782 Presentation

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    A tale of 2

    Countries

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    ComparativeDevelopmental Mode

    South Korea and Argentina

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    Summary

    Show that South Korea has succeeded much moArgentina in development since 195

    Analy!e their similarity and di"erences A di"erent outloo#

    policy di"erences

    underlying di"erences

    Show the policy di"erences and how they e$plaidiscrepancy in development

    Draw lessons for today%s developing countries

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    Measures of Development

    &D' per Capita

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    (uman Development )nde$

    y19*+ y199+ y2+++ y2++5 y2++* y2+1+ y2+11 y2+,+++

    +,1++

    +,2++

    +,++

    +,-++

    +,5++

    +,.++

    +,/++

    +,*++

    +,9++

    1,+++

    (uman Development )nde$

    Argentina (D) Korea 0epulic of3 (D)

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    Similar (istories

    4oth underwent alternative periods of dictatorshuasi6democracy7 South Korea under 'ar# ChungArgentina under 8uan 'eron and 8orge idela

    4oth started o" as relatively undeveloped countthe post6war era

    4oth pursued super:cially similar economic policstate driven industriali!ation

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    'olitical >conomy

    Key area of di"erence in policy )ndustriali!ation

    ?and eforms

    >ducation

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    (ave you heard [email protected],

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    Di"erent utloo#

    Argentina; populist outloo# 'andering to laor unions7 i,e the average Argentinian

    day o" for every 2 day of wor# in the late 19-+s

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    )ndustriali!ation

    4oth tried to use import sustitution industriali!athe 195+s

    Brom the 19.+s7 South Korea started to use >$industriali!ation

    Among other things this allowed South Korea to avoid

    crisis as in Argentinaoo# advantage of ooming 19.+s world economy wh

    there%s a igger mar#et for their goods

    4etter access to S mar#ets ecause of cold war

    Argentinaonly started doing this in the 19/+s

    4ut due to gloal economic crisis was far less success

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    )ndustriali!ation 0cont,3

    South Korea; Bocusing on laor intensive indusduring initial phase of growth; te$tiles7 toys etc

    )ncrease employment; salaries goes towards greproportion of the population

    4etter usage of factor endowments; plentiful la

    of capital Argentina; Bocused on Capital intensive industr

    Steel

    >ven though Argentina lac#s capital7 s#ipped ovElowerF levels of industrial development

    esulted in Chronic lac# of eGciencyHmoney losi

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    Conseuences

    4y the 19*+s7 Argentinawas devoting 25I of its e&J' to susidi!ing losses of state owned industries

    &rowing inaility to service det and otain new on

    (eavy ination7 reaching 17+++I at one point7 fueleconomic instaility

    Ball in real income y 2+I etween 19/5 and 199+ Borced to accept )MB structural readLustment progra

    neolieral reforms

    Argentine :nancial crisisHdefault in 2++17 continuouination; 2+I per year today

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    Conseuences 0cont,3

    South Korea on the other hand7 was ale tosigni:cantly reduce6 its dets load due to oome$ports in the 19*+s7 i,e reduce it%s det to &D'2+I etween 19* and 19*/

    Continuous growth in wealth

    ?ow rates of ination 02I6-I3 and stalemacroeconomic conditions

    More money to go into social services and improliving standards

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    ?and eforms

    )n 19-56-97 mass sei!ure of land from landlords South Korea7 over *+I of the country%s farmlaredistriuted to peasant farmers

    )n Argentinathere were no signi:cant land refo

    ?and ownership y peasants increased their inco

    thus reduced poverty in the South Korean case ?and owning peasants tend to e more productiv

    tenant farmers per acre

    4rea#s up the power of agrarian landlords7 who have vested interests against industriali!ation

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    >ducation

    South Korea devoted a large share of its &D' teducation7 i,e primary and secondary

    Argentina7 while similarly focused on educationtendency of eing Etop6heavyF etc7 focusing on fniversities; -/I of its pulic education udget university

    Creates situation li#e the fact that there are dofor every nurse in Argentina

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    nderlying Di"erences

    Strong State vs

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    State strength

    South Korea inherited a state from 2 historicallegacies; the Confucian ureaucracy7 and the 8apcolonial administration

    4oth of which lends itself to strong7 centrali!ed swith institutions capale of carrying out policies reforms

    Argentinacame from the )erian tradition ofdecentrali!ed7 wea# state7 which has trouleimplementing its policies

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    ?and lords

    he power of the landowning class in South Koe"ectively ro#en y

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    &eopolitics

    4ecause of its pro$imately to Communist powersSouth Korea received signi:cant economic aid the S

    At one point7 the S provided 5+I of the entire Korean udget

    Allowed South Korea unfettered access to S maeven while South Korea #ept high tari" walls

    Argentinadid not receive similar preferentialtreatment

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    Conclusions