The changing dynamics of state-business relations and the politics of reform and capture in South Korea

The Choi Soon-sil scandal, which led to the arrest of the de facto leader of Samsung Group Lee Jae-yong and the impeachment of President Park Geun-hye, exposed the ugly features of state capture in South Korea. Although the 1997-1998 financial crisis highlighted the problems of crony capitalism, it...

Full description

Saved in:
Bibliographic Details
Published in:Review of international political economy : RIPE 2021, Vol.28 (1), p.81-102
Main Author: You, Jong-sung
Format: Article
Language:English
Subjects:
Bribery
Business
Capitalism
capture
Case studies
Chaebol
Civil society
Corporate governance
Corruption
Democratization
developmental state
Economic crisis
Globalization
Governance
Government
Groups
Impeachment
Inequality
Loans
Lobbying
Nepotism
Offenses
Policy making
Politics
Presidents
Public finance
Reforms
Regulation
Samsung
Scandals
South Korea
state-business relations
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The Choi Soon-sil scandal, which led to the arrest of the de facto leader of Samsung Group Lee Jae-yong and the impeachment of President Park Geun-hye, exposed the ugly features of state capture in South Korea. Although the 1997-1998 financial crisis highlighted the problems of crony capitalism, it has been widely recognized that South Korea overcame the crisis by implementing far-reaching reforms of the chaebol's corporate governance. This article explores why the post-crisis reform failed to end the practices of crony capitalism and why global companies like Samsung engaged in such corruption through a historical case study of Samsung Group. It highlights how increasing inequality and chaebol concentration have produced both popular pressures for institutional reform and incentives for chaebol to capture the policy-making process in the context of the changing state-business-civil society relations in the democratic post-developmental state era. I find that while the main objective of the chaebol's bribery and lobbying of the government before the financial crisis was business expansion through the acquisition of low-interest loans and other government favors, it has changed to weakening or circumventing government regulations on corporate governance in order to achieve easier and cheaper dynastic successions of corporate control.
ISSN:0969-2290
1466-4526
DOI:10.1080/09692290.2020.1724176