Economic Development During the Colonial Era

This chapter examines the economic transformations resulting from Korea's incorporation into the Japanese Empire’s regional integration system, with a focus on the pivotal role of Japanese capital inflows. The chapter analyzes the types and volumes of funds that flowed into and out of Korea during distinct phases of colonial rule. In the 1920s, the Rice Production Increase Plan drove significant policy funding, facilitating Korea’s rice export industrialization and shaping its broader industrial development. During the 1930s, a surge in private and policy capital further accelerated industrialization. However, the Second Sino–Japanese War and the 1940s brought intensified Japanese control, transforming Korea’s market economy into a short-lived controlled economy. Despite its brevity, this controlled economy left a profound impact on Korea’s post-liberation economic history.