Transition from a Limited Access Order to an Open Access Order : The Case of South Korea

This paper attempts to explain both the economic and the political development of South Korea applying the limited and open access orders framework proposed by North, Weingast, and Wallis (2009). During the second half of the 20th century South Korea transformed itself from a poor nation to a rich and democratic country. It has moved far along the transition from a limited access order to an open access order. The role of land reform in opening access to economic opportunities and establishing state monopoly of violence was critical to later economic and political development. The land reform also contributed to expanding education and establishing meritocratic and autonomous bureaucracy. The relatively open access economy not only brought about rapid and sustained economic growth but also created increasing pressures for open access polity, which led to democratic transition of 1987. Although export-led industrialization helped to increase open access and competition in the economy, economic concentration by the chaebols and collusion between government and the chaebols increasingly limited access and competition. Sweeping economic reforms after the 1997 financial crisis helped Korea to make transition to an open access order. The Korean case suggests that the doorstep conditions may not work the same way in today’s developing countries as they did in the historical experiences of Western Europe and North America. Whereas in Western Europe and North America the rule of law was established for elites first and expanded to broader population over time, it developed at the same time for both elites and non-elites in Korea