The Birth of a Welfare State in Korea: The Unfinished Symphony of Democratization and Globalization

Abstract

Globalization pressured a rebirth of the state in Korea, but in an unexpected direction. Whereas the welfare state retrenched in Western Europe under pressures of the borderless global economy, the Korean state reinvented itself into the guardian of public welfare. That regime shift occurred when the “Asian crisis” struck in 1997 to end the developmental state's way of growth. Previously, the state channeled subsidized bank loans to the chaebol firms (monopolistic conglomerates in strategic industries) and the chaebol company welfare to its workforce in order to secure industrial peace in strategic growth sectors. This de facto class bargain, partly forced by the developmental state and chaebol firms and partly prodded by organized labor, crumbled with the Asian crisis. No longer too big to fail, the chaebol firms plunged into downsizing and restructuring in order to raise profitability, thus precipitating a profound social crisis. The rules and norms of lifetime employment and promotion by seniority gestated during Park Chung Hee's authoritarian rule (1961–1979), and labor's acquiescence—if not consent—to the chaebol-led hypergrowth strategy collapsed as the crisis damaged a third of Korea's top thirty business conglomerates in 1997 and 1998.

Concern about the rise of lazy welfare queens? An empirical explanation of the underdevelopment of the redistributive welfare system in South Korea

“…The so-called "can-do" spirit of self-help pervaded society in the 1960s and 1970s (Song, 2003). Non-working benefits conflicted with this can-do spirit and were considered to encourage laziness and a "society of lazy fellows" (Park, 1979).…”

Does history repeat itself? Economic development and policy convergence in Vietnam and South Korea

“…In Korea, despite the impressive economic growth record achieved by the authoritarian developmental state during military rule, the process of government‐directed development generated economic, social, and political inequalities that led to increased resistance to the political order from labour and students, and later by a broader coalition of citizens that culminated in democratisation (Kim ; Song ). The ending of military rule and the re‐establishment of the general presidential election system in 1987 signalled the formal start of political democratisation.…”

The Dynamics of Welfare Policy-Making in South Korea: Social Movements as Policy Entrepreneurs*

“…One of the reasons for this could be found in the single presidential term (5 years) that possibly convinced the president to attempt to accomplish many comprehensive reforms while in office (Kwon & Reich, 2005). All in all, the magnitude and speed of change in social policy were far greater during the period 1998–2000 than during the previous four decades of developmentalism (Song, 2003). Another consequence of the economic crisis was the heightened public awareness of South Korean society about the relevance of social safety nets.…”