Dirigiste Modernization, Coalition Politics, and Financial Policy Towards Small Business : Korea, Japan, and Taiwan Compared

Title
Dirigiste Modernization, Coalition Politics, and Financial Policy Towards Small Business : Korea, Japan, and Taiwan Compared
Authors
Park, Hun-Joo
Issue Date
1999
Series/Report no.
KDI Working Paper Series;99-06
Abstract
This paper investigates the political origins of striking variations in financial policy toward small business in Korea, Japan, and Taiwan. All three had credit-based and priceadministered financial systems; yet these similarly structured systems were wielded differently to produce widely divergent industrial structures. The paper argues that economic policy in East Asia is best explained not by the technocratic preferences of an elite bureaucracy or by the bottom-up pressures of organized interests, but by political exigencies and choices of the ruling coalition, as defined both by the competition for state power among various elite policy factions and by the winning political coalition's consequent task in building paternalistic authority in the eyes of the society. Thus main policy changes occurred abruptly, within the same continuing governing party or elite group, and as a strategic decision. Understanding such dirigiste pattern of policymaking is important because the stickiness of statist institutions and policy legacies constrains and molds, for better or worse, how the dynamics of coalition politics shape modernization in these nations, no matter how strong the homogenizing globalization forces may be.
URI
http://archives.kdischool.ac.kr/handle/11125/16849
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