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1. The Implications of Korea’s Experience Supporting Democracy as a Global Narrative

Author:
Taekyoon Kim
Publication Date:
10-2021
Content Type:
Commentary and Analysis
Institution:
East Asia Institute (EAI)
Abstract:
With many developing countries in need of help in settling democratization processes and systems, Korea is in a position to act as a bridge between developed and developing countries by sharing its knowledge and experience in democracy and political reform. Taekyoon Kim, a professor at Seoul National University, describes the main contents of Korea’s democratic aid, how to share the Korean democracy experience and the challenges and strategies for Korean democracy in the future. Through this, the author states that the direction of Korea’s democracy should move forward based on its experience and that Korea should use its democratic aid as an asset so that Korea can be recognized as a symbol of peace and democracy in East Asia.
Topic:
Democratization, Development, Reform, Democracy, and Peace
Political Geography:
South Korea and Korea

2. Determinants of Korean Outward Foreign Direct Investment: How Do Korean Firms Respond to the Labor Costs of Host Countries?

Author:
Hanbyul Ryu and Young Sik Jeong
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Low cost of labor has been one of the major incentives that foreign firms invest in many developing countries. Yet, many developing countries including China and ASEAN have recently experienced a rapid increase in labor costs. Using the wage information provided by JETRO, this study examines how Korean FDI outflow is affected by the increase in labor costs of the manufacturing industry in host countries. The results indicate that the worker’s and engineer’s wages in Asian developing countries, who accumulated at least 3 and 5 years of work experience, have generally a negative impact on Korean FDI outflow. However, there exist positive relationships between the wages and FDI when the wages stay at very low levels. We do not find evidence that labor costs make a significant impact on Korean FDI outflow to European or Developed countries.
Topic:
Development, Foreign Direct Investment, and Labor Market
Political Geography:
China, Asia, and Korea

3. Integrating Climate Change into Development Cooperation – Korea's Experience

Author:
Jione Jung and Jihei Song
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Korea has reached milestones in development cooperation over the past two decades. At the same time, it has sought for various measures to better incorporate climate consideration in its cooperation activities. However, a number of challenges remain and further action is required in improving the system and practices to better integrate climate change into Korea’s development cooperation. We aim at providing an overview of Korea’s progress in integrating climate change into its development cooperation to share the experiences and to highlight some achievements. In doing so, we first review how other developed countries have promoted climate change integration. Through comparison with Germany, the United States, and Switzerland, we summarized several achievements made by Korea in the area of development cooperation. In addition, we identified areas for further improvement to better integrate climate change into development cooperation, as well as projections for the next phase of Korea’s development cooperation to begin in 2021.
Topic:
Climate Change, Development, and International Cooperation
Political Geography:
Asia and Korea

4. Foreign Aid to Fragile States: How Effective Does It Work?

Author:
Yul Kwon, Jisun Jeong, Yoon Sun Hur, Jihei Song, Aila Yoo, and Mi Lim Kim
Publication Date:
09-2020
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Korea has put much effort into providing aid for fragile states in efficient and effective ways. As a part of such efforts, Korea established the Fragile States Assistance Strategy in 2017. However, there is still room for improvement in terms of the effectiveness of Korea’s Official Development Assistance (ODA) implementation under fragile and conflict-affected situations. Accordingly, the study aims to suggest policy suggestions for Korea’s development cooperation in fragile states by comparing and analyzing the current status, policies, and characteristics of aid to fragile states in major donor countries, including Germany, Australia, Denmark, and Japan. In addition, we review Korea’s case and draw following policy implications to tackle the remaining challenges. First, it is requisite for Korea to consolidate the whole-of-government approach and reciprocal coordination mechanisms to support for fragile states for overcoming fundamental causes of fragilites. Second, Korea should choose proper types of aid and sectoral aid allocation suitable for overcoming vulnerabilities and development challenges efficiently and effectively in fragile and conflict-affected states. Lastly, the Korean government should conduct a fragility analysis and manage projects systematically.
Topic:
Development, Foreign Aid, Fragile States, and Donors
Political Geography:
Asia and Korea

5. Strategies for Development of Transport Infrastructure in North Korea for Unification and Beyond

Author:
Kwon Young-in, Na Hee Seung, and Kim Kyoung-Sik
Publication Date:
07-2017
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
It has been reported that passenger transport and logistics between regions in North Korea are very difficult due to deterioration and imperfect maintenance of transport infrastructure and limited investment in the facilities for several decades. If South Korea and North Korea are unified, massive investment in the development of transport infrastructure is inevitable. This investment would mainly be supported by South Korea as well as through cooperation with Multilateral Development Banks such as the World Bank Group (WBG), Asian Development Bank (ADB), and Asian Infrastructure Investment Bank (AIIB). In addition, special and efficient plans for transporting people and goods need to be established in case of reunification considering the current transport environment in North Korea. Thus, well-prepared strategies should be in place for short, mid, and long-term perspectives.
Topic:
Development, Infrastructure, Banks, and Peace
Political Geography:
Asia, South Korea, North Korea, and Korea

6. Where Are E-governments in South Asian Countries? A Comparative Approach

Author:
Jin-Wan Seo and Hasan Md Golam Mehedi
Publication Date:
07-2015
Content Type:
Journal Article
Journal:
South Asian Studies
Institution:
Department of Political Science, University of the Punjab
Abstract:
The four countries are selected and compared based on their use of e-government as a tool to work and share information more effectively while delivering better services to the public. It also provides a general understanding of e-government and uses different variables to discuss the reality of e-government development and e-participation over the last few years in these four countries. In view of this, the time series data are collected from the United Nations e-government survey to highlight developing trends in e-government along with issues and challenges, best practices, and opportunities for the development of egovernment. As a result, this study finds that real e-government remains a distant hope in these countries due to the expense of supplying technology, a lack of infrastructure, limited human capital and a weak private sector.
Topic:
Development, Science and Technology, Infrastructure, and Internet
Political Geography:
Pakistan, Bangladesh, South Asia, India, Asia, and Korea

7. Invisible legacies: Brazil's and South Korea's shift from ISI towards export strategies under authoritarian rule

Author:
Vinícius Rodrigues Vieira
Publication Date:
04-2014
Content Type:
Journal Article
Journal:
Journal of International Relations and Development
Institution:
Central and East European International Studies Association
Abstract:
Between the 1960s and the 1970s, Brazil and South Korea adopted similar strategies of development under authoritarian rule: an import substitution industrialisation (ISI) programme later replaced by export strategies (ES), namely, export promotion (EP) in Brazil and export-led growth (EG) in Korea. However, whereas Korea was successful, Brazil began the 1980s facing socio-economic crisis because of imbalances in external accounts. Through the analysis of institutions, organisations, and economic indicators, I conclude that the social-political structure (defined as the institutions and organisations within the economic, political, and social levels) of each nation shaped differently the opportunities given by changes in the organisation of the domestic economy and international contexts between 1945 and 1985. The social-political institutions, which last longer than organisations, come mainly from Portuguese (in the case of Brazil) and Japanese (in the case of South Korea) colonisation. Therefore, the impact of historical junctures, such as economic transformations influenced by changes at the international level, might be restricted to organisations at the domestic level as institutions related to pre-industrial periods persist and constrain the reach of modernisation.
Topic:
Development, Economics, and Politics
Political Geography:
South Korea, Brazil, and Korea

8. NATO in Afghanistan: Turning Retreat into Victory

Author:
Henrik Larsen
Publication Date:
12-2013
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
Afghanistan forced NATO to undergo a long adaptive process to be able to operate in an unprecedented and harsh strategic theater. It differed fundamentally from NATO's previous peacekeeping missions in the Balkans because the traditional division of labor between civilian and military efforts could not be maintained in practice. The UN state building agenda (Afghanistan Compact) tied NATO specifically to the security pillar throughout the country, which proved to be a gross underestimation of the actual resources required for such an effort. NATO contributors initially preferred a "light footprint" approach with a limited number of boots on the ground to avoid repeating the Soviet Union's negative experience. It proved inefficient, however, and warlords and power brokers did not demobilize and arbitrate disputes through Western-style elections and centralized institutions.
Topic:
Conflict Resolution, NATO, Development, and Peacekeeping
Political Geography:
Afghanistan and Korea

9. Performance of the Services Sector in Korea: An Empirical Investigation

Author:
Donghyun Park and Kwanho Shin
Publication Date:
10-2012
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
There is a widespread perception that Korea's services sector lags behind its dynamic world-class manufacturing sector. This paper empirically analyzes the past performance of Korea's services sector in order to assess its prospects as an engine of growth. The analysis resoundingly confirms the conventional wisdom of an underperforming service sector. In light of Korea's high income and development level, the poor performance of modern services is of particular concern. The authors identify a number of factors underlying the poor performance and set forth policy recommendations for addressing them. Overall, Korea faces a challenging but navigable road ahead in developing a high value-added services sector.
Topic:
Development, Economics, Emerging Markets, Industrial Policy, and International Trade and Finance
Political Geography:
Israel and Korea

10. The 'Right' Results: Making sure the results agenda remains committed to poverty reduction

Author:
Tariq Ahmad
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Oxfam Publishing
Abstract:
Donor governments are prioritizing aid 'results' in advance of the Fourth High Level Forum on Aid Effectiveness (HFL4) in Busan, Korea, due to take place at the end of 2011. But there is a real risk that their efforts will lead to a poorly designed results policy that could undo years of work to make aid more useful for fighting poverty.
Topic:
Development, Government, Poverty, and Foreign Aid
Political Geography:
Korea

11. China-Korea Relations

Author:
Scott Snyder and See-Won Byun
Publication Date:
01-2010
Content Type:
Journal Article
Journal:
Comparative Connections
Institution:
Center for Strategic and International Studies
Abstract:
The last quarter of 2009 raised hopes for developments in China's relations with both Koreas. Chinese Vice President Xi Jinping received head-of-state treatment during his mid-December visit to South Korea. In Seoul, Xi presented a series of proposals to further the China-ROK strategic cooperative partnership, including pressing for a free trade agreement. President Lee Myung-bak and Premier Wen Jiabao held bilateral talks on Oct. 10 in Beijing on the sidelines of the China-ROK-Japan trilateral summit, which Lee used to promote his “grand bargain” on North Korean denuclearization. There were also several exchanges between China and the DPRK. In early October, Premier Wen led a large delegation to Pyongyang and proposed a comprehensive set of deals with North Korea. As the first Chinese premier to visit Pyongyang in 18 years, Wen was warmly hosted by Kim Jong-il. Following Wen's visit, the director of the United Front Department of the Workers' Party of Korea (WPK) and Pyongyang's official in charge of inter-Korean relations, Kim Yang-gon, made a five-day trip to China. President Hu Jintao reportedly extended a formal invitation to Kim Jong-il to visit China “at a convenient time” at his meeting with Choe Thae-bok, secretary of the WPK Central Committee and one of Kim's closest aides, who led a WPK delegation to Beijing in late October.
Topic:
Development and Economics
Political Geography:
China and Korea

12. Indian FDI falls in global economic crisis: Indian multinationals tread cautiously

Author:
Jaya Prakash Pradhan
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Just over a year ago, outward foreign direct investment (OFDI) from India seemed to be on a path of rapid and sustained growth. Its annual average growth of 98% during 2004–07 had been unprecedented , much ahead of OFDI growth from other emerging markets like China (74%), Malaysia (70%), Russia (53%), and the Republic of Korea (51%), although from a much lower base. Much of this recent growth had been fuelled by large-scale overseas acquisitions, however, and it faltered when the global financial crisis that started in late 2007 made financing acquisitions harder.
Topic:
Development, Economics, Foreign Direct Investment, and Financial Crisis
Political Geography:
Russia, China, Malaysia, India, and Korea

13. Venture Capital Investment in the Greentech Industries: A Provocative Essay

Author:
Martin Kenney
Publication Date:
07-2009
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
In the first decade of the 21st Century there has been increasing awareness of environmental issues and recognition that these are now global in scope. This has occurred for many reasons and is perhaps best epitomized in the global warming discussion. The dramatic rise of China and India, in particular, has reoriented the debate about the sustainability of the current trajectory of fossil fuel usage and environmental degradation. Put quite simply, if the economic growth of China, initially, and then India were to follow the historical trajectory of fossil fuel energy usage and resource consumption that Japan, Taiwan, and Korea followed, the environmental impacts would be nothing short of monumental.
Topic:
Climate Change, Development, Energy Policy, and Environment
Political Geography:
China, India, Taiwan, and Korea

14. Criss-Crossing Globalization: Uphill Flows of Skill-Intensive Goods and Foreign Direct Investment

Author:
Arvind Subramanian and Aaditya Mattoo
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper documents an unusual and possibly significant phenomenon: the export of skills, embodied in goods, services or capital from poorer to richer countries. We first present a set of stylized facts. Using a measure which combines the sophistication of a country's exports with the average income level of destination countries, we show that the performance of a number of developing countries, notably China, Mexico and South Africa, matches that of much more advanced countries, such as Japan, Spain and USA. Creating a new combined dataset on FDI (covering greenfield investment as well as mergers and acquisitions) we show that flows of FDI to OECD countries from developing countries like Brazil, India, Malaysia and South Africa as a share of their GDP, are as large as flows from countries like Japan, Korea and the US. Then, taking the work of Hausmann et al (2007) as a point of departure, we suggest that it is not just the composition of exports but their destination that matters. In both cross-sectional and panel regressions, with a range of controls, we find that a measure of uphill flows of sophisticated goods is significantly associated with better growth performance. These results suggest the need for a deeper analysis of whether development benefits might derive not from deifying comparative advantage but from defying it.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
United States, Japan, Malaysia, India, South Africa, Brazil, Spain, and Korea

15. "MBnomics": A Review and the Road Ahead

Author:
Sung-Hee Jwa
Publication Date:
01-2009
Content Type:
Journal Article
Journal:
International Journal of Korean Studies
Institution:
International Council on Korean Studies
Abstract:
This paper reviews the first six months of MBnomics - its strengths, weaknesses, accomplishments and failures, along with suggestions for improvement. Throughout, the paper stresses the unevenness and lopsided nature of economic development which is viewed as the result of economic resources joining and concentrating towards competent, viable economic entities. Such an evolutionary process not only makes economic activity possible, but also leads to individual agents' and national economic development. After reviewing Korea's developmental experience over the past 4 decades, I argue that Korea needs to move away from the egalitarian policies of the past 15 years (the so-called “Egalitarian Trap”) by learning from the earlier decades of high growth and economic development when the flow of resources to economically competent agents and regions was encouraged under highly discriminatory policies. In the past 6 months, so-called MBnomics which intended to establish a regime of “big markets and small government” has clearly underperformed with respect to what was originally anticipated, often being misguided and inconsistent in various areas. This paper argues that economic policy remained in line with its original intentions and focused on instilling the developmental spirit of self-help, diligence, and cooperation throughout all aspects of society by putting into place discrimination policies that “help those that help themselves.” MBnomics must not shy away from the lopsidedness created by the development process and should promptly do away with those policies establishing equality at the expense of the economically viable agents.
Topic:
Development and Economics
Political Geography:
Korea

16. Why the Code of Conduct for Resolving Sovereign Debt Crises Falls Short

Author:
Barry Herman
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
The New School Graduate Program in International Affairs
Abstract:
The Institute of International Finance, a bankers group, has promoted its “Principles for Stable Capital Flows and Fair Debt Restructuring” as a code of conduct for debtor governments and their private creditors to avoid and if necessary resolve sovereign defaults. Although drafted with Brazil, Korea, Mexico and Turkey, I argue this purely voluntary code is excessively creditor friendly. Instead, a more balanced code should be developed in a broad, open and politically legitimate forum, and be coupled with an international disciplining mechanism that pushes creditors and debtor to a negotiated outcome under the code. A suggested approach concludes the paper.
Topic:
Development, Economics, International Trade and Finance, and Foreign Aid
Political Geography:
Turkey, Brazil, Korea, and Mexico

17. Korea: Progress in Implementing Regulatory Reform

Publication Date:
03-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Regulatory reform is a priority in the effort to promote sustainable economic growth, complementing sound macroeconomic policies. It can help shift economic activity to higher value-added production and services, encourage the use of appropriate and new technology and make national economies more resilient to economic shocks. Regulatory reform is a very important asset as countries move forward in the process of globalisation.
Topic:
Development, Economics, Globalization, and Science and Technology
Political Geography:
Korea

18. Regional Monetary Arrangements in ASEAN+3 as Insurance through Reserve Accumulation and Swaps

Author:
O.G. Dayaratna-Banda and John Whalley
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
East Asia is witnessing the emergence of an informal monetary system which focuses on self-insurance through own reserve accumulation and co-insurance through swaps. The former is concentrated in a small number of large countries (China, Japan, and Korea), while the latter involves informal monetary cooperation among monetary authorities in a large number of countries. The origins of this system lie in the Asian financial crises, and reflect concerns both to avoid repetition of similar events and any spread of further crises through contagion effects. This paper first characterizes and documents this emerging system describing how it works and what its objectives are, and then discusses its performance, its incompleteness, and assesses the system's ability to move towards deeper integration without adopting a single monetary authority as well as the impediments it faces. What is clear is that this type of system among individual countries is incomplete and falls well short of complete monetary integration, but at present it performs well even if it experiences a number of deficiencies. Most countries seem better off with partial reserve pooling, while incremental gains from higher degrees of pooling in the region tend to be small.
Topic:
Development, Economics, and Regional Cooperation
Political Geography:
Japan, China, Asia, and Korea

19. Asia: Towards Security Cooperation

Author:
Michael Vatikiotis
Publication Date:
02-2007
Content Type:
Working Paper
Institution:
International Peace Institute
Abstract:
Asia has enjoyed a remarkable climate of peace and security in the post-Cold War era. However, there is much that could have gone wrong. Tensions on the Korean peninsula, in the Taiwan Straits, between China and India, India and Pakistan – the hot spots and fault lines of tension are well known and warily watched. Rarely has serious conflict erupted, though. The last major 'conventional' conflict in Asia was the 1979 Soviet invasion of Afghanistan, though smaller wars have been fought between states in Kashmir and along the Chinese border with Vietnam. The region is also wracked by protracted internal disputes that generate sustained fears for internal security and destabilized inter-state relations. All the same, for a region that lacks the kind of sophisticated collective security arrangements that have kept the northern hemisphere at peace for the past sixty years, Asia's security environment is remarkably benign.
Topic:
Security, Development, and International Cooperation
Political Geography:
Pakistan, Afghanistan, China, India, Taiwan, Asia, Soviet Union, Vietnam, Kashmir, Korea, and Korean Peninsula

20. Exit Polls: Refugee Assessments of North Korea's Transition

Author:
Stephan Haggard, Marcus Noland, and Yoonok Chang
Publication Date:
12-2007
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Results from a survey of more than 1,300 North Korean refugees in China provide insight into changing economic conditions in North Korea. There is modest evidence of slightly more positive assessments among those who exited the country following the initiation of reforms in 2002. Education breeds skepticism; higher levels of education were associated with more negative perceptions of economic conditions and reform efforts. Other demographic markers such as gender or provincial origin are not robustly correlated with attitudes. Instead, personal experiences appear to be central: A significant number of the respondents were unaware of the humanitarian aid program and the ones who knew of it almost universally did not believe that they were beneficiaries. This group's evaluation of the regime, its intentions, and accomplishments is overwhelmingly negative—even more so than those of respondents who report having had experienced incarceration in political detention facilities—and attests to the powerful role that the famine experience continues to play in the political economy of the country.
Topic:
Development, Economics, and Politics
Political Geography:
China, North Korea, and Korea

21. OECD Territorial Reviews: Seoul, Korea

Publication Date:
04-2006
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
For many cities in OECD countries, globalisation has opened access to new markets, skilled human resources and advanced technology, while accelerating international competition and industrial restructuring. Seoul – a city of 10.3 million people at the core of a capital region of 22.5 million people, one of the world's most populous metropolitan regions – is striving to upgrade its position from that of a national mega-capital to become a “world city” and a leading business hub in Northeast Asia.
Topic:
Development, Economics, International Organization, and International Trade and Finance
Political Geography:
Korea, Northeast Asia, and Seoul

22. Pro-Poor Growth: The Asian Experience

Author:
Hyun H. Son and Nanak Kakwani
Publication Date:
06-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper looks into the interrelation between economic growth, inequality, and poverty. Using the notion of pro-poor growth, this study examines to what extent the poor benefit from economic growth. First, various approaches to defining and measuring pro-poor growth are scrutinized using a variety of criteria. It is argued that the satisfaction of a monotonicity axiom is a key criterion for measuring pro-poor growth. The monotonicity axiom sets out a condition that the proportional reduction in poverty is monotonically an increasing function of the pro-poor growth measure. This paper proposes a pro-poor growth measure that satisfies the monotonicity criterion. This measure is called the 'poverty equivalent growth rate', which takes into account both the magnitude of growth and how the benefits of the growth are distributed to the poor and the non-poor. As the new measure satisfies the criterion of monotonicity, it is indicative that to achieve a rapid poverty reduction, the poverty equivalent growth rate ought to be maximized rather than the actual growth rate. The methodology developed in the paper is then applied to Asian countries, including the Republic of Korea, Thailand, and Vietnam.
Topic:
Development, Economics, and Poverty
Political Geography:
Asia, Vietnam, Korea, and Thailand

23. Economic survey of Korea, 2004

Publication Date:
06-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Korea has been one of the fastest growing economies in the OECD area over the past five years, with an annual growth rate of about 6 per cent. Such rapid growth, which has lifted per capita income to two-thirds of the OECD average, reflects Korea's underlying dynamism and its progress in implementing a wide-ranging reform programme in the wake of the 1997 crisis. However, the recession in 2003 – which was due in part to structural problems in the labour market and in the corporate and financial sectors – indicates that the reform agenda is unfinished. Sustaining rapid growth over the medium term as the contribution from inputs of labour and capital slows requires further progress in structural reform, particularly in the labour market and in the corporate and financial sectors, accompanied by appropriate macroeconomic policies.
Topic:
Development, Economics, and Government
Political Geography:
Asia and Korea

24. Disorderly adjustments to exchange rate misalignments: The experience of Korea'

Author:
Takuji Kinkyo
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper analyzes Korea's exchange rate dynamics before and during the crisis of 1997-98 by estimating the long-run fundamental exchange rate and the associated error correction model. The analysis suggests that although Korea's exchange rate was substantially overvalued before the crisis, the subsequent exchange rate dynamics could not fully be accounted by the need to correct misalignments. It was found that there was a large deviation from the short-run fundamental value of exchange rates, indicating the presence of “overshooting of the overshooting equilibrium” during the crisis. The findings have important policy implications for crisis management in emerging market economies.
Topic:
International Relations, Development, Economics, and International Political Economy
Political Geography:
Korea

25. Transmission channels of capital flow shocks: why Korean crisis was so severe'

Author:
Takuji Kinkyo
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
The Asian crisis highlighted the vulnerability of emerging market economies faced by sudden capital flow reversals. An important question that has critical implications for crisis management is how negative shocks in capital inflows were transmitted to economic activities, transforming financial instability into fully-fledged crises. Using VARs, this paper analyzes the transmission mechanism of capital flow shocks during the Korean crisis of 1997-98. Although it is commonly believed that severe economic contractions were caused by credit crunch, the analysis suggests that the major constraint for production was a steep rise in prices of imported inputs due to sharp exchange rate depreciations.
Topic:
International Relations, Development, Economics, and International Political Economy
Political Geography:
Asia and Korea

26. Selective Intervention and Growth: The Case of Korea

Author:
Marcus Noland
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper attempts to determine whether conditions amenable to successful selective interventions to capture cross-industry externalities are likely to be fulfilled in practice. Three criteria are proposed for good candidates for industrial promotion: that they have strong interindustry links to the rest of the economy, that they lead the rest of the economy in a causal sense, and that they be characterized by a high s hare of industry-specific innovations in output growth. According to these criteria, likely candidates for successful intervention are identified in the Korean data. It is found that, with one exception, none of the sectors promoted by the heavy and chemical industry (HCI) policy fulfills all three criteria.
Topic:
Development and Economics
Political Geography:
Israel, East Asia, and Korea