Friday, December 2, 2005

A brief history of Korea's "East Asian" economic model (Part II)

Since 1961 Korea adopted the "east asian model" from Japan. The government took control of all economic activities in order to achieve state-set national development goals. What industries and technologies would receive priority, allocation of capital and investment by powerful Korean conglomerates (chaebol 財閥) were all set by the government. Most importantly there was no free flow of money into and out of Korea.

Under this model Korea became one of the 4 miracle economies. Cambridge University economist Ajit singh called the model "the most successful economic development model in the history of the world".

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