James Robinson: "How South Korea Achieved Economic Growth Despite Confucian Culture, Authoritarian Regime, and Chaebols"

Reasons Behind Korea's Economic Growth, According to a Nobel Laureate
"Former President Park Chung-hee: An Authoritarian Obsessed with Economic Development"
"Growth Accelerated as South Korea Democratized Politically"
"Family-Owned Conglomerates and Confucian Order... Effective in Managing Capitalist Upheaval"

James Robinson, professor at the University of Chicago and last year's Nobel laureate in economics, stated on August 19 that South Korea's rapid economic growth under an authoritarian regime, Confucian culture, and family-owned conglomerate structure is an exceptional phenomenon that is difficult to explain using conventional economic theories. He pointed out that although South Korea was politically authoritarian, it adopted inclusive economic institutions, and that Confucian order actually helped effectively manage the chaos of introducing capitalism.

James Robinson, professor at the University of Chicago, USA (left), is attending the World Economists Conference (ESWC) held at COEX in Gangnam-gu, Seoul on the 19th, having a discussion with Nathan Nunn, professor at the University of British Columbia, Canada. Photo by Kim Hyemin

Professor Robinson made these remarks during a discussion with Nathan Nunn, professor at the University of British Columbia in Canada, at the World Economists Conference (ESWC) held at COEX in Gangnam-gu, Seoul, on the afternoon of August 19. Robinson is a scholar who studies the relationship between economic development and political and cultural institutions and is regarded as an authority in institutional economics. He authored the 2012 book "Why Nations Fail."

Professor Robinson explained, "North Korea has extractive economic and political institutions, whereas South Korea is relatively inclusive," emphasizing that the economic gap between the two Koreas stems from institutional differences. He added, "It is interesting that initial economic growth occurred even under an authoritarian regime. Politically, it was extractive, but former President Park Chung-hee was entirely obsessed with economic development for personal reasons. South Korea was fortunate in that regard."

According to existing social science research, it is generally difficult for an economy to develop significantly under an authoritarian political regime. However, because former President Park concentrated his dictatorial power on economic growth for personal reasons, he adopted many inclusive economic institutions, resulting in an exceptional case of economic success. Professor Robinson explained, "Without inclusive political institutions, it is impossible to sustain an inclusive economy. South Korea eventually democratized politically, and although its growth was already rapid, economic growth accelerated even further after democratization."

He also evaluated that the land reform carried out by the Syngman Rhee administration in the 1950s strengthened South Korea's social mobility. Professor Robinson said, "Confiscating and redistributing land from Japanese landlords laid the foundation for inclusiveness," and "on this basis, South Korea achieved tremendous social mobility and expanded opportunities." Using the example of Hyundai Group founder Chung Ju-yung, he added, "He came from a poor farming family and received almost no education, but achieved remarkable upward mobility. This is the result of inclusive institutions."

Regarding South Korea's Confucian culture, Professor Robinson said, "Confucian society may not have been adept at generating capital, but once someone invents capitalism, the orderly nature of Confucianism may be a much better way to deal with chaotic situations." He added, "The economic development experiences of East Asia, including South Korea, show that there can be alternative paths to success."

He reiterated this perspective by comparing South Korea's family-owned conglomerates with cases in Africa.

He said, "East Asian culture shares many similarities with Africa, such as ancestor worship and an emphasis on family. Max Weber believed that such traditions would prevent the development of capitalism, but he was ultimately wrong." He pointed out, "The conventional wisdom in economics is that family-centered corporate systems are always less productive, but there are cases like South Korea's conglomerates where they actually worked well."

Professor Robinson highlighted Nigeria as a country likely to achieve significant development over the next 20 to 30 years. He said, "If I had to pick a country that could grow by 10% annually over the next decade, it would be Nigeria." He continued, "Nigeria has tremendous energy, entrepreneurial spirit, and a lot of talent, but these are currently being used in the wrong direction. However, there are countries like China that were able to develop their economies by knowing when to push forward, even without solving all institutional problems."

Professor Robinson noted, "By 2050, Nigeria will become the third most populous country in the world. According to UN projections, by 2100, 40% of the world's population will be African. If this 40% does not prosper, how can the world prosper?"