Electoral Response to International Financial Crisis: The Role of Dispersed Interest Groups in South Korea's 1997 Presidential Election

In 1997, South Korea was hit by international financial crisis. In the ensuing presidential election, the primary issue was whether the crisis was best addressed by making structural changes to the old economic regime. Over the past several decades, South Korea's economy has been dominated by chaebol (large business conglomerates). Structural change involved cutting back chaebol financial privileges, changing their centralized system of corporate governance, and rationalizing their business operations and financial structures. Such changes meant massive layoffs. Using individual-level polling data in multinomial logit models of vote choice, we test the most widely used theories of preference formation based on individual economic interests. Vote changes among dispersed interest groups-poorly organized groups facing relatively high costs and low benefits of political mobilization-were crucial in explaining the victory of the more liberally-oriented opposition candidate, Kim Dae Jung. Occupation, age and region are significant in the expected direction in explaining changes in vote choice. Education and gender are also significant, but not in the manner expected; and the impacts of regionalism and gender are larger than expected. In general, the significant variables are more likely to have retrospective than prospective rationales, and it seems likely that these retrospective rationales are cultural as well as economic in character.