Neo-liberal Korea and Still Developmentalist Japan: Myth or Reality?

• Published in: Global economic review 2009, 38(3), , pp.277-295
• Main Authors: Kwak, Sun Young, Lee, Yong Wook
• Format: Article
• Language: English
• Subjects: business systems framework; Capitalism; Comparative Analysis; Development Strategies; developmental state; Economic Development; Empirical research; Financial liberalization; institutional change and continuity; Japan; neo-liberal reform; Neoliberalism; Political Economy; Qualitative analysis; South Korea; Varieties of capitalism; 경제학
• ISSN: 1226-508X; 1744-3873
• DOI: 10.1080/12265080903157334

In the “varieties of capitalism” debate, scholars have paid considerable attention to the question of whether Korea and Japan have left behind their interventionist political economy for neo-liberal reform. In this paper, we re-examine the scholarly consensus that Korea has become a neo-liberal state, while Japan has not changed much. On the basis of our comparison of the extent of the two countries' neo-liberal reforms using the “business systems framework” developed by Witt, we demonstrate that neo-liberal reforms observed in Korea and Japan are not substantially different enough to warrant the view that the two countries have taken divergent paths of institutional development. With this finding, we call for further empirical study, including the development and use of more qualitative data. We suggest that the future direction research should take on this issue in order to make theoretical contributions to the existing literature on institutional change and continuity in “non-liberal” capitalist countries. We do this by offering some methods in which future researchers could identify necessary and sufficient causes of Korea's and Japan's neo-liberal (or non-neo-liberal) shift.