Colonial Legacy and Development in East Asia: South Korea and Taiwan Reconsidered

Conventional wisdom attributes the post-war ascent of Taiwan and South Korea to the role of the “developmental state”. Specifically, the formation of the developmental state in both countries has been attributed to similar causes: post-war geopolitics; land reform; or even, by some, to distinct forms of Japanese colonial rule. A focus on external factors assumes the impetus of post-war East Asian development stems from the external big bang that shook up the existing social orders and molded two different societies into being alike.

Yet, advocates of this position have been unable to explain the different patterns of industrialization and economic organization in Taiwan and Korea despite similar external challenges. On the other hand, the literature that focuses on endogenous factors in bringing change tends to overlook the conjunctural forces and becomes ahistorical. This paper joins the debate through a reinterpretation of the origins of the post-war political economies of Taiwan and South Korea. While acknowledging the importance of conjunctural forces in shaping the direction of development, I argue that the existing social structure matters: its interaction with the state shapes and constrains state choices and thus can account for the variations in strategies.

I make three claims to explain the divergence between Taiwan and South Korea: First, I illustrate how different configuration of state-society relationships (the state-business relationship) responded differently to similar historical conjunctures. Secondly, I highlight the different responses from society and the dynamics of the state-society relationship in shaping industrial structures and industrialization patterns. The existing social structure played an important role in shaping and constraining state choices at the transition to industrialization. Thirdly, I illustrate how these historical events have helped to reinforce the established patterns of state-society relationship, (Korean state and large capitalists nexus versus Taiwanese state and numerous SMEs alliance), rather than flattening them out.