South Korea

South Korea is the most typical example of developmental theory among the Asian Tigers, only next to the originator of the theory, Japan. Like Japan, it took various steps through industrial policies: identifying promising industries and corporations; providing support for the develop­ment of technology through government research institutes; providing various subsidies and tax incentives; judging the corporate successes/failures and rewarding the successful corporations by renewing subsidies and tax incentives.

South Korea is also one of the leading countries in the K-12 aptitude test, and its focus on technological education is very similar to Japan's. The government created a graduate school focusing on technology and science totally separate from the traditional school system: the Korea Advanced Institute of Science and Technology (KAIST). Later, they added undergraduate schools. Many of their graduates found jobs in chaebols such as Samsung and LG. The KAIST is ranked one of the top science and technology institutions in the world.

South Korea's industrial policies are prototypical industrial policies as discussed above. Yet, there are several differences between Japan and South Korea. First, the pilot agency of South Korea's industrial policies, the Economic Planning Board (EPB), was filled with US-trained economists, while Japanese MITI was filled with locally trained economists. Therefore, South Korea's industrial policies were slightly more market-oriented than the Japanese counterpart. Second, the South Korean industrial policies gave up coordinating among corporations in the process of acquiring advanced technologies, as rivalries among chaebols were too strong to allow collaboration. Although South Korea established the government-owned industrial research institute, the Korean Institute of Science and Technology (KIST) in 1966, it realised that the individual chaebols' laboratories could produce products much more efficiently.

The relations between Japan and South Korea are long-standing and complex. Japan colonised Korea from 1910 to 1945. The president of South Korea, Park Chung-Hee, was a member of the Japanese army and studied in the Imperial Japanese Army Academy. When Japan lost World War Two, he was a lieutenant in the Japanese Imperial Army. Also, many of the post-Korean War South Korean bureaucrats were from the Japanese colonial government. Furthermore, upon the conclusion of the Treaty on Basic Relations between Japan and the Republic of Korea in 1965, there has been economic cooperation between the two, including about 1.1 billion US dollars of aid. The similarities between South Korea and Japan are influenced by these historical relations.

The personal relations between the United States and South Korea are not as strong as the relations between Taiwan and the United States. Although Korean immigrants live in the United States, the connection between the expatriates and the indigenous Koreans is not as strong as in the case of Taiwan. Yet, due to the fact that the United States was the protector of South Korea after World War Two and the Korean War, the security relation is strong. Nonetheless, South Korea's economic development focusing on nurturing chaebols is much closer to the path ofJapan than that of the US free-market economy. The fact that the US protected South Korea's security interests, while at the same time allowing it significant freedom to diverge from the Western free-market economic model, is an interesting combination to end with.