Japanese Institutions in Korea: Imitation, Evolution, and Response to Crisis
AbstractJapan has been slow in carrying out economic reforms that many astute observers of the Japanese political economy believe are needed but have been blocked due to the opposition by powerful interest groups. In contrast, South Korea undertook speedy economic reforms soon after the 1997-98 crisis. The difference in reform experience between the two countries may be due to the fact that, in comparison with Korea, Japan is a rich country and is suffering from an economic malaise, not a severe economic crisis. This paper argues that there is an additional, rather critical, factor that accounts for the difference: it is that for a country to change its institutions it, at least those advocating the change, must have a model of institutions that they and the society at large can accept as superior to the extant institutions. It argues that Japan has yet to find such a model whereas Korea has had one since the early 1980s. Japan is now in a paradigmatic crisis, a crisis in the beliefs held by many Japanese about their own political-economic system, and is in need of finding an alternative paradigm that the people can accepta process that inevitably takes a long time. By contrast, in Koreaeven before the crisis of 1997-98, there was a strong move to establish a liberal economic order and the crisis served as a catalyst for reform.
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Bibliographic InfoPaper provided by The European Institute of Japanese Studies in its series EIJS Working Paper Series with number 204.
Length: 136 pages
Date of creation: 01 Sep 2004
Date of revision:
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Postal: The European Institute of Japanese Studies, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
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Japan; institutional change; Korea; economic reform; banking crisis; paradigmatic crisis; political economy;
Find related papers by JEL classification:
- N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
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