W12. Economic Development and Poverty Reduction in Korea: Governing Multifunctional Institutions/ Kim Seonghui

1. Summary

The history of Korea's economic growth was well organized. The author says Korea's case is worth noting, given that economic development does not necessarily reduce poverty or income inequality. Land reform has been controversy over whether it has a positive impact on development, but Korea's land reform is positively evaluated in that it has created farmers who own their own land to reduce inequality in land ownership. Poverty has been reduced through land reform and the educational level of the rural population has risen. These human resources have again become an important labor force. In order to effectively develop the nation, Park Chung-hee established an effective bureaucracy through a coup.

Korea's first compulsory welfare system was an industrial disaster insurance system. Workers with stable jobs (ex. civil servants, etc.) were the beneficiaries of the system. But gradually expanded to include workers with less stable jobs, such as farmers and unemployed people. In addition to this welfare system, there was a public support system. The system, however, was implemented on strict standards, leaving many of the poor unprofitable. Nevertheless, the nation's poverty rate is said to have dropped sharply. The reason is not due to the direct consequences of these public support systems but to the indirect effects of high economic growth.

To reduce poverty, the government has decided to reduce dependents only to the extent that the state can afford them, and actively utilize public health facilities. This facility has helped both population control and epidemic prevention.

After the Korean War, the government took the lead in vocational training to raise human resources and gave preferential treatment to large corporations that could make large sums of money by using large amounts of capital. But this strategy has made income and asset distribution unequal.

The Korean government introduced the minimal social policy, but it was able to effectively reduce poverty in successive stages by mobilizing various institutions and policies to carry out social policy functions such as poverty reduction.

 

2. New/Interesting

It was written in order of history, so I could read it interestingly. I have learned anew what historical context the national health insurance, industrial accident insurance system, which I was taking for granted now, emerged and the number of welfare recipients expanded. In addition, I found that these welfare systems were not given for granted, but emerged from various interests, such as to gain political power.

 

3. Discussion

It is true that the Park Chung-hee administration has greatly improved Korea's economic growth. However, support from large corporations among his policies is still making it difficult for small and medium-sized enterprises to grow. How do we address these social problems, such as the widening inequality gap caused by the policies of that time?