“A Novel Solution or Mimicry? A Korean Model of Financial Liberalization”

Date: 

Thursday, November 17, 2016, 4:30pm

Location: 

Thomas Chan-Soo Kang Room (S050), CGIS South Building, 1730 Cambridge Street

Kim Koo Forum on Korea Current Affairs


Myung-koo Kang

Assistant Professor, Department of Political Science, Baruch College, City University of New York

Professor Myung-koo Kang teaches political economy and Asian affairs at Baruch College, City University of New York, from the fall of 2012. He was born in South Korea and studied international relations at Seoul National University, and received his doctoral degree from the University of California, Berkeley, in 2006. He worked as a post-doctoral fellow at the Walter Shorenstein Asia Pacific Research Center at Stanford University from 2006 to 2008, then taught at Claremont McKenna College from 2008 to 2012. He was affiliated to the Ministry of Finance, Japan, from 2003 to 2004, for his doctoral research on Japan’s banking problem in comparison with Korea’s financial reforms, and conducted research on the diffusion of Western financial system to the colonial Korea through the Imperial Japan by being affiliated to the Institute for Advanced Study as a visitor from January to August of 2011.

Chaired by Carter J. Eckert, Yoon Se Young Professor of Korean History, Harvard University

Abstract
Who initiated the financial liberalization in South Korea and why? This talk will explore why and how the financial liberalization was adopted as a development strategy for the post catch-up industrialization stage from the early 1990s by focusing on the formation of an isomorphic economic policymaking structure, which is primarily composed of U.S.-trained economists in high ranking government positions, government-sponsored economic institutes, chaebols, and academia. It will highlight how the U.S.-trained Korean economists played an influential role in the process of the national agenda-setting for neoliberal economic reforms in general, and financial liberalization in particular. As a case, the talk will review the process of foreign exchange liberalization, pursued since the late 1980s and then precipitated after the Asian financial crisis of 1997-98 in the name of building a “financial hub” of East Asia in South Korea. It will explain how the dynamic mix of rigid hierarchy with informal social networks in the economic decision-making process led to a “collectively neglecting” situation in which involved actors do not “voice” their alternative views while not “exiting” the existing policy networks. By observing institutional as well as social characteristics of a policy reform process in South Korea, this talk aims to provide a theoretical framework to understand the diffusion mechanism of ideas and policies to developing countries and how those emulated foreign ideas and policies are legitimized in the local socio-political environment.

The Korea Institute acknowledges the generous support of the Kim Koo Foundation.