Download pdf - 782 Presentation

7/25/2019 782 Presentation

1/21

A tale of 2

Countries


2/21

ComparativeDevelopmental Mode

South Korea and Argentina


3/21

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


4/21

Measures of Development

&D' per Capita


5/21

(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)


6/21

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


7/21

'olitical >conomy

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

?and eforms

>ducation


8/21

(ave you heard of@,


9/21


10/21

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


11/21

)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


12/21

)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


13/21

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


14/21

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


15/21

?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


16/21

>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


17/21

nderlying Di"erences

Strong State vs


18/21

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


19/21

?and lords

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


20/21

&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


21/21

Conclusions