.R. Discussion Papers.
    5. Renshaw G., 1986. "Adjustment and economic performance in industrialised countries: a synthesis," ILO Working Papers 992496723402676, International Labour Organization.
    6. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters, in: Understanding the Process of Economic Change, Princeton University Press.
    7. Cho, Y.J. & Kim, J.K., 1995. "Credit Policies and the Industrialization of Korea," World Bank - Discussion Papers 286, World Bank.
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    Cited by:

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    2. Emilia Landa Shikomba & Elizabeth Elias & Sirorat Ruttanawijit, 2021. "Industry Policy Effects On Namibia'S Economic Growth," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 19(1), pages 13-22, May.
    3. Zhao, Lyuhang & Ruan, Jianqing & Shi, Xinjie, 2021. "Local industrial policies and development of agricultural clusters: a case study based on a tea cluster in China," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(2), February.

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