ARTICLES

HOME location PUBLICATIONS location ARTICLES

Articles & Book Chapters

The Changing Dynamics of State-Business Relations and the Politics of Reform and Capture in South Korea(Review of International Political Economy, 2020)

Jong-sung You

Author
Jong-sung You(유종성)


Title 

The Changing Dynamics of State-Business Relations and the Politics of Reform and Capture in South Korea

(Review of International Political Economy, 2020)

Year
2020

Abstract

The Choi Soon-sil scandal, which led to the arrest of the de facto leader of Samsung Group Lee Jae-yong and the impeachment of President Park Geun-hye, exposed the ugly features of state capture in South Korea. Although the 19971998 financial crisis highlighted the problems of crony capitalism, it has been widely recognized that South Korea overcame the crisis by implementing far-reaching reforms of the chaebol’s corporate governance. This article explores why the post-crisis reform failed to end the practices of crony capitalism and why global companies like Samsung engaged in such corruption through a historical case study of Samsung Group. It highlights how increasing inequality and chaebol concentration have produced both popular pressures for institutional reform and incentives for chaebol to capture the policy-making process in the context of the changing statebusinesscivil society relations in the democratic post-developmental state era. I find that while the main objective of the chaebol’s bribery and lobbying of the government before the financial crisis was business expansion through the acquisition of low-interest loans and other government favors, it has changed to weakening or circumventing government regulations on corporate governance in order to achieve easier and cheaper dynastic successions of corporate control.



Key wordsChaebol; Samsung; capture; inequality; corporate governance; state–business relations; developmental state; South Korea