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Growth Policy and Inequality in Developing Asia: Lesson from Korea

Author

Listed:
  • Hyun-Hoon LEE

    (Department of International Trade and Business, Kangwon National University)

  • Minsoo LEE

    (Economics and Research Department, Asian Development Bank (ADB))

  • Donghyun PARK

    (Economics and Research Department, Asian Development Bank (ADB))

Abstract

While developing Asia has traditionally prioritized growth over equality, recent years have witnessed a growing popular demand for more inclusive growth in the region. In this connection, Korea, which has managed to combine rapid economic growth and moderate inequality levels, offers potentially valuable lessons for developing Asia. The central objective of our paper is to analyze the relationship between growth policy and inequality in Korea in order to identify relevant policy implications for developing Asia. According to our analysis, the one policy that stands out as a driver of both rapid economic growth and more equal income distribution is large and systematic investments in public education. The broader positive lesson from the Korean experience is that growth and inequality do not necessarily go hand in hand, and government policy can make a difference.

Suggested Citation

  • Hyun-Hoon LEE & Minsoo LEE & Donghyun PARK, 2012. "Growth Policy and Inequality in Developing Asia: Lesson from Korea," Working Papers DP-2012-12, Economic Research Institute for ASEAN and East Asia (ERIA).
  • Handle: RePEc:era:wpaper:dp-2012-12
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    Cited by:

    1. Kross, Karmo, 2013. "Developmental welfare capitalism in East Asia with a special emphasis on South Korea," Discourses in Social Market Economy 2013-05, OrdnungsPolitisches Portal (OPO).
    2. repec:mth:ber888:v:7:y:2017:i:2:p:375-391 is not listed on IDEAS

    More about this item

    Keywords

    Growth; growth policy; inequality; Asia; Korea;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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