Harvard East Asian Monographs, 362. Cambridge, MA: Harvard University Asia Center; Harvard University Press [distributor], 2013. xi, 218 pp. (Figures, tables.) US$39.95, cloth. ISBN 978-0-674-72674-1.
In this fascinating and engaging book, the authors, Jongryn Mo and Barry Weingast, seek to explain the transitional process of Korean political and economic development by utilizing main concepts such as limited access order, open access order and double balance. This book offers a new perspective on the development by shedding light on the problem of violence. The authors argue that even Max Weber, not to mention theorists backed by standard economic approaches, tends to ignore the effect of violence on the process of development. Many theorists are under the wrong assumption that the state naturally has monopoly on violence. But the reality is much closer to the fact that the satisfaction of the Weberian monopoly of violence is fulfilled at the ending stage of the development process. Thus, previous development studies, whether they attend to the problem of violence or not, cannot offer a comprehensive explanation on the origins of the state and its role in developing countries, where monopoly of violence is understood as a given rather than something that can be formed in a process.
Based upon this insight, the authors divide social orders into limited access and open access order. In the limited access order, where violence potential is distributed and the state’s monopoly on violence does not hold practice, the problem of violence is solved through limited access to rights, privileges, and organization in politics, economics, and society. The limited access and privileges given to specific groups with potential for violence tend to motivate them into cooperation while also deterring them from violence through the provision of valuable rents. That is, in the limited access order, rents and privileges solve the problem of distributive violence. On the other hand, the open access order is a social order where the problem of violence is completely eradicated, fostering competition and impersonal exchange with the widely accessible form of rights and rule of law. They are critical components in achieving economic and political development.
It is important to note that the transitional process from limited access to open access order may be explained by the mechanism of double balance. A stable society demonstrates a balance between economic and political openness. An imbalance between these ignites a natural tendency to seek equilibrium. A higher degree of political openness relative to economic openness may lead either to increased economic openness or reduced political openness. Conversely, too much economic openness in relation to political openness could lead to either greater political openness or to a reaction that limits economic openness.
This reexamination of the theoretical framework and concepts is immensely important in correctly analyzing the Korean development process. Among late-developed countries, the development of South Korea is viewed as a successful case demonstrating a process of transformation from a limited access to an open access order. The authors detail three significant turning points experienced in South Korea. First, Korea’s authoritarian government, which took power during the 1961 military coup, expanded economic access and gave big business groups, known as chaebol, excessive privileges and rents as a way of arranging the problem of violence. However, direct opposition to the limited access order, by both the persistent communists and the threatening Americans holding the power to withdraw economic and political support, led to Korea’s decision to provide political officials with incentives to trade off short-term rents for long-term economic growth. Second, with this tradeoff, economic growth accompanied by political repression gave rise to an imbalance between economic and political openness. Thus, together with democratization in 1987, the second turning point, the political openness had to be heightened to provide balance. However, at the time, a newly introduced democracy had changed the outlook on incentives for political officials; that is, in order to win an election, politicians sought out campaign funds usually offered by the chaebol and this cozy relationship between politicians and conglomerates debased the government’s ability to monitor and discipline the chaebol. In the end, the failure to accomplish double balance and open access order triggered the financial crisis of 1997. Third, the financial crisis in 1997 was critical to the progress towards an open access order both economically and politically, setting off a series of economic and political reforms. However, whether these reforms have succeeded in creating a stable double balance or were sufficient to counterbalance the chaebol remains to be discussed.
During the 1960s and 1970s, modernization or political development theory struggled to identify general grounds for political development, but failed to explain diverging paths of development in the real world. Since the 1980s, many researchers have focused their research on East Asian development. For instance, the economist approach implemented by the World Bank succeeded in uncovering policies that enabled long-term economic growth in East Asia. The developmental state study was advantageous in explaining why and how political officials in East Asia could choose and sustain those policies. However, previous studies did not provide any insight to the transitional dynamics behind the development process. This book by Mo and Weingast is exceptional in that it provides valuable complexity to this discussion, explaining how the transitional process from limited access to open access order was able to take place and why the dominant coalition had incentives to successfully introduce open access order incrementally in South Korea.
Although the argument is appealing and persuasive, there still remain unclear points that may need development. As shown in the Korean case, the single most important factor to explain development seems to rest on whether a country can effectively sacrifice short-term natural rents to seek out long-term economic gains. But the theoretical framework of this book implies that the provision of rents and privileges is central to overcoming the problem of violence and open access order is fundamentally free from this issue. It still remains unclear whether a developing country should provide rents and privileges to the groups with potential for violence or whether it should bypass this stage for the sake of economic development. Despite this weakness, however, this book with its timely and profound analysis must be included as essential reading for researchers who are interested either in the development issue in general or in the Korean case in particular.
Hyun-Chin Lim
Seoul National University, Seoul, South Korea