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The Evolution of South Korea's Rural Institutions: The Political Economy of Export Promotion and Market Protection

Published online by Cambridge University Press:  24 March 2016

Extract

South Korea's economic takeoff in the 1960s triggered a scholarly debate over the causes behind its economic growth. Neoclassical economists and “statist” scholars focused on government policies toward the industrial sector, but as this article shows, they have neglected to consider the political economy behind the government's targeting of the agricultural and livestock sectors for export promotion. In fact, the South Korean government's support of export-led growth—aimed at the rural sector as well as industry—transformed the nation's agricultural and livestock institutions from instruments of development and export promotion into protectionist mechanisms. This article discusses how complete market liberalization would have resulted in more efficient resource allocation and reveals how political considerations affected the institutional arrangement in the South Korean countryside and the subsequent liberalization of agricultural and beef markets.

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References

Notes

I would like to thank Stephan Haggard and an anonymous reviewer for their helpful comments on an earlier draft. Of course, I am responsible for any and all errors in this article.Google Scholar

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24. KREI, Han-gug nongjeong 40nyeon-sa II, pp. 121122.Google Scholar

25. The dairy industry, which was ransacked in the aftermath of liberation from the Japanese, declined even further under the First Republic. Dairy cattle stocks had dropped to 860 head by 1960, and South Korea had become dependent on foreign aid for imported powdered milk. The Ten-Year Dairy Promotion Plan used aid and loans to import dairy cattle so that the nation could develop a dairy products industry. Other objectives of the plan were to expand idle land into pasture, increase employment in the countryside, increase the amount of manure for use as fertilizer, and increase the dietary protein intake for citizens. See KREI, Han-gug nongjeong 40nyeon-sa I, pp. 874877.Google Scholar

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32. “Su-chul jeungdae-e bun-bal” [Exerting Effort to Increase Exports], Nonghyeob-sin-mun , December 6, 1965.Google Scholar

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34. NLCF, Chug-hyeob 10nyeon-sa , p. 884.Google Scholar

35. In 1965 the Korean government completed negotiations to normalize diplomatic relations with Japan. Opposition to the treaty was widespread, but Korean leaders insisted it was necessary for economic development. “Bag-dae-tonglyeong yeon-du-gyo-seo: jeungsan-su-chul geonseol jeon-lyeog, 10nyeon-nae geun-dae-hwa-i-lug” [President Park's Annual Address: Complete Devotion to Increasing Production-Exporting-Construction; Achieving Modernization Within 10 Years], Nonghyeob-sin-mun , January 24, 1966.Google Scholar

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37. Special cooperatives included things such as livestock, beekeeping, and silk. NACF, Nonghyeob 30nyeon-sa , p. 665.Google Scholar

38. The First Five-Year Economic Plan expired at the end of 1966, and the second plan began in January 1967.Google Scholar

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40. “Chug-san yug-seongchaeg-deung ganggu: bag-dae-tonglyeong ji-si pil-yo-su-geub-bun yeo-yu-issge [Livestock Promotion Policies Considered: President Park's Instructions; Marginal Adaptability in the Supply and Demand of Fertilizer],” Nonghyeob-sin-mun , October 24, 1966. Park's directives also included a plan for the supply and demand of fertilizer, a proposal to increase sweet potato consumption, and the establishment of special production zones in rural areas. Park had to be seriously concerned about economic performance and income in the rural sector, as the presidential election was approaching. And since economic growth in the countryside had been lagging in 1966, Park was in danger of losing the rural vote, which was crucial for his reelection in 1967.Google Scholar

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42. Ibid. Google Scholar

43. ROK National Assembly, Dae-han-min-gug-gug-hoe 50nyeon-sa , p. 374. (Emphasis added.) Google Scholar

44. Gyeongje-gi-hoeg-won (Economic Planning Board), Gae-bal-yeon-dae-ui gyeongje-jeongchaeg: gyeongje-gi-hoeg-won 30nyeon-sa [The Economic Policies of the Development Era: A 30 Year History of the Economic Planning Board] (Seoul: EPB, 1994), pp. 358359.Google Scholar

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47. “Bag-dae-tonglyeong chi-sa: nongchon geun-dae-hwa eobs-i jo-gug-geun-dae-hwa eobsda [The Nation Cannot Modernize Without Rural Modernization],” Nonghyeob-sin-mun , February 27, 1967.Google Scholar

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54. The meeting included cabinet ministers, provincial governors, and the chairmen of the NACF, the National Fisheries Cooperatives Federation, the Office of National Fisheries Administration, the Office of Rural Development, and the Office of Forestry. See “Nongmin-so-deug-jeungdae-e jeon-lyeog [All-Out Effort to Increase Farm and Fishery Income],” Nonghyeob-sin-mun , July 24, 1967; and “Bag-dae-tonglyeong yu-sin [President Park's Instructions],” Nonghyeob-sin-mun, July 24, 1967.Google Scholar

55. The Agricultural and Fishery Development Corporation was founded in December 1967. The public corporation at one time had twenty-three subsidiaries including Korea Cold Storage, which would later become a distributor of imported beef during liberalization in the 1990s. See KREI, Han-gug-nongjeong 40nyeon-sa I, p. 36.Google Scholar

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57. See Hwan, Ban Sung, et al., Rural Development , pp. 2431.Google Scholar

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