Consistent threat, political-economic institutions, and Northeast Asian developmentalism (Korea, Taiwan)

The purpose of this study is to explain the rise of developmental strategies and economic policies in Northeast Asia, which shaped its economic performance from the 1950s to 1990s. In particular, this study is interested in how the economic miracles of Taiwan and South Korea were created and what made their economic performance different in the 1990s (especially during the Asian financial crisis). The central argument is that a consistent external threat and political-economic institutions are the two fundamental forces that shaped the Northeast Asian economic performance.; Perceptions of an extremely intensive and long-term external threat, defined as consistent threat, gave rise to strong and centralized states in Taiwan and South Korea, and motivated those states to make consistent commitments to economic development, which in particular led to the development strategies promoting national economic independence in order to enhance national security in the long run. The emergence of such developmental states also gave rise to a state-dominated state-business relationship in both Taiwan and South Korea, which guaranteed the implementation of those strategies responsible for the economic miracles of Northeast Asia.; While the type of state-business relationship was similar in Taiwan and South Korea (i.e. the state dominated the state-business relationship), the form of this relationship was different from the beginning (i.e. the relationship was organized differently), due to different political-economic institutions between Taiwan's Kuomintang (KMT) state and Korean military state. As the external threat declined in the early 1980s, the type of state-business relationship began to change in both Taiwan and South Korea. However, different forms of state-business relationships led to distinct transformation processes of the relationship and to different state capacities to control the processes between Taiwan and South Korea in the 1980s and 1990s, which gave rise to economic policies shaping the economic performance of the two differently during the Asian financial crisis.; Taiwan is the main case in this study, while the main comparative case is South Korea. Other comparative cases include Meiji Japan, South Vietnam, Mexico of the early 20th century, and the Soviet Union during the 1920s and 30s. By comparing cases, I situate Northeast Asian developmentalism in an extreme position of the world of late capitalist development. While consistent conflict or a perception of low or short-term threat does not give rise to a developmental state, consistent threat is the key to keeping the states away from rent-seeking activity and making them commit themselves to long-term economic development. In fact, both the KMT and Korean states started their journey of economic development in a rent-seeking world of late capitalist development, and only in the 1960s and 70s did the consistent threat turn both states into developmental states. Since the external threat began to decline in the early 1980s, both Taiwan and South Korea have been returning to the normal world of late capitalist development, in which political-economic institutions become more and more important in shaping economic performance.