The macro impacts of Korea's Heavy industry drive re-evaluated

The Korean heavy industry (HCI) drive has been criticised for the misallocation of capital and for negative spillover effects on growth, inflation, the current account and debt. However, such criticism places too much blame on HCI for the late - 1970s' economic deterioration and gives HCI insuf...

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Bibliographic Details
Published in:The Journal of development studies 1992-10, Vol.29 (1), p.24-48
Main Author: Auty, R.M.
Format: Article
Language:English
Subjects:
Chemical Industry
Development
Economic Development
Economic Factors
Evaluation
Heavy industry
Industrial development
Industrial economics
Industrial policy
Industrialization
Industry
Korea
Korea, South
South Korea
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Summary:The Korean heavy industry (HCI) drive has been criticised for the misallocation of capital and for negative spillover effects on growth, inflation, the current account and debt. However, such criticism places too much blame on HCI for the late - 1970s' economic deterioration and gives HCI insufficient credit for the subsequent economic rebound. Korean HCI was a catch-up exercise which attracted cheap foreign capital to accelerate structural change. Nevertheless, the mid-1970s' decision to pursue HCI as a Big Push was flawed since it did result in project bunching that strained implementation capacity, despite the safeguards which Korea built into its HCI strategy.
ISSN:0022-0388
1743-9140
DOI:10.1080/00220389208422260