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Taxes, outward orientation, and growth performance in Korea


  • Trela, Irene
  • Whalley, John


This paper uses an applied general equilibrium model to investigate the contribution of outward oriented policies to the earlier years of Korean growth, through induced intersectoral resource transfers and impacts on effort and labor supply in agriculture and manufacturing sectors. What seems to emerge from the model calculations is that one should look beyond tax policy for the main factors underlying strong Korean growth. Model calculations portray the tax component of outward oriented policies as accounting for 6.2 to 7.9 percent of Korean growth between 1962 and 1982, and only 6.7 percent between 1962 and 1972. This paper also emphasizes how, in Korea's extraordinary growth performance since the early 1960s, tax policy has been used in several different ways to meet economic objectives of the time.

Suggested Citation

  • Trela, Irene & Whalley, John, 1990. "Taxes, outward orientation, and growth performance in Korea," Policy Research Working Paper Series 519, The World Bank.
  • Handle: RePEc:wbk:wbrwps:519

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    References listed on IDEAS

    1. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1231-1294.
    2. Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
    3. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    4. Carolyn L. Evans & James Harrigan, 2005. "Distance, Time, and Specialization: Lean Retailing in General Equilibrium," American Economic Review, American Economic Association, vol. 95(1), pages 292-313, March.
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