Grimes and Lee Publish Article Exploring Impact of South Korea’s Developmental Legacy

William Grimes, Professor of International Relations and Political Science at Boston University’s Frederick S. Pardee School of Global Studies, and Yaechan Lee, a Ph.D. student in Political Science at BU as well as a Pre-doctoral Research Fellow at the Global Development Policy Center‘s (GDP Center) Global Economic Governance Initiative, published an article in the Review of International Political Economy exploring the crisis responses of South Korea‘s public pension fund and how the country’s developmental legacy remains passively embedded in the governance structure of the pension fund.
The article, titled “Manifesting the embedded developmental state: the role of South Korea’s National Pension Service in managing financial crisis,” contributes to an ongoing debate about “developmentalist” economies in East Asia. Developmentalist economies – including Japan, South Korea, and Taiwan in particular – pursued a path to industrialization that emphasized significant state support for industrial development while also relying primarily on market competition to incentivize efficiency and innovation. Many of the tools and institutions used during the periods of rapid growth created dangerous economic distortions as these economies caught up with leading economies and opened up to globalization, prompting them to reduce the role of the state in finance and corporate decision-making. As a result, many scholars have argued that Japan and South Korea have been transformed from developmentalist to neoliberal economies.
Grimes and Lee’s article analyzes the behavior of the South Korean National Pension Service (NPS) during times of economic strain. The NPS was created during the developmentalist period to support state aims but has officially shifted its operations to focus on profit maximization. The paper shows, however, that in times of economic stress, the NPS has shifted its investments to support state objectives of financial stabilization rather than operate as a profit-maximizing financial institution. This demonstrates the ways in which developmentalist legacies live long after their official mandates have changed.
The full article can be read on the Review of International Political Economy’s website.
Professor William Grimes has taught at Boston University since 1996. He previously served as the Pardee School’s Dean for Academic Affairs, chair of the Department of International Relations, and the first director of the BU Center for the Study of Asia. He is the author of, amongst others, Currency and Contest in East Asia (2008) and Unmaking the Japanese Miracle (2001). Read more about Professor Grimes on his faculty profile.