In 1998, the Korean economy experienced the deepest recession since the Korean War. Within a year a number of smaller industrial conglomerates had failed. In this study, Graham examines the causes of this situation, tracing them back to the aggressive industrial policy begun by president Park Chung-hee during the late 1960s. He also analyzes reforms undertaken since 1997, concluding that they have not been entirely successful.

In 1998, the Korean economy experienced the deepest recession since the Korean War. Within a year a number of smaller industrial conglomerates had failed. In this study, Graham examines the causes of this situation, tracing them back to the aggressive industrial policy begun by president Park Chung-hee during the late 1960s. He also analyzes reforms undertaken since 1997, concluding that they have not been entirely successful.

After years of strong performance, Korea’s economy entered a crisis in 1997, owing largely to structural problems in its financial and corporate sectors. These problems emerged in the second half of that year, when the capital inflows that had helped finance Korea’s growth were reversed, as foreign investors—reeling from losses in other Southeast Asian economies—decided to reduce their exposure to Korea. This paper focuses on the sources of the crisis that originated in the financial sector, the measures taken to deal with it, and the evolution of key banking and financial variables in its aftermath.

Asian business conglomerates have clearly been successful agents of growth, mobilizing capital, borrowing technology from abroad and spearheading Asia's exports. However, these firms have long had a number of organisational and financial weaknesses, including heavy reliance on debt, that make them vulnerable to shocks. Nowhere was this more true than in Korea, where the large corporate groups known as chaebol have dominated the economic landscape. This collection of essays by leading political scientists and economists provides a comprehensive look at the chaebol problem in the wake of the Asian financial crisis. The authors consider the historical evolution of the chaebol and their contribution to the onset of economic turmoil in 1997. The book analyses the government's short-run response to corporate and financial distress, and outlines an agenda for longer-term reform of the financial system, corporate governance and the politics of business-government relations.

Sea-Jin Chang argues that the Korean financial crisis of 1997 was due to the inertia of both the business groups known as chaebols and the Korean government which prevented adaptation to changing external environments. Once the Korean government stopped central economic planning and pursued economic liberalization in the 1980s, the transition created a void under which neither the government nor markets could monitor chaebols' investment activities. The intricate web of cross-shareholding, debt guarantees, and vertical integration resulted in extensive cross-subsidization and kept chaebols from shedding unprofitable businesses. The government's continued interventions in banks' lending practices created 'moral hazards' for both chaebols and banks. This treatment demonstrates how the structure of chaebols later inhibited other adaptations and for all practical purposes became nearly dysfunctional. The book argues that restructuring of chaebols should focus on improving corporate governance systems. After such restructuring, the author predicts, chaebols will re-emerge as stronger, more focused global players.

South Korea is best-known for its economic development, democratic transition and consolidation, vibrant civil society, and emergence as a cultural powerhouse. The Oxford Handbook of South Korean Politics presents and analyses contemporary South Korean politics, bringing together domestic political, economic, social cultural, and demographic developments and putting them in the context of trends in fellow developed countries. The Handbook is divided into seven sections: introduction; core concepts; institutions, parties, elections, and voters; civil society; culture and media; public policy and policy-making; and the international arena. The overarching premise of the Handbook is that we have to move away from traditional understandings of South Korean politics that considered them to be static, focusing instead on how and why contemporary South Korea is a vibrant and dynamic democracy in which multiple groups and ideas are represented.