What Made Korea's Rapid Growth Possible?

"Korea's experience of rapid economic growth represents both hope and challenge to many developing countries. The conventional wisdom inside and outside Korea has been that the government's policies such as export promotion, industrial targeting, etc. were the driving forces. This book investigates the effects of the policies and concludes that Korea's growth experience does not corroborate the view. Rather, it points to the world market growing tremendously in size as an important factor that has been overlooked in the discussion of nations' economic growth in the post-World War II era. It was roughly 100 times bigger in the early 1960s than it was in the middle of the First Industrial Revolution. The potential "gains from trade" were that much greater. The Korean economy had not been realizing the potential gains but began to as soon as a major reform of foreign exchange system in 1961 removed the impediments to foreign trade. Explosive export expansion and rapid growth of the economy immediately followed. The "Korean Miracle" may better be understood as a process whereby the economy realized the huge, unrealized potential it had had"--