Consolidating Democracy in South Korea 9781626373150

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Consolidating Democracy in South Korea

Consolidating Democracy in South Korea EDITED BY

LARRY DIAMOND BYUNG-KOOK KIM

b o u l d e r l o n d o n

Published in the United States of America in 2000 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 www.rienner.com and in the United Kingdom by Lynne Rienner Publishers, Inc. 3 Henrietta Street, Covent Garden, London WC2E 8LU © 2000 by Lynne Rienner Publishers, Inc. All rights reserved Library of Congress Cataloging-in-Publication Data Consolidating democracy in South Korea / edited by Larry Diamond and Byung-Kook Kim. p. cm. Includes bibliographical references and index. ISBN 1-55587-848-2 (alk. paper) 1. Democracy—Korea (South) 2. Korea (South)—Politics and government—1988– I. Diamond, Larry Jay. II. Kim, Byung-Kook. JQ1729.A15C65 2000 320.95195—dc21 99-089664 CIP British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. Printed and bound in the United States of America

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The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1984. 5 4 3 2 1

Contents

Acknowledgments 1

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3

4

5

6

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Introduction: Consolidating Democracy in South Korea Larry Diamond and Byung-Kook Kim

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South Korean Democratic Consolidation in Comparative Perspective Hyug Baeg Im

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Party Politics in South Korea’s Democracy: The Crisis of Success Byung-Kook Kim

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Civil Society and Democratic Consolidation in South Korea: Great Achievements and Remaining Problems Kyoung-Ryung Seong

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Labor Against Itself: Structural Dilemmas of State Monism Byung-Kook Kim and Hyun-Chin Lim

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Democracy and Economic Performance in South Korea Chung-in Moon and Song-min Kim

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Electoral Politics and Economic Crisis, 1997–1998 Byung-Kook Kim

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CONTENTS

Continuing Democratic Reform: The Unfinished Symphony David I. Steinberg

The Contributors Index About the Book

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239 243 253

Acknowledgments

This book began in June 1996 with a conference at Korea University on “Consolidating Democracy in South Korea,” cosponsored by the Ilmin International Relations Institute of Korea University and the International Forum for Democratic Studies of the National Endowment for Democracy. Since that conference the project has evolved and grown, with the addition of Chapters 5, 6, and 7 and substantial revisions. We would like to thank the sponsors of the conference for their support of the project; the director of the Ilmin Institute, SungJoo Han, for his personal interest and inspiration; the president of the National Endowment for Democracy, Carl Gershman; the codirector (with Larry Diamond) of the International Forum for Democratic Studies, Marc F. Plattner; and the many Korean scholars in addition to the contributors who have enriched our project with their comments and suggestions. Final work on this book was completed during 1999 while Larry Diamond was a POSCO visiting fellow at the East-West Center in Honolulu and Byung-Kook Kim was a visiting scholar at the Weatherhead Center for International Affairs at Harvard University. We gratefully acknowledge the support of those institutions, as well as the ongoing support of the Hoover Institution, its director, John Raisian, and its associate director, Thomas Henriksen. The Editors

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1 Introduction: Consolidating Democracy in South Korea Larry Diamond and Byung-Kook Kim

Among over sixty countries that have undertaken transitions to democracy since the third wave of global democratization began in 1974, the Republic of Korea (South Korea) represents one of the most important and instructive cases. With the eleventh-largest economy in the world, a number of huge business conglomerates with extensive foreign investments, an enterprising and highly educated workforce, and a strategic location in between two world powers, China and Japan, South Korea has international significance that looms increasingly large. With North Korea sinking deeper and deeper into famine, economic crisis, and political disarray while seeking offensive missile capabilities that threaten Japan (and eventually the United States), the significance of a stable, vigorous, and democratic South Korea is further accentuated, and a reunified and ultimately much more powerful Korea looms as a plausible prospect in the next decade. The more stable and institutionalized South Korea’s democracy, the better it would be able to manage what would be—under even the most benign scenario—an enormously stressful and perilous process of reunification. The more vigorous, effective, and broadly legitimate South Korea’s democracy, the weaker are the culturalist arguments that liberal, multiparty competitive institutions do not fit with “Asian values.” South Korea enters the twenty-first century with a twelve-yearold democracy that has weathered the crucial tests of a major economic crisis and alternation of national power from the ruling party to a lifelong opponent of authoritarian rule who was nearly put to death by the military. It enjoys a level of democratic vitality and stability that is without precedent in its history and in the broader 1

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history of Confucian societies. Yet even if South Korea’s democracy can be considered in some minimal way “consolidated” (a point on which the contributors to this volume disagree), its political institutions remain shallow and immature, unable to structure a meaningful choice of policy courses and to provide the responsiveness, accountability, and transparency expected by the South Korean public. For a country that must undertake fundamental reforms in order to rekindle economic growth and secure broad political legitimacy, these political problems have far-reaching consequences. To be sure, South Korea’s political system has undergone a profound transformation since electoral democracy was installed in 1987, after more than two and a half decades of authoritarian rule dominated by the military. In June 1987, Roh Tae Woo, the ruling party’s presidential candidate, relieved a dangerous stalemate between the authoritarian regime and democratic opposition when he promised to bring about a system of direct, fair presidential elections. There followed a succession of events that radically reshaped political power structures. The “Great Workers’ Struggle” erupted a month later (in July 1987), disrupting industrial peace and exposing for the first time the structural power of labor built during the previous decades of rapid economic growth. The two-decade-long struggle against authoritarian rule drew to a close with the holding of a free and fair presidential election in December 1987, and a new phase of conflict over building and reforming democratic institutions was launched. With the establishment of hearing committees on the Kwangju massacre of 1980 and the illicit activities of Chun Doo Hwan’s Fifth Republic (1980–1987) in the opposition-led National Assembly of 1988, the military lost its historical political clout and was forced to return to the barracks. After five years of political mobilization and constant turbulence in the party system, one-time opposition leader Kim Young Sam won the presidency in December 1992 on the ticket of a renamed and enlarged ruling party (the Democratic Liberal Party) into which he had brought his opposition party. Kim was the first truly civilian leader to head a South Korean government since 1961, and he had pledged extensive reforms to deepen democracy and improve accountability. His presidency was marked by significant reforms and institutional changes, new controversies over corruption and money politics, continued fermentation in both party politics and civil society, and finally a traumatic financial crisis and economic collapse.1 The end of Kim’s presidential term in December 1997 marked a decade since the transition to democracy in South Korea. In Central and Southern Europe, some third wave democracies

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achieved democratic consolidation within a decade of their birth. Could this be said of South Korea? How stable and effective is South Korea’s democracy? What are the obstacles to its improvement and deepening? This volume seeks to answer these questions by analyzing the political, social, cultural, and economic changes—and continuities— in the Republic of Korea. It assesses the extent of democratic institutional and behavioral change in South Korea and the effects of democratization on civil society and the economy. What has been achieved since popular mobilization pressed the military to accept free and direct presidential elections in 1987? Has the institution of free, fair, and competitive elections opened new channels of political participation and citizen influence? Has it generated more effective responses to the economic and social problems confronting the country? Has it transformed the underlying culture in a way that makes for more open, meaningful, and coherent representation of diverse interests? Has democracy become consolidated: are democratic elections and constitutional processes “the only game in town” for resolving conflicts over power and policy? Among all politically significant elites and organizations as well as the mass public, to what extent is there a manifest and widespread consensus that democracy is the best form of government for the society and an unconditional commitment to its specific rules and constitutional practices?2 How has the onset of electoral politics affected the regime’s economic performance and its capacity to cope with the economic crisis that has gripped the country since late 1997? Beyond assessing the first dozen years of South Korea’s new democracy, we also look to the future of democracy in that country. What are the key challenges for consolidating and improving democracy in South Korea? What are the principal obstacles—in the political culture, social structure, and political institutions and practices—to transforming electoral democracy into a more responsive, pluralistic, accountable, and liberal democracy? Compared to other historical cases, to what extent does South Korea possess the factors that facilitate the consolidation and deepening of electoral democracy?

THE CONCEPTUAL CHALLENGE: IS SOUTH KOREA’S DEMOCRACY “CONSOLIDATED”? To analyze and appraise the state of democratization is a difficult task. In fact, much of the appraisal depends on what concept of democracy one has chosen to analyze because “reality” looks different

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to those who have different notions of democracy. The chapters in this volume reflect the ongoing debate in scholarly circles over what constitutes democracy and when it can be said to have taken root as a fully consolidated regime. In Chapter 2, Hyug Baeg Im takes a “maximalist” position. For Im, democracy encompasses much more than elections, and democratic consolidation involves the establishment of a responsive, accountable civilian political regime that has full control over the military, guarantees basic civil rights, and presides over a Tocquevillian social democratization as well. Among our authors, Byung-Kook Kim takes the opposite position in Chapter 3. He accepts the “minimalist” definition of democracy set forth by Joseph Schumpeter, which sees the holding of fair, free, and competitive elections on a regular basis as the essence of democracy. From this perspective, democratic consolidation involves the institutionalization and legitimation of a democratic, constitutional electoral process. Responsiveness and accountability are dimensions of democratic performance that may be improved as a result of democratic consolidation, but they are not necessarily a prerequisite for it. How one defines the concept of democracy has direct bearing on whether one perceives a particular regime of electoral politics to be a consolidated democracy at a particular juncture in time. Depending on the definition of democracy, the threshold of consolidation is raised or lowered. Taking the minimalist position, for example, Byung-Kook Kim interprets the December 1995 prosecution of the former military rulers on the charges of military mutiny, national sabotage, and political corruption as a significant indication of democratic consolidation because it proceeded constitutionally without any apparent threat of a military backlash. In contrast, for Im, whose broader conception of democracy includes responsiveness and accountability, consolidation is an ongoing process in South Korea that faces formidable obstacles yet also benefits from a peculiar combination of facilitating factors. In his chapter on civil society, Kyoung-Ryung Seong adds a third perspective, distinguishing between consolidation at a general normative level and consolidation at the level of specific institutions. There is, he maintains (and our other contributors explicitly or implicitly agree), no regime alternative to democracy in South Korea today. At a very general normative level, democracy appears consolidated. However, to the extent that consolidation also involves agreement on specific institutional arrangements, it is still incomplete, as a result of several factors that he and other contributors analyze: regional cleavages, the extreme institutional weakness of political parties, the highly personalistic and concentrated (“delegative”) nature of political and especially presidential power, and the frailties of civil society.

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Despite these differences over how to conceptualize democracy and democratic consolidation, the reader will find substantial agreement among the contributors to this book about the present state of South Korean politics. All our authors, including Byung-Kook Kim, agree that the present regime of electoral politics, for various reasons, has failed to become a responsive, accountable, and effective democracy. All of them express concern about the quality, depth, and cultural rootedness of democracy in South Korea. To the extent that democratic consolidation is seen to require widespread, robust legitimacy among the mass public, recent public opinion survey data reinforce a skeptical interpretation of South Korea’s progress. At a general level, most South Koreans support the transition from authoritarian rule to the democratic Sixth Republic. In 1996, the percentage in favor was 84 percent, with 56 percent strongly in support, and that support has since remained high.3 South Koreans also overwhelmingly express support in principle for the “idea of democracy.” Even in the sour public mood surrounding the economic crisis (as measured in October 1998), 85 percent supported democracy in principle, and only 7 percent were against it.4 South Koreans do not want a return to military rule (85 percent reject that), nor do they favor abolishing parliament and having a “strong leader decide everything” (74 percent reject that).5 However, mass public support for democracy declines sharply— particularly in the wake of the November 1997 financial collapse— when it is tested more concretely against exceptional circumstances. When asked in January 1996 whether democracy is always preferable to dictatorship, 65 percent said yes (as opposed to dictatorship sometimes being preferable, or it makes no difference).6 In response to this same question in October 1998, only 54 percent said “democracy is preferable to any other kind of government.” Almost a third of respondents now claimed that “under certain situations, a dictatorship is preferable.”7 Even in 1996, support for democracy was further diminished when respondents were asked to agree or disagree that “for our country these days, a strong leader is needed more than democracy”; 53 percent agreed with that authoritarian sentiment, whereas only 41 percent disagreed.8 In 1998, 44 percent backed an even more authoritarian sentiment, saying they would prefer “rule by a dictator like Park Chung Hee” rather than a “democratically elected president” (51 percent) to “sort out the economic problems facing the country.” The public was similarly divided over the prospect of suspending parliament (44 percent approving to 48 percent disapproving) and abolishing political parties (40 percent approving to 51 percent disapproving) in order “to repair our economy.”9 Moreover, reinforcing the interpretation of several of our

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contributors that democracy in South Korea is highly personalistic and delegative in nature (see below), fully 71 percent of South Koreans agree with the statement that “in a crisis situation like we are in now, the president should not confine himself within the bounds of law in pursuing public policy.”10 Taken together, these responses (and others we could cite) portray a mass public that is ambivalent, conflicted, and somewhat superficial in its support for constitutional democracy, rather than firmly and unconditionally committed, as a more encompassing theory of democratic consolidation demands. Indeed, based on a 1996 survey, Doh C. Shin finds that the largest category of South Koreans who endorse the installation of democracy are merely “superficial supporters,” whereas only 16 percent of South Koreans are “fully committed supporters.”11 Although support for democracy and other democratic normative orientations is positively associated with education and no doubt affected by deeper cultural and historical legacies that will change only slowly, it appears that the quality of democratic functioning also has a significant impact on democratic legitimacy among the mass public.12 This underscores the salience of two of our dominant themes in this book, the weakness of South Korea’s institutions for articulating, structuring, aggregating, and representing competing interests, and the weakness of elite normative and behavioral commitment to such democratic norms as tolerance, compromise, transparency, and accountability.

COMPARATIVE PERSPECTIVES As critical as the conceptual definition of democracy in the appraisal of the current state and future prospect of politics in South Korea is the object of implicit or explicit comparison. Our contributors freely select different historical cases with which to compare the experience of South Korea, and their choices have influenced in subtle ways their appraisal of the South Korean case. Adopting a more or less procedural concept of democracy and then treating South Korea after 1993 as a consolidated democracy facing the challenge of “improvement,” Byung-Kook Kim chooses in Chapter 3 the modern party politics of Western Europe as the standard by which the state of South Korean politics is “measured” and its limitations appraised. However, in Chapter 2 Hyug Baeg Im contrasts South Korea with recent Latin American and Eastern European cases of third wave democratization, whereas in Chapter 4 Kyoung-Ryung

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Seong puts the South Korean case against the historical experience of Western Europe since the late 1970s. Each provides a different angle on the story of democratic change in South Korea. Kim uses the modern Western European paradigm of party politics, best exemplified in the work of Seymour Martin Lipset and Stein Rokkan, to argue (ironically) that political development in South Korea has followed and will continue to follow a path different from those of Western European countries. Influenced by the modernization literature, Seong finds in the case of South Korea a variant of universal trends, especially the rise of civic (as opposed to group or class) associations; he thus treats South Korea as a reflection of wider postindustrial changes. Finally, Im analyzes the South Korean case within the comparative context of Latin American and East European third wave (post-1974) democracies in order to identify the factors that hinder or facilitate democratic consolidation. Both the comparative frame of reference and the underlying theoretical perspective on democracy shape how each author assesses South Korea’s democratic experience and challenges. For example, in sharp contrast to the evolution of political cleavages in Western Europe, the irrelevance of religion and the illegitimacy of class as a mode of political language and discourse in the anthropocentric Confucian cultural milieu of South Korea are seen by Kim to deprive South Korean politics of any concrete socioeconomic bases upon which to organize parties. As a result, political parties have enormous difficulty generating distinctive visions for South Korea’s future, organizing mass followings around them, and securing mass participation. Because they limit political polarization, these same factors are seen by Im as “supportive conditions” for democratic consolidation (and a distinct advantage for South Korea in comparison with some third wave democracies in Latin America and elsewhere). For those who are impressed by how the conflicts over religion and class have given birth to the modern political discourse of liberty and equality in Western Europe (as Kim is in Chapter 3), the anthropocentric Confucian familism of South Korea is judged to hinder the improvement of democracy, depriving it of a political discourse that can aggregate competing societal demands and interests into coherent programs with clear priorities, consistent logic, and concrete socioeconomic bases. For others (like Im) struck by the difficulties that class, ethnic, and religious cleavages pose for the consolidation of new democracies, anthropocentric Confucian culture is an asset for democratic stability.

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CONDITIONS FOR DEMOCRATIC CONSOLIDATION Despite their underlying conceptual distinctions concerning democracy and consolidation, and their different comparative frames of reference, the chapters in this volume are complementary, answering questions implicitly or explicitly raised and addressing analytical and empirical gaps left in other chapters. In Chapter 2, Im offers a comprehensive inventory of both supportive factors and structural obstacles to democratic consolidation in South Korea. As supportive factors, Im identifies the historical dynamism of South Korea’s economy, which relieved political elites of the burden of having to undertake a double transition to democracy and the market economy; ethnic homogeneity and religious tolerance, which prevent the eruption of polarizing primordial conflicts; the tradition of cultural syncretism, which allows the South Korean people to flexibly absorb, assimilate, and adapt Western ideas of democracy and capitalism; an effective state, which provides a foundation for reasonably effective performance in both economic and sociopolitical arenas; and the establishment of civilian control over the military under the presidency of Kim Young Sam (1993–1998). The obstacles to democratic consolidation also abound. Im sees the low institutionalization of political society as having generated in South Korea a “delegative democracy,” in which the president, once elected, acts free of constraints and transforms sovereign voters into a passive political audience. 13 This is also an explicit concern for Seong in Chapter 4 and an implicit one for Chung-in Moon and Song-min Kim in Chapter 6, as well as for David Steinberg in Chapter 8. Virtually all our contributors see the highly personalistic nature of power in South Korea, the weakness of horizontal accountability (exercised, for example, by the legislature and the judiciary), and the shallow commitment to democratic proceduralism and the rule of law as serious problems for the quality, if not the stability, of South Korean democracy. Along with this, Im views the absence of “constitutionalism” as obstructing the internalization, habituation, and routinization—that is, the institutionalization—of the values and norms of the constitutional regime, encouraging political elites to try to change the rules of the constitutional game as a way of dealing with political conflicts. For Im, another impediment to consolidation is the underdevelopment of civil society, which is partly a product, he believes, of the strategic failures committed by the forces of democracy. They have wrongly engaged in a Gramscian “war of movement” (against the overall sociopolitical order), when the situation called for turning to

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a “war of position” (for specific, more incremental institutional changes) after the transition to electoral democracy. It also stems from the mode of democratic transition, intrinsically conservative in nature due to the survival of the heirs to the (military-dominated) Fifth Republic as a major element in the new ruling coalition, which left intact many of the socioeconomic policies, industrial relations, and institutions of the previous authoritarian era, further impeding democratization. Im goes on to identify the delay of welfare democracy, economic globalization (with its increasing autonomy of capital and infringement on national sovereignty), external security vulnerability, and the economic crisis that began in November 1997 as other factors that limit democratization. Weighing both the facilitating and obstructing factors, he concludes that South Korea is advantaged relative to many new democracies of Latin America, Africa, and the postcommunist world because it is free of the issues of nation building and state building.

POLITICAL CULTURE AND POLITICAL INSTITUTIONS One of the major recurrent themes in this book concerns the complex interplay among political culture, political institutions, and political behavior in South Korea. Our authors agree that from the standpoint of democratic quality and effectiveness, political behavior leaves much to be desired, at both the elite and mass levels. The weaknesses in the practice of democracy in South Korea, however, must be understood in light of the institutional and cultural factors that give rise to them. And institutions and culture, in turn, shape and reinforce one another. This dense interaction between institutional weakness and culture is the central concern of Byung-Kook Kim in Chapter 3, where he examines South Korea’s political party system. Kim asks why South Korea’s political society has failed to develop mechanisms of interest aggregation (in particular, political parties) despite its successful consolidation of electoral (as opposed to a more vibrant and pluralistic) democracy by the early 1990s. He searches for answers from three different angles: Confucian culture, South Koreans’ procedural concept of democracy, and the transformation of the countryside and of its political relationship with the city. For Kim, it cannot be assumed that electoral democracy, once consolidated as the only game in town, will develop into a more responsive, effective, pluralistic democracy. 14 He also argues that in the case of South

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Korea, the actual relationship between the two stages of political development is the reverse of what one would expect from the literature on democratization: those factors that facilitated the deep and wide legitimation of electoral democracy are the same factors that have obstructed the institutionalization of party politics and its transformation into a pillar of a more mature, responsive democracy. First, the anthropocentric familism of Confucian culture, having undergone subtle changes in content after the tragic experience of the Korean War (1950–1953), facilitated the consolidation of electoral democracy by banishing from politics both religion and class ideology, which often generate intense political conflicts and polarizing, destabilizing mass mobilization. However, as noted above, the same cultural condition hindered the construction of a deeper, more responsive, accountable, and pluralistic democracy. The irrelevance of religion and class in party politics deprived South Korea of political discourses that could aggregate diverse societal demands and interests into coherent programs, with clear priorities and consistent internal logic, and that could endow individual citizens with a keener sense of political liberty and civil rights. From such a cultural condition arose the institutional chaos and volatility of party politics after 1987. Bereft of any substantive issues with which to craft coherent organizations and durable political coalitions, South Korean political parties have fallen back on regional and personal loyalties to mobilize support, and parties have come and gone with the personalities around which they formed. In Chapter 7 Byung-Kook Kim shows that all these weaknesses of personalism, regionalism, volatility, and ineffective engagement with policy issues plagued the 1997 presidential election campaign. With a whole new roster of political parties contesting, regional loyalties and grievances and personal images and betrayals once again dominated the campaign and shaped the choices of voters. Party platforms were “a mere formality,” and both parties and candidates evaded difficult choices on the pressing economic issues. Key regional and personal factors were the alliance of two regional titans and longtime foes, Kim Dae Jung of Cholla and Kim Jong Pil of Chungchong; the third-party candidacy of Rhee In Jae, which split off the ruling party’s traditional base in South Kyongsang Province; and the loss of moral stature suffered by ruling party candidate Lee Hoi Chang when it was charged that his son had evaded the military draft. In Kim’s view, the 1997 election also revealed the growing force of moralism in South Korean politics, as voters—sick of corruption, bossism, and money politics—look for fresh, clean faces, and shift their support quickly back and forth as these personal images rise

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and fall. These ills of South Korean politics, Kim shows, have also undermined the institutional effectiveness of the National Assembly, which is given to intense, opportunistic partisan bickering but lacks the stability and structure of more programmatically committed, issue-oriented political parties. The institutional vacuum in party politics particularly inhibits the construction of a sustainable coalition for political reform and policy innovation. It fosters both hierarchical money politics and public thirst for a moral rejuvenation of politics, and the clash between the two feeds a growing cynicism. A second reason that Kim advances (in Chapter 3) for the institutional shallowness of South Korean political parties has to do with the way South Koreans understand the concept of democracy. Forced into a severe crisis of national survival since 1948 and raised in a distinctive cultural milieu of Confucianism, South Korea developed its own rhetoric of democracy, which made free elections a practical as well as a moral imperative. Although reduced mainly to a procedural notion of free, fair, and competitive elections, the concept of democracy threw authoritarian state elites into a perpetual crisis of legitimacy while allowing dissidents and activists to build loyal followings in civil society and a broad, albeit loosely organized, coalition against authoritarianism. In fact, such broad coalition building was possible precisely because democracy was essentially a procedural notion. Not divided by different substantive ideas of democracy, major dissident and activist groups could readily agree on goals, strategies, and tactics of political struggle and maintain a united front against the authoritarian rulers. Once South Korea institutionalized a system of direct presidential election in 1987 and restored civilian supremacy five years later, however, the same factor that eased South Korea’s transition toward electoral politics became a cause of institutional disarray. Once democracy— understood as a regime of free and fair elections—was realized, South Korea lost a sense of political direction. The third causal factor, the rural-urban “gap” or cleavage, underwent a similar change in role. Before 1987 authoritarian state elites mobilized the countryside to check the more contentious city at the polls. But Kim sees two changes that have fundamentally altered the political role of the countryside. Three decades of rapid industrial transformation essentially erased the distinctive cultural and political identity of the rural sector, making it more difficult for political elites outside the countryside to mobilize it electorally. In addition, the emergence of an economy dependent on the export of manufactured goods, coupled with the consolidation of electoral democracy, discouraged politicians from politicizing rural-urban

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conflict over economic interests and from cultivating an image of a rural-based political party because either tack would collide headon with both economic and political imperatives. As a result, it fell upon the rural sector to organize itself for collective action. However, South Korea’s small farmers—structurally atomized by the land reforms enacted between 1948 and 1950—were too weak and fragmented to organize themselves politically. As a result of these changes and the political weakness of the rural community, the countryside was ignored by national political elites after 1987. This removed another potential source of political cleavage. The South Korean party system was spared an Argentine-style clash of culture and interest between rural and urban dwellers that might have polarized politics and impeded the consolidation of electoral democracy. But again, this benefit came with a price, robbing the party system of yet another basis of substantive, programmatic cleavage. Thus, with religion, class, and rural-urban cleavage all neutralized, political parties in South Korea lacked any of the social bases that had organized political party competition in Western democracies. The resulting extreme volatility and inchoate quality of the South Korean party system signifies its striking lack of progress toward institutionalization15 and underscores the theoretical axiom that too little coherent cleavage can, in its own way, be just as damaging for democracy as too much.16 In the concluding chapter, David Steinberg recognizes the significant progress that has been made in institutionalizing electoral competition and terminating the political influence of the military, as well as the vibrancy of civil society. Nevertheless, he sees a number of structural and behavioral impediments to the further development of democracy in South Korea, all deriving from the way power is conceptualized in South Korean culture. He argues that power is regarded as a finite good in South Korea, to be personally possessed or lost by individuals, and that such a conceptualization, permeating all areas of life in South Korea—the everyday operation of the family-controlled industrial conglomerates (chaebol), academic and civic organizations of civil society, state bureaucracies, political parties, even the South Korean language itself—and reinforced by the strongly hierarchical nature of South Korean culture, undercuts efforts to deepen and expand the spirit of democracy. Steinberg sees South Korean political parties as mere personal instruments of leaders and their entourages to retain or acquire power. From this perspective, the system is driven by “a marriage, albeit sometimes stormy, between the state and the business conglomerates . . . with

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much of the media as maids of honor,” partly based on the “institution” of corruption. This hierarchical pattern, Steinberg argues, appears in a wide range of other political institutions. Law in South Korea is “a method of control rather than an independent arbiter of rights.” Political activities of dissidents, labor activists, teachers, and other civil servants (and human rights more generally) remain constrained despite recent efforts to amend and restrict the scope of the National Security Law. Local governments remain dependent on the central political authority for funding and lack independent sources of power. The labor sector is still heavily influenced and constrained by the state, which tries to limit wage increases with the aim of strengthening the overall macroeconomic competitiveness of South Korea’s economy. Steinberg sees in all these factors the working of the traditional (finite, personal) concept of power, which transforms politics into a zero-sum game and encourages all actors to strive for control. Further obstructing democratic reforms are the cultural tendency to search for orthodoxy in both behavior and in thought, which is judged to obstruct the free exchange of ideas and encourage conformity rather than diversity of opinions, and regionalism, based both on Confucian culture and the socioeconomic and political mechanisms of discrimination and favoritism, which inhibits the systematic articulation of a national agenda and social interests on the basis of such national cleavages as religion and class.

CIVIL SOCIETY In Chapter 4, Kyoung-Ryung Seong analyzes the role of civil society both as an independent and a dependent variable of democratic consolidation after 1987. He argues that the density, scope, and level of organization of civil society have become stronger, both vertically and horizontally, since South Korea embarked on the consolidation of electoral democracy after June 1987. Moreover, the role of civil society has qualitatively changed from restraining authoritarian state power to reforming state policies. Seong traces the origin of this “resurrection” of civil society to the democratic transition, which created a free and safe public space in which social actors could experiment with new forms of organization at sectoral and national levels, cultivate group consciousness, and formulate their own agenda to influence state policies. In particular, he sees civic organizations or new social movements, whose leaders share a common

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middle-class background as well as an intimate network of social ties with the press, as having established moral, social, and political hegemony over the more traditional, sectoral interest associations such as labor unions, while the repressive “state corporatist system” of interest intermediation has gradually disintegrated. Civil society has gradually changed its role from a more or less passive beneficiary of the transition to an active force for democratic consolidation. In Seong’s view, the change brought about by democratic transition was visible in both the inner workings of civil society and its relationship to political society. Social groups, old and new, dissident as well as “official,” increasingly practice and spread the norm of “committee democracy,” in which the members rather than the leaders jointly decide on the policy of the group. They have also acted as a source of leadership recruitment for both political parties and the government, allowing the presidencies of Kim Young Sam and Kim Dae Jung to formulate and implement reform measures with strong support from civil society. Nevertheless, Seong is careful to emphasize the limits of achievements, noting the problems of institutional shallowness, regionalism, bossism, and delegative democracy discussed above. Moreover, to realize its potential for deepening democracy, South Korea’s civil society must address its own internal weaknesses: the thinness of its active membership base; its weakness at the local level; and its internal divisions, particularly between civic organizations and interest associations. In Seong’s view, the failure of societal forces to establish horizontal networks across their specific issue concerns and their tendency to turn to the state to mediate their interest conflicts undermines their capacity to influence major issues and to project alternative leadership. Here we find agreement as well as disagreement among Im, Kim, and Seong. All three perceive South Korea’s civil society to be internally fragmented, but each identifies different causes. Im argues that the failure to institutionalize interest politics arose from the “strategic error” committed by societal forces who pursued the strategy of “movement politics” when what was required within the context of democratic transition was the war of position, as well as from the conservative mode of transition that left much of the old order (in particular, “company unionism”) intact. Kim, in contrast, emphasizes the irrelevance of religious and class cleavage, which robbed both civil and political societies of common organizing principles, leaving each realm highly fragmented. Finally, relying on the assumptions of the “public goods” and “rational choice” literatures, Seong concludes that internal fragmentation is generic to interest

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politics, arising from the very nature of civic organizations as collective actors that pursue public goods and hence are vulnerable to the threat of free riding. It is within the sector of organized labor that civil society has been most divided against itself and manipulated by the state, in the view of Byung-Kook Kim and Hyun-Chin Lim in Chapter 5. Although the power of labor surged with the transition to democracy, the promise of that power has not been realized due to an excessively radical and confrontational strategy in the early years of both the Sixth Republic and organizational divisions of the labor sector. Since 1989, the rate of unionization has steadily fallen, and efforts at class-based electoral mobilization have repeatedly failed. Lacking both a mass-based political party and a legitimate nationwide organization (independent of the state), labor was unable to “tame its political contentiousness” sufficiently to advance a viable set of policy alternatives. As a result, individual company unions pressed their own immediate, particularistic interests, and the labor movement was crippled by intense competition between an existing, officially sanctioned, and co-opted federation and a new, insurgent one (as well as internal divisions within them). But it was not only the internal weakness and strategic miscalculations of labor that impeded a broadly acceptable (and badly needed) reform of labor regulations. The intransigence of the chaebol in seeking maximum gains in labor flexibility while making minimum concessions for freer labor organizing, along with the inability of the Kim Young Sam government to broker a compromise, produced confrontation and crisis. Under the presidency of Kim Dae Jung (and in the circumstances of a grave economic crisis), progress has been made toward reforming labor as well as the chaebol themselves. However, the broader class compromise between business and labor that could usher in more sweeping institutional reforms is obstructed by the continuing weakness and divisions of organized labor.

ECONOMIC PERFORMANCE In Chapter 6, Chung-in Moon and Song-min Kim examine the relationship between democracy and economic performance in South Korea. Weighing the evidence from several regimes, they reject both the “demo-prosperity thesis” that democracy is essential for a thriving market economy and the “demo-disaster thesis” that sees democracy leading to wasteful populism and pork-barrel politics, distorting markets, and sapping economic vitality. Not only do

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many other factors intervene in the relationship between regime type and economic performance, but the record across South Korean regimes is too uneven to permit any clear inferences. Although economic growth in South Korea took off under the dictator Park Chung Hee, it was also under Park that huge economic distortions accumulated and finally brought economic disaster. Economic performance was outstanding under Park’s military authoritarian successor, Chun Doo Hwan, but that regime also benefited from highly favorable international conditions during the 1980s. Economic growth sharply declined under Chun’s successor in the new democracy, due in no small measure to erratic, ineffective policy management and radical labor mobilization. However, global recession and protectionism also contributed to the decline, and the economy made a spirited recovery during the first few years of the Kim Young Sam administration. The key question that Moon and Kim wrestle with is whether the sudden collapse of the South Korean economy in November 1997 can somehow be attributed, at least in part, to democratic government. Both public sector and private debt ballooned in South Korea during the Kim Young Sam years, as did nonperforming loans in a grossly overextended and underregulated banking sector. Moreover, South Korea’s international competitiveness steadily declined, due to corruption, bureaucratic red tape, government intervention in markets, unruly corporate governance, and rapid escalation of labor costs (as well as high capital costs). As Moon and Kim show, both the macroeconomic and microeconomic foundations of South Korea’s economic health eroded sharply during the 1990s. They believe the key culprit in the erosion and ultimate collapse was the South Korean corporate sector (in particular, the chaebol), which expanded their investments recklessly by taking on massive debt—along with the South Korean financial institutions, which priced risks poorly in financing much of this expansion. But they also lay considerable blame on the doorstep of government, which failed to reform the corporate sector and to monitor the troubled financial sector and appeared incompetent in handling the financial crisis during 1997. Does blame for the Kim Young Sam administration mean blame for democracy? Here they are much more circumspect. Democracy did permit rapid growth in wages, but Moon and Kim dismiss this as a major contributing factor to the economic collapse. Neither do they accept the argument by some that Kim Young Sam’s “real-name” financial reform contributed to the distortions. In fact, they assert the opposite: “It was delay in the implementation of democratic reforms that ruined the South Korean economy, not

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vice versa.” If the Kim Young Sam government had been more democratically responsive—severing the corrupt links between politicians and big business and requiring greater transparency and accountability in the corporate governance of the chaebol—the financial collapse might have been averted. As Moon and Kim conclude, the success of President Kim Dae Jung’s new government in achieving long-needed economic reforms is powerful testimony against the demo-disaster thesis. During 1998 and 1999, Kim Dae Jung succeeded in implementing far-reaching reforms in each of the three critical areas of economic distortion: labor, banking, and the chaebol. Democracy proved capable of enacting new institutional arrangements for more flexible labor markets; a more coherent and responsible banking system; and more transparent, consolidated, financially sound, and externally accountable corporate structures. Although many reforms remain to be enacted and a definitive assessment is much too premature, the first year of the Kim Dae Jung administration certainly demonstrated that democracy can be compatible with economic reform and renewal, if it has skilled and decisive leadership. In fact, crisis can provide an opportunity to mobilize support behind reforms by weakening and discrediting vested interests. For Moon and Kim, the key problem with Kim Dae Jung’s first year is not the lack of reform but the lack of regard in the reform process for democratic procedures and safeguards. The continuance of a delegative style of decisionmaking under a new president weakens the rule of law and obstructs the development of a broad, negotiated political consensus and the enactment of clear new rules that could make the economic reform process more sustainable over time. In economic policymaking, as in party politics, South Korean culture casts a long shadow over the spirit of constitutionalism and the arts of negotiation and accommodation that make for a deep and consolidated democracy.

A MORE DEMOCRATIC SOUTH KOREA? If there is no foreseeable alternative to electoral democracy in South Korea, there are many public doubts about its efficacy and serious shortcomings with its functioning. These we have traced to the difficult nexus of political culture and institutions, which generates a politics dominated by powerful personalities and regional allegiances, rather than by substantive issues and programs. Yet even in this context, important political and economic reforms have been achieved, and a civil society that is more internally democratic and

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pluralistic and better equipped to pressure the state and the politicians for reform is gradually emerging. The obstacles to a deeper, more accountable, better-functioning democracy may be strongly rooted in the cultural orientations and structures identified in this book. But culture is not destiny. A new generation of political and social activists is coming to maturity, with a more programmatic and public-spirited orientation toward politics and a keen awareness of the need for institutional reform. In both political society and civil society—but, we suspect, first in civil society—leadership and organization can break the mutually reinforcing dominance of personalism and regionalism and generate a new, more focused, and globally competitive public policy agenda. The first decade of the twenty-first century is likely to usher in a new politics for South Korea or at least a new set of faces. In all likelihood, Kim Dae Jung will be the last of the political generation from the 1960s and 1970s to hold the presidency. Quite possibly, the passage of political leadership to a new generation will soften regional attachments and open the way to new bases of political identity and affiliation. To create a new, more institutionalized party politics, a new set of party leaders and builders and a new set of functional issues will have to emerge. These are not yet quite visible as South Korea enters a new century. But if reform takes hold, it will generate some momentum of its own, as will globalization. The plain fact is that South Korea can no longer compete internationally with the economic and social structures that delivered its economic miracle, for these same structures, unreformed, also brought that miracle crashing down. New relationships have to be forged between state and capital, capital and labor, and state and society. A dense jungle of corrupt ties, autocratic practices, and opaque procedures has to be cleared. In the wake of devastating economic crisis and at the behest of an increasingly potent civil society, this clearing has begun. There is no guarantee that the politics of personalism, regionalism, and clientelism will not reemerge from this soil. But increasingly, domestic and international pressures demand a wholly different way of organizing and waging politics. In the tension between old ways and new imperatives, the struggle to craft and consolidate a more responsive, accountable, liberal, and legitimate democracy will proceed in South Korea’s next decade.

NOTES 1. For an assessment of Kim Young Sam’s legacy of institutional reforms and an agenda for future institutional reforms, see Larry Diamond

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and Doh Chull Shin, eds., Institutional Reform and Democratic Consolidation in Korea (Stanford: Hoover Institution Press, 1999). 2. On the concept of democratic consolidation, see Juan J. Linz and Alfred Stepan, Problems of Democratic Transition and Consolidation: Southern Europe, South America, and Post-Communist Europe (Baltimore: Johns Hopkins University Press, 1996), chap. 2; Linz and Stepan, “Toward Consolidated Democracies,” Journal of Democracy 7, no. 2 (April 1996): 14–33; and Richard Gunther, Hans-Jürgen Puhle, and P. Nikiforos Diamandouros, “Introduction,” in Gunther, Diamandouros, and Puhle, eds., The Politics of Democratic Consolidation: Southern Europe in Comparative Perspective (Baltimore: Johns Hopkins University Press, 1995), pp. 7–10. For the specific formulation of what democratic consolidation is, see Larry Diamond, Developing Democracy: Toward Consolidation (Baltimore: Johns Hopkins University Press, 1999), chap. 3. 3. Doh C. Shin, Mass Politics and Culture in Democratizing Korea (Cambridge and New York: Cambridge University Press, 1999), p. 72. 4. Doh Chull Shin and Richard Rose, “Responding to Economic Crisis: The 1998 New Korea Barometer Survey,” Studies in Public Policy 311, Centre for the Study of Public Policy, University of Strathclyde, Glasgow, p. 27. 5. Ibid., 20. 6. Shin, Mass Politics and Culture in Korea, 72. 7. Shin and Rose, “Responding to Economic Crisis,” 27. 8. Shin, Mass Politics and Culture in Korea, 75–76. 9. Shin and Rose, “Responding to Economic Crisis,” 18, 25. 10. Ibid., p. 21. Again, these data and all other data from the Shin and Rose essay come from the October 1998 survey. Both surveys cited here were administered to nationwide representative samples. 11. “Fully committed supporters” consistently support democracy across four different orientations: (1) support for the democratic transition, (2) belief that democracy is always preferable, (3) support for expanding democracy, and (4) internalization of democratic norms (supporting both mass public participation and multiparty competition). “Superficial supporters” (24 percent of the public) endorse the transition to democracy but do not believe that democracy is always preferable. Shin, Mass Politics and Culture in Korea, 71–79. 12. For example, satisfaction with democracy is one of only two political or economic variables that has a significant effect on support for the democratic regime, and this effect is positive. Moreover, satisfaction with democracy and assessments of the performance of particular presidents appear to be related to perceptions of the extent of political corruption. Shin, Mass Politics and Culture in Korea, 89, Table 3.8; and Shin and Rose, “Responding to Economic Crisis,” 22–23. 13. Guillermo O’Donnell developed the concept of delegative democracy with the third wave Latin American democracies in mind, but the concept has rather wide application around the world, including to Russia and other post-Soviet democracies and even to the style of executive governance in such parliamentary systems as Turkey and Pakistan. See Guillermo O’Donnell, “Delegative Democracy,” Journal of Democracy 5, no. 1 (January 1994): 55–69; and Larry Diamond, “Is the Third Wave Over?” Journal of Democracy 7, no. 3 (July 1996): 20–37. 14. Several of our contributors are concerned with this distinction between the attainment of the minimal institutional features of electoral

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democracy and the deepening and improvement of democracy to become more rigorously respectful of the law, constitution, and human rights; more constrained and “horizontally” accountable in the exercise of executive power; more respectful of the rights of minority groups; more pluralistic in its scope for diverse organizations in civil society to exercise political voice and influence; and more liberal in the space for citizens to speak, organize, publish, demonstrate, and dissent. Although the authors use somewhat different terms to refer to this deeper level of democracy, they share an underlying conception of an agenda and potential trajectory for democratic improvement. For a summary discussion of the distinction between “electoral democracy” and the higher threshold of “liberal democracy,” see Diamond, Developing Democracy, 7–13. 15. For a theoretical treatment of these and related dimensions of partysystem institutionalization, see Scott Mainwaring and Timothy Scully, “Introduction,” in Mainwaring and Scully, eds., Parties and Party Systems in Latin America (Stanford: Stanford University Press, 1995). 16. On this fundamental tension in democracy and the need for balance between cleavage and consensus, see Gabriel A. Almond and Sidney Verba, The Civic Culture: Political Attitudes and Democracy in Five Nations (Boston: Little, Brown, 1965), pp. 356–360; and Larry Diamond, “Three Paradoxes of Democracy,” Journal of Democracy 1, no. 3 (Summer 1990): 48–60.

2 South Korean Democratic Consolidation in Comparative Perspective Hyug Baeg Im

Until the mid-1980s, South Korea was a typical example of a country with a dynamic and rapidly growing economy that could not develop democracy. Since then, however, its reputation has changed dramatically. Even though South Korea’s democratic evolution occurred relatively late, its pace has been so swift that it has already overtaken many earlier democratizers in Latin America and Southern Europe. Today, in the world’s most militarized nation, South Koreans have accomplished the twin goals of economic prosperity and political pluralism. With the first stage of democratization successfully completed, South Korea’s battleground shifted from a “war of movement”—to replace authoritarianism with a democratically elected government—to a “war of position,” to construct accountable, representative institutions and a sound civil society. South Koreans are now debating such issues as the preferred type of democracy, the ways to organize civil society, and the reformulation of state–civil society relationships. This indicates that South Koreans are now entering the second stage of democratization, democratic consolidation. Using a comparative perspective, in this chapter I explore the positive and negative aspects of democratic consolidation in South Korea. Specifically, I probe the structural, institutional, and cultural opportunities and constraints that South Korea presently faces. This does not mean that I believe in structural determinism: democracy is a choice, not a necessity. Nonetheless, analysis of structural, institutional, and cultural opportunities and constraints is an essential component of the study of democratic consolidation because “structural and institutional constraints determine the range of options 21

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available to decision makers and may even predispose them to choose a specific option.”1 Eventually, all the tasks of democratic consolidation depend on the strategic interactions among relevant political actors involved. Before crafting democracy, actors should know the structural, institutional, and cultural conditions available to them.

DEMOCRATIC CONSOLIDATION: CONCEPTUAL REVIEW When can we call a new democracy consolidated? How does one know when consolidation is complete? Adam Przeworski provides a set of minimum conditions that must be met for a democracy to be considered consolidated: “Democracy is consolidated when under given political and economic conditions a particular system of institutions becomes the only game in town, when no one can imagine acting outside of the democratic institutions, when all the losers want to do is to try again within the same institutions under which they have just lost.”2 Similarly, for Juan Linz, a consolidated democratic regime is one “in which none of the major political actors, parties, or organized interests, forces, or institutions consider that there is any alternative to democratic processes to gain power, and that no political institution or group has a claim to veto the action of democratically elected decision makers.”3 In a more comprehensive formulation, Linz and Alfred Stepan consider democracy to be consolidated when the following three conditions obtain: “Behaviorally, no significant political group seriously attempts to overthrow the democratic regime; attitudinally, the overwhelming majority of people believe that any further political change must emerge within the parameters of democratic procedures; and constitutionally, all actors become habituated to the fact that political conflicts will be resolved according to established norms and that violations of these norms are likely to be both ineffective and costly.”4 According to Przeworski, the minimalist conception emphasizes a spontaneous and self-enforcing compliance with democratic norms and institutions: “Compliance constitutes the equilibrium of the decentralized strategies of all relevant political forces.”5 For me, however, the definition of democratic consolidation as simply the institutionalization of competition is too narrow, as it rests on a Schumpeterian concept that equates democracy with elections. Democracy is not simply electoral competition held on a regular basis. A regime that holds elections on a regular basis but that excludes

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significant political forces from competing, bars particular socioeconomic alternatives and blueprints from being discussed in electoral agora, and remains unaccountable for its actions cannot be called democratic. Many frail but enduring democracies are fraught with informalities, inequality, irrationality, injustice, abuse of power, particularistic enforcement of law, and corruption.6 In many new democracies, political elites do not attempt to subvert constitutional principles openly, but their commitment to democracy remains opportunistic and is not internalized.7 A broadened conception of democratic consolidation is therefore needed. In addition to the “procedural minimum” of regularly contested elections, a consolidated democracy needs guarantees of basic civil rights for citizens, accountability and responsiveness from its leaders, civilian control over the military, and Tocquevillian social democratization (that is, the absence of extreme forms of social relations and the protection of citizens by law in social and economic relationships).8 In sum, one cannot consolidate democracy by simply institutionalizing electoral competition; one needs, more broadly, to stabilize, institutionalize, routinize, internalize, habituate, and legitimize democratic procedures and norms in political, social, economic, cultural, and legal arenas at both the elite and mass levels.9

THE MODE OF DEMOCRATIC TRANSITION The mode of democratic transition has long-lasting impacts on the pattern, content, and degree of democratic consolidation. According to Terry Lynn Karl and Philippe C. Schmitter, the mode of transition determines, to a significant extent, which type of democracy will emerge, whether it will be consolidated, and the long-range consequences for different social groups.10 Therefore, in order to predict the prospects for consolidation of a new democracy, one may look back upon the enabling conditions, modes, and strategic interactions that made the democratic transition possible. What were the distinguishing features of South Korea’s transition to democracy? First, it should be noted that the South Korean transition was a typical example of transitions from economically successful authoritarian regimes.11 Two contrasting patterns of democratic transition have been seen to emerge from the economic performance of authoritarian regimes: “crises of success” and “crises of failure.” In Latin America and Eastern Europe, authoritarian dictators were forced to step down from power because they failed to

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accomplish the self-imposed historical mission of economic development. Severe economic crises—“crises of failure”—rendered favorable conditions for democratic transitions. In South Korea, Taiwan, and Spain, democratic transitions were caused by “crises of success.” The authoritarian dictators in these countries had accomplished their historical mission of economic development, had rendered themselves obsolete, and therefore needed to be replaced by a new form of government that would meet new historical necessities such as greater freedom and welfare for the masses.12 Compared to new democracies born of “crises of failures,” new democracies arising from “crises of success” are in an advantageous position for democratic consolidation. In the latter, the economy is generally in good shape. The postauthoritarian democratic state is not bankrupt. It inherits a relatively efficient bureaucracy and does not find itself in the situation of “a weak state confront[ing] a weak society.”13 New democracies born from the crises of success do not face the formidable task of simultaneous economic and political transformation. This points to the second key feature of South Korea’s transition. Democracy in South Korea emerged out of a “market authoritarian regime” that stressed market rationality and economic liberalization.14 The market authoritarian state compels actors to conform to market order, it deprives the underprivileged of shelters from the destructive forces of the market, and it removes the protection and subsidies that were provided to rent-seeking capitalists and farmers. Thus, the market authoritarian state provides a better foundation for market-oriented economic adjustment and structural reform than do populist, socialist, or clientelist authoritarian regimes. Related to this was a third advantage of the South Korean transition, the absence of powerful and enduring links between the authoritarian state and social organizations. Rather, in the market authoritarian state, weak state-society ties precipitate the demise of authoritarianism. The state tries to demobilize and depoliticize civil society, but when popular sectors rise up, the state—having relied on market mechanisms—finds its capacity to build an organized base of support diminishing.15 The demise of Chun Doo Hwan’s market authoritarian state resembled this scenario. Chun’s marketoriented policies dissolved the “developmental coalition” formed under Park Chung Hee. For big business, stabilization measures meant the disappearance of rents furnished by the state in the form of subsidies and protection from foreign competitors. By strengthening market principles, the state lost its power to lure big business into an enduring authoritarian coalition. In the face of popular

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protests, state elites found that big business was no longer a staunch ally. Market reforms (cuts in grain and fertilizer subsidies and liberalization of agricultural imports) also turned farmers against the Chun regime. Karl Polanyi once pointed out that unrestrained market movements spark the countermovements of market losers.16 The eruption of antistate popular movements of workers, farmers, and the urban poor in South Korea in the mid-1980s resembled a Polanyian countermovement of civil society. Although the middle class was the main beneficiary of Chun’s neoliberal reforms, it did not support his regime. Free from economic worries, it no longer tolerated the trade-off between economic development and political freedom. Rather, the middle class joined the democratization movement and helped the authoritarian powerholders to concede to democratic reforms, as embodied in the June 29, 1987, declaration of the ruling party’s candidate, Roh Tae Woo.17 Finally, the mode of democratic transition in South Korea was close to Samuel Huntington’s “transplacement,” Donald Share’s “transition through transaction,” Karl and Schmitter ’s “transition by pact,” and Przeworski’s “democracy with guarantees.”18 The South Korean transition emerged out of a protracted and inconclusive standoff between the authoritarian regime and its democratic opponents. The authoritarian regime and democratic opposition made a breakthrough for democratic transition on the brink of “reciprocal destruction.” Both agreed to get out of a Gramscian “catastrophic balance” by making a second-best compromise to restore formal democracy. On the eve of democratic transition, the balance of force between the regime and its opposition was catastrophic in the sense that the democratic coalition, though greatly broadened, was not strong enough to force the surrender of the regime, and the regime, though severely weakened and divided, had kept the last resort, that of calling in the army. The June 29 declaration and ensuing constitution making were a political pact, in which authoritarian powerholders were guaranteed their incumbent status in exchange for their concession to restore democratic competition. Incumbency was a primary reason that the military candidate, Roh Tae Woo, won the 1987 presidential election. Because the transition was made through pacts, guarantees, or negotiations among elites, continuity with the authoritarian past prevailed in the political, social, and economic policies of new democratic governments. Despite the restoration of political competition in central and local government and the expansion of space for civil society, the authoritarian economic and social fabric has remained

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largely intact. Democracy in South Korea has been anemic and conservative. As David Steinberg points out in the concluding chapter of this book, the legacies of the authoritarian past have hindered the institutionalization of democratic rules of the game and the expansion of democracy from the political to the social and economic arenas. As elsewhere, these features of the previous authoritarian regime and modalities of democratic transition shaped but did not determine the prospects for democratic consolidation. In South Korea, as in Poland, the foundational pacts between authoritarian powerholders and democratic opposition did not last indefinitely. South Korea’s first civilian president, Kim Young Sam, broke the foundational pact that guaranteed the “vital interests” of the military when he put the former military presidents, Chun and Roh, on trial. Whether the “confining conditions” of the transition will be removed or will endure depends on the choice and craftsmanship of political leaders in the postauthoritarian democracy. Besides the modalities of transition, many factors have affected the prospects for democratic consolidation in South Korea. Factors such as ethnic homogeneity, religious tolerance, an effective state, and civilian control over the military have been supporting and facilitating the consolidation process, whereas factors such as low institutionalization of political society, weak constitutionalism, underdeveloped civil society, the impact of globalization, and external security vulnerability have been obstructing the consolidation process. None of these factors, however, works for or against democratic consolidation in a monolithic and unilinear way. These factors often have multiple and sometimes contradictory implications. Some of the supportive conditions also have elements that may create problems for democratic consolidation, and some of the obstructive factors may also have beneficial components.

SUPPORTIVE CONDITIONS FOR DEMOCRATIC CONSOLIDATION Ethnic Homogeneity Ethnicity poses a more serious challenge for new democracies than it did for Western democracies in the eighteenth and nineteenth centuries. As it developed in Western Europe, democracy was characterized by the rule of the people within the boundaries of a national territory. The people were defined as the sum of legally equal citizenship. The notion of popular sovereignty constitutes both the

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demos component and the ethnos component. Democratization means, on the one hand, the extension of citizenship rights to lower classes, women, and younger people; and on the other hand, the extension of citizenship to nonnatives (immigrants, aliens, guest workers). The popular sovereignty of the modern state has an inclusive character. It allowed the possibility of admitting immigrants to the national community, provided they adhered to the political rules and were willing to adapt themselves to the national culture. Therefore, ethnic homogeneity based on common ancestry did not set the boundary of citizenship. The real requirement for membership in a nation was not ethnicity but acceptance of the rights and duties of citizens. The French and American revolutions spread the idea of people living as citizens of nationally constituted societies. With the successful creation of culturally homogeneous citizens, nationalism could coexist with democracy. However, the new democracies of the postcolonial and postcommunist worlds have generally not enjoyed such a happy cohabitation of nationalism and democracy. Once a vacuum was created by the collapse of communism in the East, ethnic nationalism rushed in to fill the void.19 Cooperation among ethnic groups became harder in the post–Cold War era because the advantages of scale for security and economic prosperity disappeared, and thus different ethnic groups tried to build a nation based on monoethnicity. Intensifying global economic competition worsens the ethnic problem. Those relegated to a marginal position in the international division of labor try to find shelter in antimarket, past-oriented, local, and ethnic identities. These kinds of “backward identity formation” are detrimental to the consolidation of democracy. Democracy thrives in the soil of pluralist political culture, tolerating diverse opinions and alternatives, but ethnonational fundamentalism suffocates pluralism and tolerance. In contrast to the new democracies of Eastern Europe, Africa, and much of Asia, the ethnic setting in South Korea is propitious for democratic consolidation. South Korea is one of the most ethnically homogeneous countries in the world and, therefore, has not had to search for consociational or other institutional formulas to manage ethnic conflict. For South Koreans, the distinction between an ethnie and a nation has never existed. The South Koreans imagined the geographic boundary of the nation and identified its members through an ethnie that dated back to the beginning of their history.20 In addition to ethnic homogeneity in biological terms (common ancestry, common blood ties), the common painful experiences of Japanese colonialism (1910–1945) and the Korean War (1950–1953)

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strengthened common bonds of nationalism.21 Cohesive ethnic nationalism was also a prime mover of “late industrialization,” in that South Koreans embraced the quest for an industrialized economy as the collective project of the nation. Yet from a different angle, South Korea’s ethnic homogeneity could be a liability for democratic consolidation. As Byung-Kook Kim has observed, being a homogeneous ethnie with common ancestry and shared historical memories and experiences, South Koreans tend “to perceive social conflict as a source of political instability and disaster” rather than as an inevitable and legitimate feature of democratic politics.22 I agree mostly with Kim that ethnic homogeneity fosters a high degree of conformity in South Korea. But South Koreans are also the most individualistic people in East Asia; South Korea was the most rebellious Japanese colony, and South Korean workers have been more individualistic than Japanese and Taiwanese workers. Religious Tolerance South Korea is one of the most religiously vibrant, dynamic, and pluralistic societies in the world. Most of the world’s largest churches in terms of number of followers are located in South Korea, but no single religion dominates. Buddhism, Protestantism, Catholicism, and Confucianism (even though some say it is a set of ethical codes rather than a religion) coexist peacefully in South Korea. Given that many new and putative democracies in Eastern Europe, Africa, Asia, and the Middle East have been suffering from religious conflicts and intolerance, South Korea’s interreligious harmony is a blessing for democracy. South Koreans became believers in one or another religion in order to survive the stresses generated by the devastating effects of the Korean War, rapid, compressed industrialization, and authoritarian repression. During the last half century, the growth rate of the number of Christians in South Korea has been one of the highest in the world. But this growth did not come at the expense of traditional religions like Buddhism. As Byung-Kook Kim observes in Chapter 3 and at greater length elsewhere, religious tolerance has been nurtured by indigenization of imported foreign religions like Buddhism, Confucianism, and Christianity, creating a syncretic mix with shamanism.23 Shamanism does not acknowledge the transcendental state of human existence; what matters is the life in this world. It lacks a dichotomous conception of this-world versus otherworld, body versus spirit. By mixing Buddhism and Christianity

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with shamanistic elements, South Koreans transformed gods into an instrument to acquire secular goals.24 Such functionalist and anthropocentric understanding and practice of religions fostered religious tolerance.25 Confucianism has also become an asset rather than a liability for democratic consolidation in South Korea. The compatibility between Confucianism and democracy is widely debated. Many now share the view that the Confucian ethic—emphasizing hard work, thrift, diligence, education, social harmony, and loyalty to authority—played an important role in the East Asian “miracle.” However, many still retain the view that the Confucian value system (and other traditional value systems, such as Buddhism and shamanism) have been more of an impediment than a contributing factor for democratic consolidation.26 Huntington, too, argues that “Confucian democracy is a contradiction in terms.”27 The Confucian emphasis on family, group norms, social harmony, and moral, political, and economic order has suffocated the development of a political culture of individualism and personal freedom and has given rise to “government by men” rather than “government by laws.”28 Other elements of Confucian ethical codes that have impeded democratic development include its emphasis on duty rather than liberty, the minimal recognition given to individual rights and equality, and the strong value on unity over plurality. Nonetheless, others, such as Francis Fukuyama, argue that “Confucianism is obviously compatible with democracy,” for three reasons. First, the Confucian examination system is a meritocratic institution with potentially egalitarian implications. Second, the Confucian emphasis on education facilitates popular participation in political debate. Finally, “thisworldly” Confucianism is tolerant of and has coexisted with other religions, such as Buddhism and Christianity.29 Confucianism in South Korea has other virtues that are compatible with and may even facilitate democracy. In South Korea, there is no Confucian orthodoxy in everyday life. In fact, Confucianism has been so secularized as to be called “post-Confucianism.” A “High Confucianism” or political Confucianism as the official ideology of ruling elites has been replaced by “low Confucianism,” or the bourgeois Confucianism of ordinary people.30 Secularized Confucianism has been not only an engine of South Korean growth but also a new reservoir for democratic culture in South Korea. First, Confucian emphasis on “this-worldliness” fosters a positive attitude toward the affairs of this world and faith in the transformability of the human condition. Second, anthropocentric Confucianism emphasizes self-cultivation but has an aversion to pure self-centeredness;

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thus it promotes individualism with civic duties. Third, postConfucianism nurtures political accountability by its emphasis on the reciprocity of respect for authority and public accountability. Confucianism regards the political order as a moral community, and the Confucian emphasis on extending networks of relationships fosters social interconnectedness, public spirit, trust, and social capital—essential features of a vibrant democracy.31 Imbued with a syncretic culture, South Koreans have shown extraordinary adaptability and selectivity to transform Confucianism from its old, high, dogmatic, political, authoritarian form to a new, low, pragmatic, bourgeois, democratic Confucianism, which has assimilated some Western values.32 For instance, the old familism suffocates individual freedom and initiatives; the new familism and loyalty to kinship and community contains the excessive individualism and destructive market competition that are rampant in Western democracies. Thus, pragmatic Confucianism (and Christianity) represent an asset rather than a liability for the consolidation of democracy in South Korea.33 Unlike Singaporeans and Malaysians, South Koreans do not stick to an “Asian way” or “Asian values.” Rather, they accommodate Western values without losing their rich tradition of Confucian culture.34 An Effective State For the consolidation of democracy, the authority of the polis and the rights of the demos should not be in conflict.35 Democratic consolidation requires an effective state because only an effective state can generate the conditions that ensure the universal realization of citizenship.36 Without an effective state, there would be no free and authoritative elections, no monopoly of legitimate force, and no effective protection of citizens rights by the rule of law. In many new Eastern European and Latin American democracies, however, the most serious problem is that “a weak state confronts a weak civil society.”37 As Przeworski puts it: “Gripped by fiscal crises, barraged under the coincidental neoliberal onslaught, they lost the capacity to provide minimal functions.”38 In South Korea, too, the power of the state has been weakened since the transition. Yet the state is still effective compared to other new democracies. Like other cases of transition, democratization in South Korea has devolved power from the central government to local governments and communities. In 1991, local assemblymen were elected in South Korea for the first time since Park Chung Hee

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terminated local elections.39 Four years later, local government heads began to be elected, with opposition parties clearly winning in a majority of localities. Despite extensive devolution of power, the state is still relatively effective. Moreover, the efficiency of the state bureaucracy has been increased by civilian government political reforms, such as requirements that politicians and high-ranking officials publicly disclose their assets, anticorruption legislation, reform regarding political contributions and campaign money, and the presidential decree that a “real-name financial accounting system” be used to prevent businesspeople from bribing officials and politicians. Civilian Control over the Military Many new democracies have been threatened, explicitly and implicitly, by a military establishment that regards itself as the privileged definer and guardian of the national interest.40 In many new democracies, even after returning to the barracks, the “attentive” military plays a significant role in politics behind the scenes. In Chile, the armed forces have been constitutionally guaranteed their tutelary power. In addition, “reserved domains” of the military and national security apparatus remove (in practice, if not constitutionally) specific areas of governmental authority and substantive policymaking from the purview of elected officials.41 Unless military tutelage and “reserved domains” are eliminated, a new democracy cannot be consolidated. In contrast to many emerging democracies, South Koreans did a tremendous job of extricating the military from power and reasserting civilian supremacy over it. Although Kim Young Sam, the first civilian president in thirty years, owed much to former military elites for his election to the presidency, he did an impressive job of establishing firm civilian control over the military. Kim’s reform was so successful it compels a rethinking of the Guillermo O’Donnell–Philippe Schmitter model of democratic transition, in which the military and the capitalists are the queen and the king of the democratic chess game, who cannot be threatened with capture lest they “sweep the opponents off the board to kick it over and start playing solitaire.”42 Przeworski also suggested that the pro-democratic forces be prepared to offer the military concessions in exchange for democracy.43 However, to everybody’s surprise, Kim Young Sam quickly took decisive action to purge most of the politicized military officer group, Hanahoe, who under the Chun and Roh governments had monopolized strategic posts and provided the key base

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of support. Chun and Roh themselves were tried on charges of corruption, organizing the military subversion of December 12, 1979, and the Kwangju massacre in May 1980. President Kim’s reform of the military was no doubt the greatest achievement of his presidency. Purging the entrenched military elites from top political and military positions was a highly risky initiative for the president of one of the most militarized countries in the world, yet he succeeded. The potential for military subversion has been further preempted by the relatively good performance of democracy in South Korea. Democratic institutions have at least functioned to provide political stability and some progress toward political, social, and economic reforms. As a result of both of these factors, few South Koreans can now conceive of a military coup as a viable option to address the problems of the country.

OBSTACLES TO DEMOCRATIC CONSOLIDATION Low Institutionalization of Political Society To function effectively, democracy requires strong institutionalization of political society. To consolidate a new democracy, political parties, electoral campaigns, and representative organizations must have sufficient capacities to articulate, aggregate, and represent the interests of their constituencies in the political arena. The fact that elections are institutionalized does not necessarily mean that a new democracy is consolidated. Free and fair elections are a necessary but not sufficient condition for democratic consolidation. In South Korea, political society crossed a minimal threshold by institutionalizing electoral competition. With the election of Kim Dae Jung as president in December 1997, three consecutive presidents had been elected under the same rules of the game. This achievement increased expectations that democratic competition would be repeated regularly regardless of exogenous fluctuations. Yet overall, the political system in South Korea has not reached the point of genuine institutionalization and consolidation. In between elections, the accountability and responsiveness of the government to citizens remain low, and South Korean politics is still plagued by strong presidential delegativism. In South Korea, as Byung-Kook Kim shows in Chapter 3, political parties have not yet been institutionalized. In fact, South Korean parties are ephemeral. Few parties have kept their names beyond one government; no party or party name has lasted more than two

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republics thus far.44 The major political parties come and go with the ambitions of charismatic leaders who have an unshakable regional stronghold. Since 1987, most politicians, irrespective of their ideological and policy positions, have continuously aligned and realigned according to the whims of their charismatic leaders. In South Korea, the leader “creates the party to suit his or her political needs or, in the more recent past, re-creates it in the leader ’s own image.” Moreover, “autocratic control from party headquarters has vitiated the democratic process within the party.”45 Three dominant political leaders of the post-1987 period, Kim Young Sam, Kim Dae Jung, and Kim Jong Pil, founded, dissolved, and refounded “a political party at will, which in turn manages the election by controlling almost exclusively the power of nominating the party candidates of each and every electoral district, and successfully elected representatives arrive at the National Assembly and function like robots under the strict guidance and leadership of the party bosses.”46 As David Steinberg shows in the concluding chapter of this volume, party bossism and the personalization of power pose powerful impediments to the improvement and consolidation of democracy in South Korea. First, party bossism obstructs the growth of democratic responsiveness and accountability. Elections are held regularly, but elected officials do not keep their campaign promises to their constituencies. Rather, they just “stand in line with the boss,” which renders the collective rational choice for voters impossible and imparts to democracy a superficial quality. Second, party bossism fosters clientelism in politics. In the absence of substantive cleavages to mobilize electoral support, the party bosses came to rely on monetary incentives.47 The patronclient relationship between the party bosses and their followers nourishes corruption, particularism, personalism, and nepotism. Elected officials serve the particularistic interests of bosses, rather than delivering collective goods to the community as a whole. Even though the game is played “inside” democratic institutions, the real practices diverge from the formal institutions and rules, calling democratic consolidation into question.48 Third, party bossism of the South Korean type is based on regionalism. Since the authoritarian era, the outcome of electoral politics has been decided by regional cleavages. Under authoritarian regimes, regional voting contributed in some sense to democratic transition. The two leaders of the democratic opposition, Kim Young Sam and Kim Dae Jung, enjoyed the staunch support of their home provinces, which tipped the balance toward the democratic coalition. However, during the transition, deep-seated regional cleavages

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divided the pro-democracy vote between the two Kims and enabled Roh Tae Woo to win the presidency in 1987 with only 36 percent of the vote. Since then, the impact of regional cleavages on electoral outcomes has been so overwhelming as to prevent the articulation of other interests—or of substantive programs and policy visions— during election campaigns. As a consequence, elected representatives do not represent any particular class, religious, or occupational interests or the general interests of the nation; they only follow faithfully the orders of the regional boss. The consolidation of South Korean democracy has also been hindered by the highly delegative nature of governance. Under delegative democracy, even though vertical accountability of rulers to the ruled is secured through regular and contested elections, “horizontal accountability” of officeholders or state agencies to one another cannot be instituted.49 Although Guillermo O’Donnell advanced this concept with Latin America’s new democracies in mind, it fits the case of South Korea, where each president tries to rule the country as if he has been delegated all the power from the people through election. He acts free of constraints, presents himself above parties and organized interests, and thus transforms sovereign voters into passive audiences. Posing as “the savior of the country,” the president bears the sole responsibility for the successes and the failures of his policies. The reform politics of President Kim Young Sam was infused with this delegative character, as the president and his close advisers in the Blue House made policies without consulting parties, the legislature, and relevant interest groups, often bypassing the National Assembly through the use of presidential decrees. Strong delegativism inhibits the consolidation of new democracy in South Korea for several reasons. First, a “delegative president” tries to secure a solid majority in the legislature by merging parties and co-opting National Assembly members from opposition parties. This constant reshuffling of parties after elections partially negates the will of the electorate and undermines the capacity of voters to make rational choices among competing parties. Moreover, the pursuit of a legislative majority through this tactic of postelection mergers of parties and co-optation of assembly members reflects the ambition for “imperial president, rubber stamp legislature,” instead of accepting horizontal accountability between elected officials. Second, such a president prefers to push policies through rather than persuade others to support them. “Pushing through” may be a desirable quality of leadership during democratic transitions, but it does not advance the consolidation of democracy. Democracy

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involves the arts of compromise, negotiation, persuasion, and consensus building. Although time-consuming and difficult, these processes produce decisions and policies with incomparable power and authority. By contrast, the repeated resort to presidential decrees and impositions whenever the delegative president encounters resistance to proposed policies weakens the representativeness of democracy. Finally, delegativism gives rise to daekwonjuui (ultimate power cultism) in South Korea, which leads political power aspirants to equate election to the presidency with complete power. As a result, South Korean politics revolve inordinately around the presidential election, which becomes virtually a life-and-death battle. These high stakes obstruct the tolerance and compromise necessary for democratic consolidation.50 Weak Constitutionalism, or “Constitutions Without Constitutionalism” If the constitution does matter for democratic consolidation, which constitution enables democracy to last longer? Citing statistical evidence, many favor parliamentarianism over presidentialism.51 Nevertheless, the superiority of parliamentarianism is not sufficient to recommend an immediate switch. Even though we are persuaded that parliamentarianism is more conducive to democratic consolidation and governance, the presidential system is no doubt a truly democratic constitutional system. Once a democratic government is installed, the first job for consolidating new democracy is not searching for a new and better constitutional formula, but rather internalizing and routinizing the existing constitutional formula, if it satisfies the minimum requirements for democracy. Intense debate and disputes about the constitution may destabilize fragile new democracies. Historically, South Korea has been notorious for having constitutions that “are modified frequently and remain irrelevant.”52 From 1948 to 1987, the constitution was changed nine times, and the average life of a constitution was less than four years. Every president or prime minister followed his own constitutional formula. Making, revising, and reviving constitutions was the main object of political conflict. In South Korea, the debate on a new constitution started the day after the presidential election. Every power contender tried to revise the constitution to increase the probability of winning the next election. As a consequence, the constitution did

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not have the institutional power to regulate interaction and competition among citizens, politicians, parties, and interest associations. Democracy is consolidated when relevant actors can expect that democratic competition will be held regularly and repeatedly under the same rules of the game in the foreseeable future. This is what Przeworski means by “institutionalizing uncertainty.” Therefore, what South Korea needs now to secure consolidation is not a search for a more perfect democratic constitution but a process of internalizing, habituating, and routinizing the values and norms of the presidential system. Changing the constitution in this early stage of democratic consolidation might destabilize the fragile democracy and weaken institutional autonomy. It would not be too late to consider a more suitable constitutional formula later, after South Korean democracy crosses the threshold of consolidation. The Underdevelopment of Civil Society Consolidated democracy needs a strong civil society, not just a large number of independent associations but “a society of civility,” or civil virtues.53 For G. W. F. Hegel and Karl Marx, civil society meant burgerlich gesellschaft (bourgeois capitalist society or market society). But the concept of civil society is broader than market society, extending to the spheres of community and culture. Alexis de Tocqueville found the secret of American democracy’s effective functioning in the American people’s “art of association.”54 Civil associations made individual citizens, who were likely to be impotent under mass democracy, into active citizens. Through the mediation of voluntary civil associations and the active participation of citizens in community matters, the private interests of citizens more closely coincided with the public interests of communities. Today’s neo-Tocquevillians confirm that a dense network of civil associations improves democratic governance by helping to address concrete social problems, such as education, poverty, unemployment, crime, drugs, and violence. More fundamentally, it breeds “social capital,” the “features of social organization such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit.”55 Civil society also performs other positive functions for democratic consolidation. First, it increases predictability among relevant political actors because civil associations provide more reliable information for governance. Second, civil society conducts a “school of democracy” that inculcates conceptions and norms that are civic. Third, it provides channels other than political parties for the articulation, aggregation, and representation of interests. Fourth, it reduces the burden of

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governance for both public authorities and private producers. Finally, it provides the last reservoirs of resistance to arbitrary and tyrannical rule.56 In South Korea, a strong civil society played a major role in the transition to democracy.57 It was the coalescence of students, workers, journalists, artists, priests, monks, professionals, and whitecollar workers that brought about democracy from authoritarianism in South Korea. In the posttransition period, however, civil society in South Korea has failed to transform itself from a “mobilizational civil society” into an “institutional civil society” (see Kyoung-Ryung Seong’s detailed discussion of the dynamics and limits of South Korean civil society since democratic transition in Chapter 4).58 After the democratic transition, the state was forced to loosen its tight control over civil society and allow it more space to organize. Businesspeople, workers, farmers, the urban poor, artists, teachers, and journalists all formed autonomous associations to defend their class, sectoral, professional, or occupational interests. Nonetheless, the proliferation of interest associations has not translated into an institutionalized interest politics. These associations have not yet developed institutionalized channels for mediating differences among themselves and with the state. South Korean interest politics is still amorphous, centrifugal, hyperbolic, and unruly. Why has an institutional civil society not yet emerged under democracy in South Korea? First, civil society movements failed to understand the difference between transition politics and consolidation politics. In the period of democratic transition, pro-democratic actors are generally engaged in a Gramscian “war of movement” to dethrone authoritarian powerholders by a coup de grace. The transition process is “one of rapid change, high risk, shifting interests, and indeterminate strategic reactions,” and therefore, sometimes, dramatic and bold actions are required to prevail in the “street parliaments.”59 However, democratic consolidation requires “settling into trenches” for a “war of position.” Once the dangers of transition have been overcome, civil society forces are compelled to transform themselves into “institutional civil society” by fulfilling these requirements: “to organize internal structure more predictably, to consult their constituencies more regularly, [and] to consider their long term consequences more seriously.”60 In South Korea, as elsewhere, the intense mobilization of civil society abated immediately after the transition, when the challenge became to shift from movement politics to institutional politics. Yet, civil society movements did not give up their political radicalism,

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militancy, intransigence, and moral purism, which proved to be a disaster for “moral civil society.”61 In the National Assembly elections of 1988, 1992, and 1996, no candidate representing radical social movement forces won a seat in the National Assembly. Having failed to enter the institutional political arena, the “moral,” radical civil society groups were gradually discredited and forgotten. As a consequence, the activists of moral civil society were compelled to be co-opted en masse into political parties and state administrations.62 Second, the conservative nature of the democratic transition contributed to the underdevelopment of civil society. As noted above, because the new democracy emerged from a crisis of success, the new democracy inherited the socioeconomic policies of the previous authoritarian state. These included a set of labor policies and institutions that have inhibited the growth of vibrant and stable associations in industrial relations. As Byung-Kook Kim and HyunChin Lim explain in Chapter 5, the democratic state inherited “company unionism” from the authoritarian state and maintained “the three bans” of South Korean industrial relations until the last days of the Kim Young Sam government: the ban on third party intervention, the ban on multiple unions in a single workplace or at the company level as well as at the industrial level, and the ban on political activities of unions. Even under the reformist government of Kim Young Sam, organized workers were not integrated into the tripartite partnership of the state, capital, and labor. As a consequence, industrial relations have been plagued by fierce confrontation between unions and firms, and debates over wage rates have been settled by strikes. As wage increases outstripped growth in productivity, South Korea’s international competitiveness seriously eroded. High strike rates, lockouts, and police intervention in workplaces were the costs that South Korea paid for the lack of democratic reform in labor relations. The unprecedented labor turmoil of late 1996 and early 1997—although triggered by the government’s “delegative” passage of its labor reform bill—was in many ways an explosion of protest against the generally undemocratic character of labor relations in South Korea. Although the situation has changed somewhat with the economic crisis and the labor reforms passed in the first years of the Kim Dae Jung administration, the institutional weakness of labor relations in South Korea remains a serious problem for democratic consolidation. The Delay of Welfare Democracy The current state of South Korean social welfare is dismal, with the level of social welfare remaining even below that of late developers

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like the Philippines, not to mention Latin American democracies. Since the democratic transition, the minimum wage, pensions, medical insurance, unemployment insurance, and industrial accident insurance have been introduced. However, South Korea still does not have family allowances (monthly stipends for poor families) and social security. In addition, the South Korean welfare system is heavily market-dependent. The state bears little direct responsibility for welfare; instead, it is funded and provided mainly by private companies, and therefore welfare payments are highly dependent upon market conditions. This generates not only uncertainty but inequity, as welfare benefits provided to workers in large companies are greater than those given to workers in small and medium-size firms. Never having experienced the consequences of welfarism, South Korean conservatives raise their voice against the expansion of welfare services, denouncing the “English disease” or “European disease.” Whereas the neoconservatism of the West arose from the failure of the welfare state, South Korean neoconservatism seeks to preempt the introduction of social services. However, the failure of the welfare state is the failure of the state—due to the inefficiency of bureaucratic politics—not the intrinsic failure of the principle of welfare democracy. This principle is the only way to protect citizens from the vagaries of the market because welfare is a kind of “social wage” that can be paid without participating in the market.63 In the midst of a profound economic crisis with record-high levels of unemployment, social welfare needs in South Korea are more manifest than ever. If democracy is to be consolidated, welfare must be provided, but the conventional idea that welfare must be provided by the state should be revisited. In the West, the enormous growth of state apparatuses and welfare bureaucracies and welfare bureaucrats did not maximize citizen welfare but the private welfare of welfare bureaucrats. As a consequence, society as a whole suffered what Gary Becker calls “deadweight losses.”64 Policy innovation should separate the design of welfare provision from its implementation. The state should devolve some authority for welfare services to organized civil associations. If the level of welfare is decided by compromise between organized labor and capital, they will both try to link the level of welfare with increased productivity. Once the level of welfare is decided, the state should provide the bulk of the funding. However, the implementation should be provided by private firms, which are more likely to deliver it efficiently, and by civil associations, which in the United States have proven to be an effective alternative both to the privatization of welfare, which can cause market failure, and to state welfare collectivism, which can lead to

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bureaucratic “state failure.” Currently, an estimated 1 million nonprofit organizations exist in the United States, which account for one-tenth of gross national product (GNP).65 A key reason why the United States has been able to maintain democracy despite severe inequality and an inadequate state welfare system lies in the civil movements led by nonprofit organizations. In South Korea, such civil input of welfare provision has not yet emerged. Both the state and business favor the Japanese model of company welfarism. But because company welfarism is primarily based on the profit motivation of firms, it does not satisfy welfare’s fundamental objective of providing shelter to the victims of market competition. South Koreans may have to preserve the virtues of family welfarism, which is based on spontaneous solidarity among family members. But as societies become more complex and industrialized, traditional, small, community-based welfarism tends to become weaker. The alternative is to realize the virtue of community at the level of intermediary civil associations. However, the pursuit of narrow regional and group self-interest since the democratic transition warns us that South Korean civil associations lack civic virtues and so far exhibit little interest in advancing the wellbeing of society as a whole. Moreover, when an entire economy descends into a crisis as severe as the one that South Korea experienced in 1997, only the state can meet the scale of need for certain types of relief, such as the expansion of unemployment insurance, provision of social assistance for the poor, and job training. Economic Globalization and the Autonomy of Global Firms South Koreans, too, live in the era of economic globalization, “in which capital, production, management, labor, information and technology are organized across national boundaries.”66 Yet the impact of economic globalization on democratic consolidation in South Korea is double-edged. On the one hand, globalization, with its emphasis on competitiveness, can facilitate democratic consolidation in some respects. Injecting the spirit of competitiveness into politics makes the state more efficient, competitive, flexible, adaptable, and accountable. The advent of the information society provides citizens greater access to information and thus more opportunity to engage and monitor the state. “Glocalization” (globalization plus localization)67 accelerates the devolution of power from the central to the local government.68

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Yet “forced to be competitive” does not always translate into “forced to be free.” Globalization also has negative impacts that render democracy vulnerable. One is the loss of sovereignty. Feasible democratic control mechanisms do not exist to force global actors to be accountable to and responsible for the people they employ and affect, because the decisions of global actors are mostly made beyond the control of the state and the people in any given territory.69 Because global firms can shift investment and operations to a more favorable investment climate, it is very hard to force them to be accountable through elections for such actions as environmental destruction and violations of workers’ rights. In the era of globalization, the ability of elected national leaders to ensure social welfare and security is also quite limited because of their lack of control over the decisions of transnational firms, the movement of ideas and persons across their borders, and the impact of their neighbors’ policies.70 The ability of government to pursue development, full employment, or other national economic goals has been undermined by the sovereign power of capital. As a consequence, the power of individuals and communities to shape their destinies through participation in the democratic process has diminished. Charles Lindblom has concluded that “the major institutional barrier to fuller democracy may therefore be the autonomy of the private corporations.”71 In South Korea (and other developing democracies), the autonomy of transnational firms also makes democracy vulnerable. Second, the global race to the bottom will likely delay the emergence of welfare democracy in South Korea. Employers use the threat of “foreign competition” to hold down wages, business taxes, and environmental protections. This threat also gives government a justification to cut education, health, the social safety net, and workers’ rights in order to reduce the burden on businesses that compete globally. Third, the advent of the information society can threaten as well as empower civil society. The dark side of the information revolution is that it intensifies the centralized control of information and thus can seriously constrain individual liberty. Although the information revolution opens a new horizon for participatory democracy through diffusing knowledge and information globally, it also may produce a new “panopticon,” in which a tele-leviathan can monitor the people with unprecedented centralized control of information through powerful computers. Fourth, globalization will likely nurture the “bourgeoisie” rather than the “citoyen.” In the era of globalization, people’s identities are

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being constructed globally by the goods they consume. Global “commodity fetishism” impairs active citizenship by absorbing the individual in private, selfish interests. When this fetishism overtakes citizens, too few dedicate themselves to the pursuit of the common good, which is an important foundation of a vibrant democracy. External Security Vulnerability The unstable, volatile security environment in Northeast Asia generates another external source of vulnerability for democracy in South Korea. The democratic transition in South Korea came at a favorable “world historical time.” The wave of democracy reached South Korea when the Cold War was receding, permitting the new democratic government to cut defense spending to help finance expanding welfare programs. 72 Yet the Cold War did not end on the South Korean peninsula, which is one of the areas of the world where a major war is most likely to break out. Indeed, it is amazing that South Koreans managed a democratic transition in one of the most militarized areas of the world. It is still vulnerable to aggression from North Korea, one of the last remaining socialist countries to resist both economic and political liberalization. In fact, during the late 1990s insecurity on the peninsula heightened as North Korea experienced a staggering famine and signs of growing instability and disarray while developing weapons of mass destruction. The deep internal crisis of North Korea threatens to destabilize democracy in South Korea. The worst scenario would be military aggression from the North. The second Korean War would destroy the political and economic gains made by South Koreans, even though South Korea would prevail eventually even without U.S. support.73 A second Korean War would increase the possibility of at least a temporary military resumption of power or a sharp increase of military influence in politics. The eventual demise of the North Korean regime and the ensuing unification process would also destabilize democracy in South Korea. Whether they wish to or not, South Koreans will have to bear the huge costs of unification. Large numbers of immigrant workers from the North would exert enormous downward pressure on wage levels in South Korea. South Korean farmers would suffer from the inflow of low-priced agricultural products from the North. The financial and political costs of aiding, absorbing, administering, and reconstructing the North would also be enormous. Although costs would be diffused widely to every social sector, the benefits would

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be concentrated among big business. After unification, big business in South Korea would certainly find a new source of labor, land, and markets. This uneven distribution of costs and benefits of unification would likely intensify conflict among social groups, sectors, and classes in the South. In addition, the vast difference in development levels between North and South would give rise to a new source of intense regional conflict. In a unified Korea, North Koreans would likely become second-class citizens, and a kind of “internal colonialism” would emerge. The ensuing distrust and animosity between North and South Koreans would be much more severe in intensity and more extensive in scope than currently existing regional animosity between the Cholla and Kyongsang provinces.

FROM BLESSING TO IMPEDIMENT: THE AMBIVALENT ROLE OF THE ECONOMY Before the onset of economic crisis, the economy had been a primary source of South Korean optimism about the prospects for democratic consolidation. It acted as the bulwark against the forces of authoritarian subversion and bolstered the fragile new democracy, which had been burdened with uncertainties, shifting interests, risks of reforms, a contagious “street parliament,” and nostalgia for the authoritarian past. For the last half century, South Koreans transformed one of the poorest economies in the world into an economic powerhouse. Per capita income rose from $103 in 1963 to more than $10,000 in 1995. South Korea is the eleventh-largest economy and thirteenth-largest trading country in the world. South Koreans accomplished this spectacular economic growth without seriously distorting equality or lowering the quality of life. With democratization, South Koreans achieved the rare feat of joining the prestigious club of advanced industrial democracies—the “First World.”74 Until 1997, the South Korean economy had performed well. Real gross domestic product (GDP) grew 8 percent per year in the 1990s, inflation was below 5 percent, and the unemployment rate was less than 3 percent.75 The savings rate was the highest among any Organization for Economic Cooperation and Development (OECD) countries. In addition, a “commitment to education, technologically advanced factories, a relatively egalitarian distribution of income, and an aggressive pursuit of foreign exports” were features of South Korea’s sound macroeconomic policy.76 However, the economic scene has changed dramatically since 1997. When the wave of East

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Asian financial crises that started in Thailand and Indonesia reached South Korea, the financial system melted down. On the brink of state default, South Korea avoided the worst scenario with the help of an International Monetary Fund (IMF) bailout. The financial crisis revealed the underlying weaknesses of South Korea’s economy. Many economists pointed out that the excessive investments of South Korean firms in risky and lowprofitability sectors were the primary causes of the economic crisis. Since the Park Chung Hee era, the South Korean economy has been dominated by chaebol (diversified industrial conglomerates). South Korean chaebol have been empire builders, maximizing market shares rather than profits. In order to outperform in sales, the chaebol invested heavily in various industries, mainly financing their investments through banks (which in turn borrowed heavily from abroad) because of the underdevelopment of securities markets. Overborrowing and overlending in the financial sector were possible because domestic banks perceived their operations as “insured” against adverse contingencies by the government. Chaebol thought the government would bail them out because their bankruptcy would be too severe socially and politically to endure. But the economic crisis that befell the country in November 1997 was much worse than anyone had ever imagined. On December 5, 1997, President Kim Young Sam had to accept harsh conditions in exchange for a huge emergency loan from the IMF. First as president-elect, shortly after that, and then as president, Kim Dae Jung has endorsed and faithfully complied with the terms of that agreement. Since the end of 1997, South Koreans have been engaging in comprehensive economic restructuring along the lines of neoliberal reforms required by the IMF’s standby program: tight monetary and fiscal policy, financial and corporate sector reform, trade liberalization, capital account liberalization, and changes in the labor market to increase flexibility. Now South Korean conglomerates are reorganizing corporate governance and structure, reducing their high debt-equity ratios by selling assets, cutting investments, and downsizing workforces. Financial institutions are also restructuring. Many financially troubled merchant banks were forced to shut down by government order, and others have been trying to recapitalize through mergers and acquisitions and the infusion of capital from abroad. South Korea’s democratic government has fared better than authoritarian governments such as Indonesia’s during neoliberal economic restructuring. Nonetheless, structural reorganization entails

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heavy transitional costs. It necessitates huge unemployment of capital and labor; within months of the crash, unemployment had doubled to 6.5 percent. Numerous firms went bankrupt, including eight of the thirty-largest chaebol in 1997 alone. The sweeping economic restructuring mandated by the IMF standby program will have a mixed impact on the consolidation of South Korean democracy. On the positive side, it will make economic and political life in South Korea more transparent and accountable. Rent-seeking networks between businesspeople and politicians will never again resemble those of the past. For the first time since the Park Chung Hee era, South Koreans have an opportunity to dismantle the iron triangle among politicians, businesspeople, and bank managers. Yet, the negative effects of the IMF program may overshadow the positive ones. South Korean workers are experiencing the gloomy reality of mass unemployment and an end to the system of lifetime employment, buttressed by high economic growth, that provided economic security for South Korean workers for three decades. Now South Korean workers are exposed to the destructive effects of economic restructuring without the shelter of a social safety net. Unless an adequate safety net is provided, or economic growth rapidly rebounds, unemployed workers may indulge in radical anti-IMF, antiAmerican, nationalist appeals and street actions. Militant, even violent protests could once again generate a repressive state response. Therefore, the future of South Korean democracy relies heavily on the leadership of Kim Dae Jung to minimize the duration and the costs of economic restructuring. When he took office in February 1998, he proclaimed a “democratic market economy” as the keystone of his presidency. His efforts to set up a tripartite social pact among labor, capital, and the state on sharing the costs of economic restructuring and to build up social safety nets for the workers who lost jobs in the wave of market-oriented reforms, while implementing faithfully and consistently IMF-mandated neoliberal restructuring programs, struck a needed balance between reform and relief.

CONCLUSION Unlike many new democracies in Latin America and Eastern Europe, South Korea’s new democracy is not in the process of protracted unconsolidation or in the process of authoritarian regression. Overall, the factors working for democratic consolidation are

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overwhelming the countervailing obstacles. Yet I will not go beyond expressing cautious optimism for the prospect of democratic consolidation in South Korea. From a comparative perspective, South Koreans are in a relatively more advantageous position than Latin American and Eastern European countries. Although in many countries, democratization unleashes movements for ethnic autonomy, South Korea, as the most ethnically homogeneous country in the world, does not have problems of national integration and territorial integrity. In contrast to the postcommunist Eastern European syndrome of “a weak state facing a weak society,” South Korea retains an effective state with a relatively efficient bureaucracy. Nonetheless, the process of democratic consolidation in South Korea is laden with many obstacles, vulnerabilities, constraints, and challenges. Even though elections have been institutionalized, political society is not yet sufficiently institutionalized to articulate and represent the will of the people in the electoral arena and then to realize the people’s will through accountable and responsive governance. Civil associations are not burgeoning enough to mediate between individuals and the state, to widen significantly the flow of information to the citizenry, to reduce the burden of overloaded political society, or to arrest the tendency of illegitimate usurpation of power and the tyranny of an intolerant majority. The constitution is not institutionalized enough to regulate the political and social life of citizens. The wave of economic globalization challenges popular sovereignty. And South Korean democracy labors under the constant threat of aggression or subversion from North Korea. Yet, we should not view these supportive and obstructive conditions in a deterministic way. Many of the conditions considered here have a double-edged nature. Such domestic and international, institutional, structural, and cultural conditions are not indefinitely fixed. “Enabling conditions” may turn into “confining conditions” and vice versa, and conditions interact with one another. A state that is too effective, for example, could work against democracy if it strengthens executive power over other representative bodies of government and suffocates the autonomy of civil society. There has even been a role reversal. The prosperous economy provided the material base for the emergence of a democratic transition coalition and played the role of bulwark against the forces of authoritarian subversion, but the sudden downturn of the economy has cast a big cloud over the prospect of democratic consolidation. A favorable environment for democratic consolidation can be created and the barriers to democratic consolidation can be removed by

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deliberate efforts of leadership and determined organization. South Koreans should not lament the absence of certain conditions for democratic consolidation or wait blindly for favorable conditions to mature. Rather, with innovative efforts, they should help to construct the environment for successful democratic consolidation.

NOTES 1. Terry Lynn Karl, “Dilemmas of Democratization in Latin America,” Comparative Politics 23 (October 1990): 1–23. 2. Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America (Cambridge: Cambridge University Press, 1991): 26. 3. Juan J. Linz, “Transitions to Democracy,” Washington Quarterly 13 (1990): 158. 4. Juan J. Linz and Alfred Stepan, “Consolidating New Democracies,” Journal of Democracy 7 (April 1996): 15–16. 5. Przeworski, Democracy and the Market, 26. 6. Guillermo O’Donnell, “On the State, Democratization and Some Conceptual Problems: A Latin American View with Glances at Some PostCommunist Countries,” World Development 21, no. 8 (1993): 1355–1369. 7. Larry Diamond argues for a “shift in political culture” to understand the process of democratic consolidation. To be consolidated, relevant actors’ commitment to democracy should be both “behavioral and normative.” For consolidation, there needs to be a transition from an instrumental and contingent commitment to a routinized, internalized, and principled commitment to democracy. See Larry Diamond, Developing Democracy: Toward Consolidation (Baltimore: Johns Hopkins University Press, 1999), pp. 65–66. 8. David Collier and Steven Levitsky, “Democracy with Adjectives: Conceptual Innovation in Comparative Research,” World Politics 49, no. 3 (1997): 430–451. 9. Larry Diamond argues that the commitment to democracy must not be confined to the elite level but encompass mass actors as well; “otherwise there will eventually emerge from the mass ‘politically significant’ counterelites and challenging movements that reject the rule of the democratic game.” Diamond, “Is the Third Wave Over?” Journal of Democracy 7, no. 3 (July 1996): 110–111. 10. Terry Lynn Karl and Philippe C. Schmitter, “Modes of Transition in Southern and Eastern Europe, Southern and Central America,” International Social Science Journal 138 (May 1991). Schmitter warns that tensions may exist between transitology and consolidology. According to Schmitter, the “enabling conditions” that were conducive to reducing and mastering the uncertainty of the transition may turn into “confining conditions” that can make consolidation more difficult. Philippe C. Schmitter, “Transitology: The Science or the Art of Democratization?” in Joseph S. Tulchin (with Bernice Romeo), ed., The Consolidation of Democracy in Latin America (Boulder: Lynne Rienner, 1995). He argues that for a new democracy to be consolidated, accidental arrangements, prudential norms, and contingent solutions that emerged during the transition should be transformed into “relations of

48

CONSOLIDATING DEMOCRACY IN SOUTH KOREA

cooperation and competition that are reliably known, regularly practiced, and voluntarily accepted by persons and collectivities (i.e., politicians and citizens) that participate in democratic governance.” Philippe C. Schmitter, “Interest Systems and the Consolidation of Democracies,” in Gary Marks and Larry Diamond, eds., Reexamining Democracy (London: Sage, 1992), p. 158. 11. Haggard and Kaufman call this mode of transition “the authoritarian withdrawal in good times.” Stephan Haggard and Robert R. Kaufman, Political Economy of Democratic Transitions (Princeton: Princeton University Press, 1995). 12. Hyug Baeg Im, “New Democracy and Structural Economic Adjustment: Economic Reforms in New Democracies,” in Doh Chull Shin, Myeong Han Zoh, and Myung Chey, eds., Korea in the Global Wave of Democratization (Seoul: Seoul National University Press, 1994). 13. Adam Przeworski, et al., Sustainable Democracy (Cambridge: Cambridge University Press, 1995), p. 64. 14. Hyug Baeg Im, “From Market Authoritarianism to Market Democracy: The Market and the State in the Korean Transition to Democracy,” paper presented at Sixteenth World Congress of IPSA, Berlin, 1994. 15. Hyun-Chin Lim and Byung-Kook Kim, “Labor and Democratization in Korea: A Search for a Social Pact,” in Doh Chull Shin, Myeong Han Zoh, and Myung Chey, eds., Korea in the Global Wave of Democratization. 16. Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (New York: Beacon Press, 1944). 17. Hyug Baeg Im, “Politics of Democratic Transition from Authoritarian Rule in South Korea,” Korean Social Science Journal 21 (1995). 18. See Samuel P. Huntington, The Third Wave: Democratization in the Late Twentieth Century (Norman: University of Oklahoma Press, 1991); Donald Share, “Transition to Democracy and Transition Through Transaction,” Comparative Political Studies 19 (1987); Karl and Schmitter, “Modes of Transition”; Adam Przeworski, “Games of Transition,” in Scott Mainwaring, Guillermo O’Donnell, and J. Samuel Valenzuela, eds., Issues in Democratic Consolidation (Notre Dame: University of Notre Dame Press, 1992). 19. John Hall, “After the Vacuum: Post-Communism in the Light of Tocqueville,” in Beverly Crawford, ed., Markets, States, and Democracy: The Political Economy of Post-Communist Transformation (Boulder: Westview, 1995), pp. 86–88. 20. Byung-Kook Kim, “Ideology, Organization and Democratic Consolidation in Korea,” in Sung Chul Yang, ed., Democracy and Communism: Theory, Reality and Future (Seoul: Korean Association of International Studies, 1995), p. 369. 21. Ibid., 372. 22. Ibid., 373. 23. Ibid., 374–379. 24. South Koreans attend churches and Buddhist temples for pragmatic reasons such as praying for secular fortunes, not out of deep conviction in salvation after death. So it is not surprising that “Koreans change religions once or twice during their lives!” See David I. Hitchcock, Asian Values and the United States: How Much Conflict? (Washington, DC: Center for Strategic and International Studies, 1994), p. 15. 25. Byung-Kook Kim argues that the syncretization of religions impedes democratic development in South Korea by depriving party politics

SOUTH KOREAN DEMOCRATIC CONSOLIDATION

49

of one major basis of cleavage, church versus the state, and helping to generate an organizationally amorphous politics. In addition to Chapter 3 in this volume, see Byung-Kook Kim, “A Journey Without a Vision: Politics of Democratic Consolidation in Korea,” Larry Diamond and Marc Plattner, eds., Democracy in East Asia (Baltimore: Johns Hopkins University Press, 1997). I have a different opinion. If transcendental and utopian religions had developed in South Korea, South Korea would have suffered from religious fundamentalism and dogmatism, the outcome of which would have been interreligious strife. 26. Sung Chul Yang, “An Analysis of South Korea’s Political Process and Party Politics,” in James Cotton, ed., Politics and Policy in the New Korean State: From Roh Tae Woo to Kim Young Sam (New York: St. Martin’s Press, 1995), p. 13; Young Whan Kihl, “Political Democracy and Reform in South Korea: The Cultural Context of Democratization,” in Sung Chul Yang, ed., Democracy and Communism: Theory, Reality and Future (Seoul: Korean Association of International Studies, 1995); Byung-Kook Kim, “Ideology, Organization and Democratic Consolidation in Korea.” 27. Huntington, The Third Wave, 310. 28. Kihl, “Political Democracy and Reform in Korea,” 459. 29. Francis Fukuyama, “Confucianism and Democracy,” Journal of Democracy 6 (April 1995): 25. And a renowned South Korean scholar aptly explains the Confucian tolerance of other religions: since Confucianism is not a religion with an organized membership, it is compatible with and complementary to other religions. Confucianism is the civil religion of South Korean society. Since it is not concerned with salvation, Confucianism and salvational religions like Buddhism and Christianity are not contradictory but rather complementary. Byong-ik Koh, “Confucianism in Contemporary Korea,” in Wei-ming Tu, ed., Confucian Traditions in East Asian Modernity (Cambridge, MA: Harvard University Press, 1996). 30. Kyung Dong Kim, “Confucianism and Capitalist Development in East Asia,” in Leslie Sklair, ed., Capitalism and Development (London: Routledge, 1994), p. 99. 31. Wei-ming Tu counters Huntington’s thesis that Confucian democracy is an oxymoron. The Confucian ideas of benevolent government, the dutyconsciousness of the elite, and the right of the people to revolution are all consistent with democratic demands for civility, impartiality, and public accountability. Wei-ming Tu, “Epilogue,” in Tu, ed., Confucian Traditions in East Asian Modernity (Cambridge, MA: Harvard University Press, 1996), p. 346. 32. Kyung Dong Kim, “Confucianism and Capitalist Development in East Asia.” 33. William de Bary goes even further, saying that classical Confucianism, too, espoused the virtues of democratic civil society, including “the benefits of free political discussion and open criticism of those in power,” and thus was compatible with democracy. William de Bary, “Confucianism, Civil Society and Human Rights in China,” in Marc Plattner and Larry Diamond, eds., Democracy in East Asia (Baltimore: Johns Hopkins University Press, 1997). Edward Shils, too, saw that some classical Confucian values are not only compatible with but indispensable to democratic civil society: even though Confucius was silent on the public sphere, public debate, the rule of law, legislatures, and the rights of individuals, the genuine civil virtues (or “civility”) of the Confucian gentleman-scholar such as trustworthiness,

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respect, flexibility, breadth, and tolerance would be indispensable for the development of democracy and civil society in East Asia. See Edward Shils, “Reflections on Civil Society and Civility in the Chinese Intellectual Tradition,” in Wei-ming Tu, ed., Confucian Traditions in East Asian Modernity (Cambridge, MA: Harvard University Press, 1996). 34. According to Byong-ik Koh, even though very few South Koreans declare themselves to be Confucian, “all men are Confucians” because the majority of South Koreans actually observe the basic Confucian rituals and subscribe to Confucian values. Byong-ik Koh, “Confucianism in Contemporary Korea,” 192. 35. Linz and Stepan, “Consolidating New Democracies,” 14. 36. Adam Przeworski et al., Sustainable Democracy (Cambridge: Cambridge University Press, 1995), p. 34. 37. Ibid., 64. 38. Adam Przeworski, “Studying Democratization: A Personal Postscript,” paper written as a postscript to the South Korean edition of Democracy and the Market. 39. John Kie-Chang Oh, “1995 Local Elections in Korea: Democratic Transition or Consolidation?” Unpublished paper, 1995. 40. Larry Diamond, Juan Linz, and Seymour Martin Lipset, “Introduction: What Makes for Democracy?” in Diamond, Linz, and Lipset, eds., Politics in Developing Countries: Comparing Experiences with Democracy, 2nd ed. (Boulder: Lynne Rienner, 1995), p. 46. 41. J. Samuel Valenzuela, “Democratic Consolidation in Post-Transitional Settings: Notion, Process, and Facilitating Conditions,” in Scott Mainwaring, Guillermo O’Donnell, and G. Samuel Valenzuela, eds., Issues in Democratic Consolidation (Notre Dame: University of Notre Dame Press, 1992), pp. 64–65. 42. Guillermo O’Donnell and Philippe C. Schmitter, Transitions from Authoritarian Rule: Tentative Conclusions About Uncertain Democracies (Baltimore: Johns Hopkins University Press, 1986). 43. Przeworski, Democracy and the Market. 44. Yang, “An Analysis of South Korea’s Political Process and Party Politics,” 23. 45. David Steinberg, “The Republic of Korea: Pluralizing Politics,” in Diamond, Linz, and Lipset (eds.), Politics in Developing Countries: Comparing Experiences with Democracy, 2nd ed. (Boulder: Lynne Rienner, 1995), p. 396 (both quoted passages). 46. Yang, “An Analysis of South Korea’s Political Process and Party Politics,” 20. 47. Byung-Kook Kim, “A Journey Without a Vision.” 48. Guillermo O’Donnell, “The Illusion of Consolidation,” Journal of Democracy 7 (July 1996): 41. 49. According to O’Donnell, whereas vertical accountability means democratic accountability secured by verdicts of elections, horizontal accountability means democratic accountability among democratically elected state agencies, that is, the capacity of state agencies to legally sanction unlawful and inappropriate actions by other state agencies. O’Donnell, “The Illusion of Consolidation,” 44. 50. Giovanni Sartori, “How Far Can Free Government Travel?” Journal of Democracy 6 (July 1995). According to Ergun Ozbudun, delegativism is not prevalent only under presidential systems. The Turkish experience suggests

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51

that the parliamentary system is not immune to delegativism. Ozbudun, “Turkey: How Far from Consolidation?” Journal of Democracy 7 (July 1996). 51. Przeworski, Michael Alvarez, José Antonio Cheibub, and Fernando Limiongi, “What Makes Democracies Endure?” Journal of Democracy 7, no. 1 (1996). 52. Przeworski, Democracy and the Market, 35. 53. Edward Shils, “The Virtue of Civil Society,” Government and Opposition 26, no. 1 (1991). 54. Alexis de Tocqueville, Democracy in America, ed. J. P. Mayer (New York: Harper and Row, 1966). 55. Robert Putnam, “Bowling Alone, Revisited,” The Responsive Community (Spring 1995), 20. 56. Larry Diamond, “Rethinking Civil Society: Toward Democratic Consolidation,” Journal of Democracy 5, no 3 (1994): 4–17; Philippe C. Schmitter, “Civil Society East and West,” in Larry Diamond, Marc F. Plattner, Yun-han Chu, and Hung-mao Tien, eds., Consolidating the Third Wave Democracies: Themes and Perspectives (Baltimore: Johns Hopkins University Press, 1997). 57. Gordon White, “Democratization and Development II: Two Countries’ Cases,” Democratization 2 (1995). 58. The terms “mobilizational civil society” and “institutional civil society” are borrowed from Marcia A. Weigle and Jim Butterfield, “Civil Society in Reforming Communist Regimes: The Logic of Emergence,” Comparative Politics 25, no. 1 (1992). 59. Schmitter, “Transitology,” 13. 60. Ibid. 61. Sunhyuk Kim argues, too, that civil society in South Korea had to adjust to consolidation politics by transforming themselves from “grand democracy movements” to “petty interest groups.” The recommended strategies for civil society in the consolidation stage are learning to tolerate; promoting diversity and pluralism; discarding a grand strategy for democracy and instead adopting the strategy of partisan interests; and learning to check, control, and influence, rather than resist, the state. Sunhyuk Kim, “Civil Society in South Korea: From Grand Democracy Movements to Petty Interest Groups?” Journal of Northeast Asian Studies (1996). 62. For the similar state of civil society in Eastern Europe, see Aleksander Smolar, “Civil Society After Communism: From Opposition to Atomization,” Journal of Democracy 7 (January 1996). 63. Gosta Esping-Anderson, Three Worlds of Welfare Capitalism (Cambridge: Polity Press, 1990). 64. Gary Becker, “A Theory of Competition Among Pressure Groups for Political Influence,” Quarterly Journal of Economics 98 (1983). 65. Peter Drucker, The Post-Capitalist Society (New York: Harper Collins, 1993). 66. M. Castells, “The Informational Economy at the New International Division of Labor,” in Martin Carnoy, Manuel Castells, Stephen S. Cohen, and Fernando Henrique Cardoso, The New Global Economy in the Information Age (University Park: Pennsylvania State University Press, 1993), p. 18. 67. Glocalization here means the simultaneous spread of supranational globalization and subnational localization. Globalization gives rise to supranational actors and norms and at the same time promotes the autonomy of subnational units.

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68. Hyug Baeg Im, “Globalization and Democratization: Boon Companions or Strange Bedfellows?” Australian Journal of International Affairs 50, no. 3 (1996): 282–283. 69. A. Belden Fields, “Can There Be Political Democracy Without a Democratic Economy? Is Democracy Possible?” Paper presented at Sixteenth World Congress of IPSA, Berlin, 1994, p. 15. 70. Philippe C. Schmitter, “Dangers and Dilemmas of Democracy,” Journal of Democracy 5 (April 1994): 63. 71. Charles E. Lindblom, Politics and Markets (New York: Basic Books, 1977), p. 356. 72. Tun-Jen Cheng, “Democratic Transition and Economic Development,” paper presented at the 5th International Conference on Korean Politics, Korean Political Science Association, Seoul, Korea. 73. Steinberg, “The Republic of Korea,” 406. 74. Since World War II, the countries besides South Korea to have entered the First World are Cyprus, Greece, Japan, Portugal, and Spain. Przeworski et al., Sustainable Democracy, 6. 75. Martin Feldstein, “Refocusing the IMF,” Foreign Affairs (March-April 1998). 76. Joseph Stiglitz, “Bad Private-Sector Decisions,” Wall Street Journal, February 4, 1998.

3 Party Politics in South Korea’s Democracy: The Crisis of Success Byung-Kook Kim

THE END OF AN ERA Democratic Consolidation By the late 1980s, South Koreans had finally realized their cherished dreams: economic prosperity, democratic electoral politics, and some sense of military security. Their nation had become “another Japan,” adding its name to the short list of non-European countries that had succeeded in modernization cum democratization. By any standard South Korea was a case of success. Or so its people thought—until the economic miracle came crashing down in 1997. The financial collapse of November 1997 and the subsequent economic depression have dealt a major setback to South Korea’s prosperity and self-confidence. But by the very scope of the shock they have dealt to society, they have underscored the stability of South Korea’s electoral democracy. Free and fair elections have become the only possible game in town1 to resolve conflicts over political power. Today, no significant political actor seeks or can imagine any other regime than electoral democracy for South Korea. The consolidation of electoral democracy was particularly rapid and strong under the presidency of Kim Young Sam (1993–1998).2 Upon assuming presidential powers, he launched the politics of reform. Provincial and local elections were reinstituted in 1993 after some thirty years of military dictatorship. The laws on political funds and public ethics were amended in order to check the corrosive influence of political corruption on moral integrity and South Korea’s international competitiveness.3 Civil liberties were also significantly 53

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widened and deepened, as an increasing number of societal groups acquired a new sense of rights and developed basic skills for political action. These changes had the potential to trigger a systemic alteration, transforming South Korea’s system of formal multiparty elections into a more responsive political regime that ensures all major societal actors a serious role in shaping national policy. The new laws for political funds and public ethics could in particular reduce inequalities in political resources among societal groups, and provincial and local elections could bring an enlarged political space in which individuals form new group consciousness, experiment with novel forms of political organization, and develop institutional channels for expressing their political values and socioeconomic interests. The most dramatic change, however, occurred in civilianmilitary relations. Kim Young Sam discharged generals and colonels of the Hanahoe (The Society of One) as he assumed presidential powers in spring 1993. The Hanahoe had been a major pillar of authoritarian rule before 1987, ready to back Chun Doo Hwan (1980– 1988) with a show of naked military force whenever a crisis of legitimacy developed, in return for the generous political patronage of public offices.4 Their purge created a vacuum in military leadership that Kim Young Sam filled with officers who had previously been excluded from strategic posts by Hanahoe generals. These men comprised an ideal group from which to build a new military leadership loyal to the principle of civilian supremacy. Being the direct beneficiaries of civilian rule and rivals to the fallen Hanahoe officers, the new military leaders saw their careers as intimately tied to the fate of electoral democracy. They became a willing instrument of Kim Young Sam during the uncertain years of democratic consolidation, squeezing out Hanahoe officers from strategic posts while maintaining a level of professionalism and discipline within the armed forces. The former military elites of the Fifth Republic (1981–1988) were, moreover, placed on trial for rebellion, subversion, and corruption in 1995. The trial dramatically raised public expectations of political accountability and laid a foundation for new political norms and principles: A military coup d’état would be neither forgotten nor forgiven. Its leaders and accomplices would eventually be prosecuted and punished for the crimes of sabotaging military discipline, subverting the constitutional order, and violating basic human rights. The personal fortunes amassed through public office would also be tracked down and seized by the state. Under the new South Korean system of government, the law should rule and justice prevail.

PARTY POLITICS

55

These are indeed noble words. However, their establishment as new governing norms and principles was not a politically easy task. The former military leaders of the Fifth Republic were from Taegu and North Kyongsang Province, the region that had formed a central part of Kim Young Sam’s winning coalition in the presidential election of December 1992. The trial accordingly sowed the seeds of disintegration for Kim Young Sam’s Democratic Liberal Party (DLP), as it was perceived in parts of Taegu and North Kyongsang Province as a maneuver to end the political hegemony they had enjoyed in South Korea since Park Chung Hee, another native of theirs, seized power through a military coup in 1961. The trial of the former military rulers by their erstwhile political ally also raised serious questions about Kim Young Sam’s personal character. Many came to see Kim Young Sam as a Machiavellian prince, joining forces in 1990 with the heirs to authoritarian rule to forge a new winning electoral coalition, but then pressing charges of mutiny and subversion against former presidents Chun Doo Hwan and Roh Tae Woo (1988–1993) only five years later, in order to protect himself from the growing public outrage over newly released evidence of their past wrongdoings. These were, however, signs of political realignment, not regime crisis, and disputes over personal integrity, not regime legitimacy. The trial unleashed a moral debate and polarized public opinion. For Kim Young Sam and his supporters it was a moral crusade, a “rectification of history” (yoksa baro saeuki) that would bring the final judgment on violators of human rights and civil liberties and establish a legal precedent for punishing coup leaders. In contrast, critics focused on Kim Young Sam’s own personal integrity, denying the moral superiority of the judge over the judged. What was not debated, however, was more important than what was debated. Political forces neither raised the specter of a military backlash when Kim Young Sam purged the Hanahoe and jailed the coup leaders nor openly defended Chun and Roh. No one disputed that the military mutiny (1979) and subversion (1980) they committed were crimes that needed to be brought to justice. Electoral democracy had, in short, become secure in South Korea. A military coup d’état was no longer conceivable; elections had become free, fair, and highly contested; and basic civil liberties were guaranteed. The “reserved domains” of military power also disappeared, and elected officials increasingly exercised effective control over agenda formation and policy formulation. Even the wrongdoings committed during authoritarian rule could be brought to justice without a threat of military reaction. The political regime

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of South Korea had, in other words, acquired three ingredients that made it a polyarchy: a high level of opposition, a large volume of participation, and an effective guarantee of human rights and civil liberties.5 The regime of free, fair, and highly contested elections had gained deep and broad loyalty from all major political actors. Party Politics in Chaos The “quality” of politics is, however, another story. Electoral democracy had brought only a quantitative increase in political participation and opposition. There were merely more people more openly engaged in struggles for political power and policy influence. The media established itself as South Korea’s effective “fourth branch” of political power, while interest groups and civic organizations proliferated into new social and economic issue areas.6 The highly personalized clientelistic networks formed within and around state bureaucracies and political parties also became more complex and fluid in structure, with their multiple focuses of loyalty frequently shifting, as more people more openly joined struggles over state resources and policies. The consolidation of electoral democracy had, in short, brought two significant changes in South Korean politics. Political society had rapidly expanded in size with the entry of new actors. It had also become internally more diverse. This expansion and diversification would have been a solid basis for building a well-functioning pluralistic political regime, had there been a concurrent strengthening of aggregative or integrative political institutions, in particular, political parties. However, just when political society was becoming more active and diverse, with the entry of new organizational actors into politics, its central aggregative institution, political parties, found themselves in utter disarray. Charismatic leaders broke up political parties and entered new marriages of convenience, only to go through another round of divorces and remarriages a few years later, having failed again to draw a mutually satisfactory formula for power sharing within South Korea’s presidential system7 (see Figure 3.1). Indeed, during this period of consolidation of electoral democracy, the cycle of party mergers and breakups intensified.8 South Korea was following a lopsided and deviant path of political development: political society as a whole expanded and diversified, but the party system became even more incoherent and unstable and political society more fragmented and disorderly. The problem is fundamental. Since 1987, South Korean political parties have encountered profound difficulty in developing a political

NKP

DP

JP

DP

LP

1965

PP

shows party mergers or continuity

shows party splits

shows the direction of mergers or splits

NADP

1955

History of Major Political Parties 1975

DKP

DJP

DP

PDP

NKDP

UDP

NDRP

NDP

DRP

1985

NP

DP

DLP

1995

NPPb

NKPa

NCNP

Hannarad

ULD c

Notes: DJP (Democratic Justice Party); DKP (Democratic Korea Party); DLP (Democratic Liberal Party); DP (Democratic Party); DRP (Democratic Republican Party); Hannara (Grand National Party); JP (Justice Party); KDP (Korea Democratic Party); LP (Liberal Party); NADP (National Democratic Party); NCNP (National Congress for New Politics); NDP (New Democratic Party); NDRP (New Democratic Republican Party); NKP (New Korea Party); NKDP (New Korea Democratic Party); NPP (New Party for the People); NP (National Party); PDP (Peace Democratic Party); PP (Peoples’ Party); UDP (Unification Democratic Party); ULD (United Liberal Democrats). a. NKP merges with DP in 1997 before NPP’s establishment. b. Kim Dae Jung splits from DP and sets up NCNP (1995), which merges with NPP in 1998. c. Kim Jong Pil resplits from NKP (1995) and sets up ULD (1995). d. Rhee In Jae splits from Hannara (1997), sets up NPP, and merges with NCNP (1998).

KDP

1945

Figure 3.1

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CONSOLIDATING DEMOCRACY IN SOUTH KOREA

discourse that could aggregate diverse societal demands and interests into coherent programs, with clear priorities and consistent internal logic and in the process transform naked power politics into struggles over ideas, values, and public policies.9 In fact, they have acted in the diametrically opposite way. Political parties have consciously avoided taking positions on socioeconomic issues and have relied instead on the charisma of party bosses to mobilize mass support during elections. Even in the midst of an unprecedented economic crisis, this pattern persisted through the December 1997 presidential election (see Chapter 7). The consolidation of electoral democracy did not bring a qualitative improvement in politics. Political parties remained shallow and weak as institutions, unable to offer distinctive programs and incapable of developing a complex network of organizational linkages to interest groups in civil society. Elections were mere contests of personalities, not struggles over ideas, depriving the voters of their right to make rational choices about state policies. Herein lay a continuity in modern South Korean party politics. Its political parties had always been weak. The frequent changes in party names could not hide their striking similarities in organizational and ideological character. They were all “cadre” parties, failing to recruit an active mass membership and incapable of offering any distinctive overarching ideology or policy program.10 Such failure in turn sowed the seeds of perennial institutional instability. Neither organizationally checked by a constituency of mass members nor constrained and disciplined by ideological norms and principles, party bosses could break up, merge, and redivide political parties in pursuit of personal ambition. As was the case prior to the transition to electoral democracy in 1987, personalities thoroughly dominated political institutions. The opposition was, for example, thrown into a series of shocks and crises as Kim Dae Jung repeatedly modified his strategy for presidential election from 1987 on (Figure 3.1). Favorably judging his prospects for victory in a four-party race, Kim Dae Jung broke away from Kim Young Sam’s New Korea Democratic Party (NKDP) and established the Peace Democratic Party (PDP) in November 1987. When his rivals Kim Young Sam, Roh Tae Woo, and Kim Jong Pil joined forces and established a new ruling coalition, the Democratic Liberal Party (DLP), in January 1990, Kim Dae Jung made another sharp U-turn and prepared for his third bid for presidential power in 1992 by engineering a party merger of his own into the Democratic Party (DP). When it failed, he retired from politics but would soon have another opportunity for a political comeback when

PARTY POLITICS

59

a profound crisis of personal loyalty and confidence developed among his foes in spring 1995. The crisis proceeded in a typical “South Korean” way. President Kim Young Sam was in the middle of his term and became interested in finding a “safe” formula for the transfer of power scheduled for February 1998. The strategy he chose was a policy of generational change. Kim Jong Pil was removed from power, a group of Kim Young Sam’s younger protégés and confidants assumed key posts within the DLP, and new recruits filled in the posts of party delegates responsible for choosing the 1997 presidential candidate of the governing party. The DLP was, in short, becoming the party of Kim Young Sam. Caught in a network of delicate checks and balances and presiding over a body of “party delegates” recently recruited by Kim Young Sam himself, all presidential hopefuls for 1997 had to struggle jealously for his favor if they were to become the DLP presidential candidate. The president seemed to have found a safe formula for power transfer within DLP; he would ensure political continuity by having his own successor “nominated” as the DLP’s presidential candidate for December 1997. Such a consolidation of personal power over the nomination process, however, entailed a series of realignments in partisan relations that could endanger the DLP’s electoral bases. Kim Jong Pil, for one, rebelled against Kim Young Sam’s policy of generational change and established his own party, the United Liberal Democrats (ULD), in March 1995. Kim Dae Jung, however, came back from his brief retirement and took his faction out of the DP to form the National Congress for New Politics (NCNP) in August 1995. The two would, moreover, pledge to forge an alliance and work for a joint NCNP/ULD presidential candidacy in December 1997 (for further details, see Chapter 7). Cornered by Kim Jong Pil and Kim Dae Jung and shaken by the outburst of public frustration and anger over the past wrongdoings committed by Chun Doo Hwan and Roh Tae Woo, Kim Young Sam reacted by announcing his “rectification of history” in December 1995 and then renaming his governing party the New Korea Party (NKP) in February 1996. The consolidation of electoral democracy did not, in other words, become a period of institution building and organizational experimentation in party politics for South Korea. Political parties remained institutionally underdeveloped. They were personal instruments of powerful regional leaders, captive to their personal ambitions and shifting strategies, incapable of generating distinctive ideologies and policy programs, and organizationally isolated from interest groups in civil society. South Korean political parties

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CONSOLIDATING DEMOCRACY IN SOUTH KOREA

were “cadre parties,” scoring low on all dimensions of institutionalization: ideological distinctiveness, organizational linkages, and institutional stability.11 Beneath the institutional discontinuity of changing party names lay a profound continuity in personalities. Two men, Kim Young Sam and Kim Dae Jung, had decided the fate of party politics since 1987, using party mergers and breakups as personal instruments to build electoral coalitions to win presidential power. Possessing remarkably stable personal followings across elections (see Table 3.1), each could force his will on other politicians. A revolt of elected assemblymen was unthinkable because most voters identified with the charismatic leaders rather than political parties and would continue to give their votes to Kim Young Sam or Kim Dae Jung regardless of the political parties to which each belonged. The chaos in and irrelevance of party politics in policymaking has been a constant in modern South Korea. If any change occurred, it was the increasing institutional shallowness of party politics since South Korea began its process of democratic consolidation. The cycle of party mergers and breakups was, for example, dramatically shortened, in effect making every presidential election since 1987 an occasion for completely reshuffling the party system. The scope of partisan realignments also radically expanded, affecting all major political parties and bringing all possible combinations of party mergers. The year 1990 saw the heir to authoritarian military rule (Roh Tae Woo) forming an uneasy condominium with one of the opposition leaders (Kim Young Sam) who had been responsible for bringing down military rule three years earlier. The year 1996 similarly saw another victim of military rule (Kim Dae Jung) entering into an alliance with one of the 1961 coup leaders (Kim Jong Pil), which would then be consecrated in a power-sharing arrangement following the 1997 presidential election. Former enemies became allies, and former partners became enemies. Such change within continuity had numerous causes. However, I focus on only one, political culture—which influences how individuals and societal groups perceive, define, and diagnose issues and interests—in order to explain the overall continuity in South Korea’s party politics. Later I bring in socioeconomic and structural variables to help understand change and also try to identify the successful consolidation of electoral democracy and the failure to improve the quality of electoral democracy as different sides of the same coin. Those factors that facilitated the deep and wide legitimation of electoral democracy were the same factors that obstructed substantive improvement in South Korea’s party politics.

34.0 23.8 19.3 15.6

1988 Assembly Election 42.0 33.8 16.3

17.4

1992 Presidential Election

38.5 29.2

1992 Assembly Election 33.3 30.1 17.3

1995 Local Election

11.2

34.5 25.3 16.2

1996 Assembly Election

38.2 18.9

39.7

1997 Presidential Election

Source: Central Election Committee, Daetongryong seon’goe chongram (Overview of Presidential Elections); Kukhoeuiwon seon’goe chongram (Overview of National Assembly Elections), various issues.

36.6 28.0 27.1 8.1

1987 Presidential Election

Electoral Support for Major Political Leaders

Roh Tae Woo Kim Young Sam Kim Dae Jung Kim Jong Pil Chung Ju Young Lee Ki Taek Lee Hoi Chang Rhee In Jae

Table 3.1

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POLITICAL CULTURE South Korea’s “Doxa” What is South Korea’s political culture? How has it been responsible for the organizational and ideological difficulties of South Korean party politics? These are formidable analytic questions, for South Korea is a country with two different political languages, one used in open political discourse, the other concealed beneath overt words and actions. The duality arose from its tragic modern history. South Korea was colonized by Japan in 1910, became separated from the North by Americans and Russians in 1945, found itself thrown into a bloody three-year civil war with North Korea in 1950, and remained paralyzed economically until 1963.12 Few countries have experienced such a rapid succession of tragic and violent turns of history, a fact that has compelled South Koreans to search for the culprit for decades. Many in the end pointed their fingers at Confucianism. In their eyes, the traditional belief system was anachronistic, hindering flexible responses to international challenge and obstructing socioeconomic modernization. In open political discourse, that is, Confucianism was dead. It lost legitimacy as state ideology and was identified as a cause of Korea’s downfall during the modern era. U.S. hegemony following World War II and the Korean War precipitated a radical negation of South Korea’s own past and brought a profound crisis of self-confidence. Through extensive interactions with U.S. advisers and soldiers stationed in South Korea, a new image of history emerged. The West was judged superior. Only by learning its “way” was South Korea expected to guard national sovereignty and attain economic prosperity. The ideals of “wealthy nation, strong military” (bukuk kangbyong) could be realized only through wholesale cultural innovation, which in effect signified the creation of new South Koreans, imbued with and directed by Western scientific rationality. The republic was, in a word, a product of U.S. foreign policy. The Americans provided a nuclear umbrella, orchestrated an inflow of massive international economic aid, and constructed a complex transnational network of information linking South Korea with the scientific community of the West. The United States was its lifeline, supplying the military, economic, and scientific resources needed for state formation and nation building. The U.S. possession of all vital resources was, for most South Koreans, sufficient ground to believe in the superiority of Western values and methods. The “Western

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Way” was embraced completely as a cure for all of South Korea’s ills, an effective technical formula for economic growth and national security, and a new basis for building a “good” society, that is, an American-style mass-consumer society and a popularly based democracy. Liberal democracy and market capitalism became new state ideologies, a presidential regime was instituted, and societal actors became increasingly versatile in using the modern political rhetoric of liberty and equality. South Korea was behaving as if its political goal was to become a “small America” within Asia, and with this disappeared all prospects for Confucianism to recover its former glory. On the contrary, Confucianism became for many South Koreans something to be criticized, delegitimated, and dismantled. There should be, however, no confusion over the lasting legacies of Confucianism. Although Confucianism was dead as a state ideology, its influence on political understanding, culture, and behavior remained pervasive. The fundamental ontological assumptions of Confucian thought, in fact, constituted a type of “doxa” as defined by Pierre Bourdieu within South Korea’s political discourse.13 Doxa is a set of subjective principles individuals hold about human existence whose validity is seen as self-evident. Individuals see no need to articulate these principles explicitly since their validity is continuously reconfirmed through everyday social practices and rituals. Doxa lies beyond questioning, and from its hiding place it influences in covert ways how individuals perceive, define, and diagnose issues and make normative decisions. Understanding South Korea’s political culture requires a careful articulation of the unarticulated Confucian doxa, a look into its assumptions and principles that lie beyond questioning, and a reflection on what they imply for party politics in both ideological and organizational dimensions. The analytic focus on doxa reveals an unusual condition of party politics in South Korea. There existed a profound “misfit” between open discourse and culture.14 The Confucian tradition posited neither the atomistic ontology of the absolute individual (characteristic of social contractarianism of Western Europe) nor a world centered around an all-powerful, single God in charge of history, exerting his irresistible will on human beings (as in the case of European Christianity). The “Eastern Way” instead saw a human being as an intersubjective social being, whose self was defined in terms of particularistic human relationships with others,15 and also adopted an anthropocentric view toward human existence.16 Confucianism could in fact be conceptualized as a “religion” of this earthly life, worshipping the “family” as an ideal form of community and finding in its internal workings a formula for building a harmonious

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social order. The family was the natural moral order. Man was born into its hierarchically organized and asymmetrically woven nexus of interpersonal relations and could realize his full moral self only through the personal cultivation of norms and values embedded in consanguineous relationships. The virtues of benevolence (in) and charity (ja) were nurtured through his performance of fatherhood, and a sense of filial piety and fraternity (hyojae) was cultivated through his role as a son and a brother. The family was a place of ethical perfection, a “school” for raising the model man who saw the furthering of familial (communitarian) harmony as being in his own personal interest. The “whole” (family) was indivisible from its “parts” (individuals) in Confucian thought. The father acted in the interest of his family, which made obedience to his command a moral imperative. The concept of the family was, moreover, a conceptual device, a metaphorical description of human condition, whose spirit existed (or should exist) in all levels of human life. The village had its own fatherly elders. The state (gukka) was similarly a network of asymmetrical familial affection and reciprocity reproduced on a larger social scale. 17 The nation (minjok) was likewise conceived in consanguineous terms, as “the people of the same blood” (kyorae) or “the brothers from one Mother” (dongpo).18 A single law of nature was, in other words, posited to organize and govern all levels of human life. The monarch and the father were identical in role, building authority from a similar source (the virtue of benevolence), exercising it for an identical goal (the furtherance of community interests), and in the process projecting a similar image of the self (a paternal protector). The virtue of loyalty (chung) that the subject was to nurture was likewise the extension of filial piety that the son cultivated in his family life. Herein lay the distinctiveness of Confucianism. The individual lacked absolute sovereignty. He was a relational social being, always placed in mutually interlocking and interpenetrating positions with the others and conceiving his rights and duties in particularistic terms. That is, man performed multiple roles as a father, son, and brother, and each role implied a different set of rights and duties and required a different code of conduct (yae). Rights and duties were situation-dependent and position-related, which each individual would learn through practicing yae, a code of conduct that embodies the values and norms of Confucianism.19 The self was, in conclusion, constituted by specific positions and roles that an individual occupied and played within the expandable concentric circles of human relations (see Figure 3.2). The

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inner core of identity was defined by blood ties (hyolyon). The outer rim was national consciousness (minjok). The circles lying in between blood ties and national consciousness were constituted by school (hakyon) and regional (jiyon) ties. All circles had one common organizing principle. The asymmetrical familial reciprocity based on affection and benevolence defined what were one’s rights and duties in particular situations.20 Asymmetrical familial reciprocity was the underlying source of all virtues. The values of loyalty and sincerity (sin) encouraged in public life were the extensions of filial piety and brotherly love championed in family life. The virtue of benevolence was similarly the source of all authority and legitimacy. Being a religion of this earthly life, which found in the family the organizational principles of an ethical community, Confucianism could be categorized as a system of political thought based on an anthropocentric ontology. Human existence was found meaningful only in terms of interpersonal familial relationships in this earthly life. Each person was his or her own master, and politics was given the privileged status in social life, responsible for building the ideal community where all people’s basic needs were cared for, and where the human ethics (ilryun) based on asymmetrical familial reciprocity were meticulously observed by all its members.21 The family posited as the ideal social order of men was a community of practical needs as well as ethical solidarity, a conception of social order that endowed politics with two historical missions. The state should strive to build a community of plenty and care for the everyday needs of all people. It should also guard human ethics and Figure 3.2

The Concentric Circles of Self-Identity

Nation Regional Ties School Ties Blood Ties

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make itself an actual embodiment of asymmetrical familial reciprocity. These practical and ethical functions of politics did not conflict. On the contrary, an ethical life was possible only for those who had won freedom from socioeconomic misery and disorder.22 The paternal care of everyday needs itself was, moreover, a moral act embodying the Confucian norm of asymmetrical familial reciprocity. There were thus two impulses in Confucian politics. Oriented toward this earthly life, Confucian politics was pragmatic, identifying social order and economic prosperity as its ultimate tasks. Having deduced this goal of politics from the ontological assumption of social life as an ethical life based on asymmetrical familial reciprocity, Confucianism also had a tendency to engage in the rhetoric of a moral crusade. That is, Confucian thought justified pragmatism precisely when it also affirmed the ethical character of politics.23 In fact, the Confucian ideal was a careful synthesis of practical and moral needs (sijungjido). A sage was aware of moral imperatives as well as situational needs. The model human being sought the universal ideals (kyong) within the boundary of constraints set by the situation (kwon). This state of the mind was the Middle Way (jung), not the mathematical midpoint between the kyong and kwon but a superior state of mind reached through a dialectical synthesis of ethical and practical knowledge.24 Religion and Class Such an anthropocentric familial ontology, modern South Korea’s doxa, had profound implications for party politics. The foremost was the political irrelevance of religion. Modern South Korea was a multireligious society, but its religions had been banished from politics by the anthropocentrism of Confucian familism and thus failed to become a basic organizing principle of party politics. The religions of South Korea neither fought among themselves as orthodoxies and heresies nor joined forces together against their common “enemy,” the state, along the lines of the secular versus the spiritual. Religions were strictly a matter of individual preference to be practiced in homes, monasteries, and churches with the objective of gaining personal fortune (bok) in this earthly life. And projecting such a role for religions prevented the spiritual and secular realms of human life from coming into direct confrontation. In the humanist Confucian world, for example, there did not exist a well-developed conception of God. And in the shamanist world, gods existed to help humans to attain wealth (bu), longevity (su), a male descendant (ja), and honor (kwi).25 Buddhism and Christianity, which originally

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possessed a dichotomous, conflictive conception of this world versus the other world, body versus spirit, lost their ability to transcend, oppose, conquer, and transform the secular world through their syncretic interaction with South Korea’s native, anthropocentric belief systems of shamanism and Confucianism.26 The religions of South Korea, whether imported from abroad or inherited from the past, did not have a vision for the future that directly conflicted with the given secular reality.27 As a result, South Korea’s religions did not fracture and reintegrate politics along the line of church versus state, the way European religions did. The political culture of anthropocentric familism also discouraged the development of organized class politics. The expandable concentric circles of identity by definition placed all individuals and groups into one large family, sharing common bonds and interests and performing mutually interlocking and interpenetrating roles. In effect, this characteristic preempted the formation of deep social cleavages that permanently divide individuals into hostile blocs of “us” versus “them.” Instead of drawing lines of cleavage too deep and too wide for individuals to cross, South Koreans drew expandable concentric circles of the self and searched for common bonds with others. All were members of the family in one way or the other. The concentric circles of blood, school, and regional ties joined individuals of different class backgrounds.28 There always existed larger circles of social and ethical identity ready to reduce the sense of difference that individuals might have found among themselves within a smaller inner circle of social categories. The factor that most decisively delegitimated class as a basis for political action was, however, the Korean War (1950–1953). The communist regime of North Korea launched a military invasion in June 1950 and waged a bloody class war wherever its military advanced.29 The experience of the war left South Koreans permanently scarred and “color-blind,” unable or unwilling to distinguish social democracy from brutal Stalinism.30 For most South Koreans, the left was a force against human ethics (ilryun). It had denied the existence of familial harmony by waging a war against its southern “brothers and sisters.” And with such an image of the left frozen in the minds of South Koreans, the political fate of would-be leftists was sealed for good. Marxism, whether social democratic or Stalinist, could not recuperate its strength after the Korean War.31 Its adherents were isolated from the rest of political society, and any sign of their reorganization into a political force, however minor, precipitated rage from the state. Most South Koreans supported or at least acquiesced in this ideological repression.

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The resultant political society could hardly differ more from that of Western Europe historically. The two lines of cleavage that structured Western European party politics were missing or underdeveloped in South Korea.32 Religion was irrelevant in politics, and class had lost legitimacy as a basis of political action. The sentiments of distance that individuals held toward those of different religious or class backgrounds did not develop into mutually exclusive programs of organized political action, because no ideologies existed to affirm those sentiments of distance and link them with a higher purpose, such as the remolding of society along religious or Marxist ideals. The sentiments of distance one felt toward the other remained just that, diffusely felt sentiments of difference, neither directed by a clear programmatic purpose nor backed by an effective organizational capacity. This does not imply, however, that South Korea’s civil society remained without organization. On the contrary, as Kyoung-Ryung Seong writes in Chapter 4, civil society became internally diverse, as more people more openly began struggling for political influence with democratization in 1987. Interest groups multiplied in number, and civic organizations proliferated into new social and economic realms. The absence of transcendental religions and class consciousness, however, meant that the entry of new societal actors occurred without a concurrent strengthening of the institutions of interest aggregation (see Chapter 5). The society became divided into groups, but these groups did not coalesce into a broader, mid-level category (based on class or religion) because of the Confucian heritage. Naturally, the irrelevance of religion and class as a basis of mass organization and collective action was a double-edged sword for democratic consolidation. Because South Korea was spared religious and class conflicts, which often degenerate into polarizing, destabilizing mass mobilization between major political adversaries, its transition toward electoral democracy—once it got under way—could be relatively smooth, and the new electoral democracy could sink its roots rapidly. There were no political actors with sufficient organizational power and ideological will to question the legitimacy of elections and offer alternative ways to settle conflicts over power. The relative ease of South Korea’s transition toward electoral democracy, however, came with a substantial cost. Religious and class conflicts—if moderate in depth and scope—can be a powerful force for bringing qualitative organizational and ideological advances in party politics. They can provide the basis for organizing ideologically distinct parties, which ensure democratic accountability and

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responsiveness of elected officials, as in Western Europe. Indeed, the whole project of the Enlightenment began in Western Europe as a political struggle against the state, the church, and inherited wealth, forces that were perceived as obstructing human liberation and deterring the nurturing of autonomous, virtuous, and responsible citizenship. From alternative religions and class ideologies, in other words, were born the modern political discourses of liberty and equality. They provided the basic organizing principles of modern mass politics and generated a new vision of the future. South Korea was another story. Once electoral democracy was consolidated, the political irrelevance of religion and class made it a polity without a working idea of democracy. South Korea had no well-developed ideology or theory of democracy that could generate a continuous flow of ideas and agendas, justifying each as an integral part of its drive toward democracy and endowing individuals with a successively widened and deepened sense of political liberty and civil rights.33 The irrelevance of religion and class, in fact, deprived elections of their substance, of issues to be decided. After 1987, elections became the final arbiter of political conflicts, but South Koreans were unsure what were to be the objects of arbitration. And they were left without substantively distinctive or organizationally stable and coherent parties, much less an effective party system.

A CRISIS OF SUCCESS Democracy Versus Developmentalism The irrelevance of religion and class in party politics has been a constant in South Korea since 1953. The instability of party politics, however, has risen dramatically since 1987 (as was already shown in Figure 3.1). To understand why institutional instability worsened, a careful analysis of two historical changes is required. One is democratic consolidation itself, and the other is South Korea’s economic miracle. They made increasingly irrelevant the one ideological cleavage that had previously checked the powerful centrifugal forces inherent in South Korea’s familistic political society and had given its generically amorphous party politics a rudimentary form of organization: democracy versus developmentalism.34 South Korea was, in essence, suffering a crisis of political and economic success. The electorate could no longer be galvanized by a call for democracy after 1987. Economic growth had similarly become a way of life,

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always expected and seldom acknowledged as a product of South Korea’s political leadership. Democracy and development were no longer issues after 1987. Deprived of its historical organizing principle, South Korean party politics was thrown into a severe institutional crisis. Before 1987 South Koreans had goals to fight for. After the democratic transition South Korea became a land of Machiavellian power politics, with its political parties transformed into mere instruments of the personal ambitions of charismatic party bosses. Expediency alone ruled South Korea’s party politics after 1987. This crisis of success calls for a new analysis of South Korean political culture, an in-depth look into how South Koreans understand democracy. The consolidation of electoral democracy became a crisis of success in 1987 only because actors had developed before 1987 a purely procedural conception of democracy, defining it in terms of holding free and fair elections. In such a cultural context, the consolidation of electoral democracy would imply the disappearance of the objective of political struggle. That is, political society would lose a sense of direction once authoritarian rule was dismantled and replaced by electoral democracy. A polity with a more substantive understanding of democracy—identifying elections only as a free market of conflicting political ideas and beliefs about liberty and equality—would, by contrast, have a substantial agenda of reform for which to struggle even after the institutionalization of democratic elections. It would thus be more likely to experience an institutional development of party politics and progress in interest politics with the consolidation of electoral democracy. The actors here would have an ideological compass, distinctive philosophies of liberty and equality to define new agendas for political action. For them elections would be only a partial instrument for realizing these other goals of governance. South Korea, however, was a country without any substantive theory of democracy or alternative philosophies of governance. 35 Democracy stood mainly for free and fair presidential elections. What really needs to be explained, then, is not the institutional instability of party politics under electoral democracy after 1987, but how the shallow concept of democracy came to galvanize the masses before 1987 and then drive South Korea toward the decisive transitional year of 1987. Democracy was never really challenged as its state ideology and ultimate goal, even during the years of authoritarian rule.36 Dictators found themselves in the awkward position of justifying authoritarian rule in terms of political expediency, as a temporary measure for building a socioeconomic foundation for electoral democracy.

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The ideal of democracy derived its power from both historical and cultural factors. A product of U.S. foreign policy and a child of conflict with communism,37 South Korea embraced democracy as its state ideology not because of a belief in its intrinsic superiority but because of an acute sense of military insecurity and political vulnerability.38 There could be no other alternative. An explicit negation of democracy as its state ideology would have left South Korea with neither a national identity different from North Korea’s nor a foreign patron.39 The ruling elites of South Korea thus embraced democracy mainly on pragmatic or functionalist grounds, as an instrument for national survival. The functional understanding of democracy had perverse consequences for South Korean politics. Those words that possessed no substantive philosophical meaning were suddenly placed on the altar, and South Korea suffered from a McCarthyism of its own that condemned any criticism of capitalism and democracy as a subversive act aiding North Korea. Social criticism was silenced. The conceptualization of everyday concerns into philosophical issues of liberty and equality was discouraged. The word “democracy” became a shallow absolute, lying beyond conscious social criticism and political questioning. The historical situation of a struggle for national survival was in itself a powerful force in politics. Nevertheless, the consequence of this for politics would have been far less sweeping were it not for South Korea’s culture, which transformed pragmatism into a system of philosophical beliefs. The traditional ways of thought championed this earthly life, strove to relieve troubles of everyday existence, and desired a harmonious social order based on familial affection. This tradition included Confucianism but went beyond it. Shamanism made gods into mere instruments of earthly needs, and legalism defined politics simply as an art of maintaining social order.40 South Korea had been a land of pragmatism well before 1948, and this characteristic prepared South Korea to live on a functionalist diet after it found itself in a severe crisis of survival in 1945. Confucianism as a system of ethical principles also empowered South Korea’s rhetoric of democracy. Although South Korea at first accepted democracy as a mere tool for national survival, this functional justification was joined and later replaced by another kind of rationale, the product of a syncretic transformation of traditional concepts. That is, civil society slowly began to interpret modern political issues of legitimacy through what was already familiar—Confucian moralism—and in the process transformed the concept of democracy, understood as free and fair elections, into an ethical principle. Two key traditional concepts empowered electoral democracy:

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the Confucian norm of minbon held all power and authority to be derived from and based on the masses, and the principle of wimin meanwhile called for state elites to pursue the public interest and serve those masses.41 The source and beneficiary of state power were identical in South Korea’s Confucian discourses. The public had vested power in state elites for its own interest and expected state power to be used to construct a just and plentiful society. Herein lay a new basis for democracy in Confucian South Korea. The regime of free and fair elections slowly became a modern extension of the traditional ethical principles of minbon and wimin. The modern word “democracy” acquired a moralistic undertone, whereas the traditional ideas of minbon and wimin became a normative basis for modern electoral politics. South Korea had embraced democracy in its own distinctive way. The modern concept of liberty as it first appeared in the social contractarianism of Western Europe rested on a peculiarly individualist ontology. The people of South Korea did away with such a view of humanity and instead strove to build democracy on its own doxa of Confucianism. Such a partial and selective process of Westernization had strengths as well as weaknesses. The regime of electoral politics took root rapidly and extensively in South Korea as its people came to define free elections as a moral imperative, a concrete application of traditional concepts, but this reinterpretation did not make democracy substantively more developed. South Korea remained a society without structural or ideological bases to organize politics and transform elections into a contest of ideas and values. Herein lay another cause of the “easy” transition to civilian rule and electoral politics in 1987, and the “difficult” consolidation of modern party politics since then. Before 1987, the Confucianized concept of democracy threw authoritarian state elites into a perpetual crisis of legitimacy while empowering political dissidents and activists in three distinctive ways. It gave the dissidents and activists a vision, a constituency, and a coalition to endure harsh political repression. That is, the notion of democracy reinterpreted through a medium of Confucianism imbued political dissidents with a sense of mission as well as moral superiority and transformed parts of civil society into their loyal constituency. The Confucianized concept of democracy, moreover, allowed dissidents and activists of different colors to coalesce together and form a broad coalition against authoritarianism, precisely because democracy was essentially a procedural notion devoid of substantive or ideological meanings. The lack of substantive or ideological debates

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over what constituted democracy ironically eased South Korea’s transition toward electoral politics. However, once South Korea institutionalized a system of direct presidential elections in 1987 and restored civilian supremacy five years later, political society lost its sense of direction. There was no place for it to turn to in order to develop a new agenda and mission. While electoral democracy became consolidated, progress toward a deeper and more institutionalized system of organizing and aggregating conflicting interests and ideas stalled. Had there been a substantive theory of democracy, such as defining free and fair elections only as an instrument to realize human liberation, the consolidation of electoral democracy would have marked the beginning of a genuinely new era. But because South Koreans had a simple procedural notion of democracy that was quickly realized when elections became free and fair, party politics fell into chaos. The old cleavage of democracy and developmentalism disappeared, but no new line of ideological or interest conflict was drawn between major political forces. Instead, the forces of factionalism, personalism, and regionalism were freed of all political constraints. The Urban-Rural Gap The aggravation of institutional instability had socioeconomic causes as well. One was a rapid disappearance of urban-rural conflicts. The politics of modernization typically place farmers and city dwellers in an antagonistic relationship. Exposed to a steady inflow of modern ideas and freed from traditional networks of social control, city dwellers typically become a source of innovation. Farmers, in contrast, hold onto traditional norms and resent what is perceived to be urban decadence.42 The city and countryside, moreover, find themselves locked in a deep conflict over economic interests as state elites search for financial sources of modernization. The constraints on state elites are severe. The economy is resource-poor. The society lacks an autonomous mechanism of interest coordination and consensus formation. Such a historical condition of a late developer naturally tempts state elites to manipulate the market so as to transfer resources and income away from farmers to city dwellers, the newly emerging pole of growth and change. The history of modern South Korea before 1987 was exemplary. From 1960 on, politics became decisively “urban,” while its society remained “rural.” Following the 1960 “revolution” that toppled Rhee Syng Man from power (1948–1960), the regime of Chang Myon (1960–1961) showed all the strengths and weaknesses of thoroughly

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urbanized politics in an early phase of modernization. Then a young urban intelligentsia seized a strategic role in agenda formation and became a source of reformist energy. It called for an extensive purge of corrupt ruling elites and demanded a fundamental structural overhaul in all areas of life. Its message for South Korea was essentially ethical. In its view, the reality should reflect the rhetoric of democracy and coincide more closely with the Confucian concept of morality. Such an ethical project did not, however, generate productive and innovative reformist politics. The South Korean intelligentsia had only passions. Unable to formulate clear priorities and overwhelmed by untamed passions for a moral rejuvenation of South Korea, it instead precipitated a profound crisis of governance by mid-1961. What it needed was coalition building, but what it achieved was a total alienation of all major sociopolitical forces in South Korea.43 The subsequent military coup of 1961 may be seen as a revolt of the countryside. The coup leadership had a strong rural color and possessed a deeply ingrained distrust of urban political actors as promoting disorder and instability. To them, the city lacked selfdiscipline and was a prisoner of its own radical moralistic contentiousness. The urbanization of politics, if unconstrained, was judged to transform the instability of the city into a full-blown systemic crisis. This hostility toward urban values became more explicit when Park Chung Hee declared his Yushin Constitution in October 1972. The Yushin (1972–1979) was a classic case of the “Green Uprising,” à la Samuel Huntington. Park challenged the procedural concept of democracy that had taken firm root in the urban sector since the Korean War and openly justified authoritarian rule. He sold the Yushin as an instrument to realize economic prosperity, political stability, and military security in a new uncertain era of détente. In addition, Park adopted two economic strategies to recoup popular support lost by the turn to authoritarian rule. One was to develop heavy and chemical industries on a massive scale in order to maintain rapid economic growth. The other was a “New Village Movement” (samaeul undong) to improve rural life by providing price supports for agricultural goods and financial assistance for rural self-help programs. Rural support, nurtured through a careful manipulation of both cultural symbols and economic incentives, would acquire particular importance for Park Chung Hee as city dwellers became more critical of authoritarian rule and started to side with opposition parties en masse at elections after 1972.44 The overall situation, however, changed fundamentally in the decades following implementation of the Yushin Constitution. Since

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1987, elections have tapped into vastly different dynamics. The difference in partisan preferences between rural and urban actors practically disappeared, and politics became organized along regional lines. The electorate of a particular province, whether rural or urban, voted heavily to make its own leader a presidential contender. The Honam region (Cholla provinces) coalesced around Kim Dae Jung. The Yongnam (Kyongsang provinces) has lined up behind Kim Young Sam since 1990. Meanwhile, the smaller Chungchong supported its native son, Kim Jong Pil. What prevented elections from becoming simple demographic surveys of the regional distribution of population was the existence of cities and regions without their own leaders of national stature. They became the swing factor in elections. The city of Seoul in particular housed onequarter of South Korea’s population and became a “region” in itself, which decided elections by throwing its weight behind one or another political boss. The line of urban-rural cleavage had, in short, became blurred in two ways since 1987. A region with its own leader of national stature would put aside internal urban and rural differences and vote as a cohesive bloc in elections. The region without a leader would, in contrast, show a sense of independence and break away from its past pattern of electoral behavior. The predominantly rural province of Kangwon, for example, elected an opposition politician as its governor in 1996. In contrast, the city of Seoul sided with Kim Young Sam by voting a majority of his candidates into the National Assembly in 1996. Never before had Seoul thrown its weight behind South Korea’s ruling party. But then it shifted again in 1997 toward Kim Dae Jung, an opposition presidential candidate (see Chapter 7). The sudden dealignment in partisan preferences was caused by socioeconomic factors. Three decades of rapid and extensive industrialization had transformed South Korea into an urban society in its outlook. Although the agricultural sector still employed one out of five South Koreans in 1990, this percentage did not accurately show how much South Korea had been transformed both structurally and culturally. Between 1970 and 1991 the urban population had gone from 41 percent to 73 percent of the total.45 The countryside, moreover, had become fully integrated into national politics as massive investments in economic infrastructure and communications connected all sectors of South Korea as integral parts of a compact social system. The rural population was socialized into urban culture through centralized national networks of education and mass media. Furthermore, the countryside shared with urban dwellers a dense network of familial ties that made it difficult to cultivate an

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identity distinct from that of city dwellers. Those rural migrants to cities became carriers and transmitters of urban ideas and values back to South Korea’s rural residents. The countryside was, in other words, integrated into urban life in a physical sense and came to acquire urban contentiousness through its dense network of communications built on primary relations with city residents. Change also occurred in cities. Although city dwellers retained their contentiousness, after 1987 it was tempered by a newly acquired sociopolitical conservatism. Three decades of rapid and extensive modernization had transformed urban society into a relatively affluent middle class with vested interests. Hence, it tried to prevent an escalation of political conflicts that would undermine social peace, economic order, and prosperity. The process of modernization—compressed into a mere generation—had thus altered both the rural and urban “cultures” of South Korea and fostered a new consensus from two different directions. The countryside adopted a more urban outlook, whereas its urban counterpart became more restrained and tamed. The collapse of authoritarian rule in 1987, moreover, eliminated the one remaining issue that could potentially pit rural and urban residents against each other. Once South Korea instituted a regime of free elections and then elected a civilian to the presidency in 1992, the urban sector lost its political vision for change. It no longer possessed a national agenda that could incite reactionary backlashes from more traditional political forces. The urbanization of electoral politics after 1987 had a structural cause as well. A peculiar sequence of political events and historical shocks had made South Korea’s rural sector a structurally atomized and homogeneous society. The first was Japanese colonialism (1910– 1945), which destroyed all sources of power and authority of South Korea’s traditional ruling yangban (bureaucratized gentry or scholarofficial) class. Then came a period of reform and war that further strengthened the structural fluidity and amorphousness in the countryside. An extensive land reform was enacted in 1950 and transformed South Korea into a society of small, independent farmers. The Korean War that began six months afterward, on the other hand, denied former landlords an opportunity to transform themselves into an industrial and financial class and instead made South Korea a society entrapped in an equality of absolute poverty. The atomized countryside of South Korea would have been helplessly immobilized and totally excluded from national politics if it had been left to itself. What saved it from political enervation before 1987 were external forces that had an interest in mobilizing

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small farmers for their own distinctive purpose. Before 1987, the incessant search for social bases of authoritarian rule led a faction within South Korea’s political elites to carefully cultivate and institutionalize rural political support. However, the situation underwent a radical transformation after 1987. The consolidation of electoral democracy eliminated the one rationale for pursuing the electoral tactics of rural and urban polarization. After 1987, a political party could only have built political support among farmers by playing on rural and urban conflicts over economic interests. The mobilization of farmers on an economic basis did not materialize, however, for structural reasons. Export promotion was no longer a mere policy. It had been consolidated into a way of life based on a distinctive structure of social and economic power after three decades of successful implementation.46 The entire social system depended on a continued rapid expansion of exports for its own survival. International competition had become a norm within state policy networks and an organizing principle of economic relations. And from such a structure of export promotion rose severe constraints on the political and economic options of party bosses and state elites. The governing as well as opposition political parties could not side with rural interests in a clear and decisive fashion when a policy issue with a potential to stir up a severe urban-rural conflict suddenly arose. To favor farmers was to entrust South Korea’s political and economic future to a sector that was internationally uncompetitive. Here was yet another cause of South Korea’s “easy” transition to electoral democracy since 1987. There existed in South Korea (as in any other country with a significant division of population and economic activity between town and country) a structurally rooted conflict over resources between urban and rural actors. The conflict did not, however, become partisan and a source of party identity, for three reasons. The rural sector did not possess a cultural identity different from that of its urban rival, the countryside remained atomized in its social structure and unable to articulate its own policy interests in a coherent way, and outside political forces saw farmers more as a liability than an asset in their search for broad electoral coalitions. Thus they were reluctant to politicize rural-urban conflict over resources and build an identity as a rural party. These three factors eliminated the other line of partisan conflict—rural and urban cleavage—that had endowed South Korea’s weak and shallow party system with some semblance of order and stability before 1987, and with it disappeared one major source of transition difficulties in a democratizing South Korea. The party system was spared

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an Argentine-style clash of culture and interest between rural and urban dwellers. Left to itself, the atomized rural sector of small farmers became immobilized, with neither a distinctive vision for South Korea nor an organizational capacity to launch collective action. What facilitated democratic transition, however, became an obstacle for the institutional development of party politics after 1987. The obstacle was fundamental. A society must be first divided into distinctive blocs of dissimilar cultures or interests in order for an institutionally coherent and stable system of political parties to form and consolidate itself. Each bloc of culture and interest becomes a social base or a “hunted domain” of a particular political party and forces on the party a distinctive hierarchy of priorities in return for electoral support.47 Party politics thrives where social foundations of conflict exist. South Korea, however, followed a historical path of political development that blurred lines of normative and interest conflict and in the process placed party politics on an extremely fluid foundation. The cleavage between democracy and developmentalism became blurred as South Korea established a system of free and fair elections during an era of prosperity. The rural-urban division likewise lost its clarity once outside forces turned away from small farmers and assumed a hands-off policy toward chronic rural economic difficulties. These alterations since 1987, moreover, occurred within a peculiar anthropocentric cultural milieu of Confucian familism, which had made religion and Marxism powerless in party politics.

THE CONTRADICTION OF SOUTH KOREAN PARTY POLITICS South Korea was at a decisive moment in its history in 1987. A new political horizon opened up with the transition to electoral democracy. However, the party system was incapable of meeting the challenge of transforming electoral democracy into a more responsive and participatory regime. Even as new actors entered the political arena, parties remained weak and shallow, unable to formulate a coherent program of state policies from the often contradictory demands of societal actors. Party politics, in fact, lost its substantive content even more and became a game of power politics dominated by a few personalities. The bosses used party politics as an instrument of personal ambition and opted for mergers or breakups whenever the situation required them. The consolidation of electoral democracy ironically coincided with further institutional decay of party politics.

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With both religion and Marxism banished from politics, urbanrural conflicts blurred, and the cleavage between democracy and developmentalism softened, only Confucianism could supply key organizing principles of party politics after 1987. School ties remained important for cultivating social bonds among South Korea’s political elites. Meanwhile, regional ties—which had been partially submerged by the urban-rural and democracy-developmentalism cleavages—now fully surfaced and became the preeminent line of cleavage in party politics.48 Prior to 1987, regionalism fostered factionalism only within parties. That is, a party boss would typically build a dense interpersonal network of patron and client relations around his home province and use it as a springboard to construct an internally cohesive faction of his own within a political party. He would, however, respect interparty differences over the issues of democracydevelopmentalism and urban-rural conflicts and prevent intraparty factional rivalries from escalating to the point of breaking up the party. After 1987, the disappearance of these lines of political cleavage provoked an extensive realignment of political and social forces around regionalist sentiments. Kim Dae Jung broke his uneasy alliance with Kim Young Sam and transformed his Honam faction into the PDP. The main opposition party (NKDP), now left with only Kim Young Sam’s supporters (themselves recruited primarily from South Kyongsang Province), transformed itself into a new party (the Unification Democratic Party) in 1987. What had been a major basis of intraparty factional politics before 1987 became the central constitutive principle of political parties after 1987.49 Regionalism in South Korea was not, however, fertile ground for developing modern party politics. The problem was generic.50 South Korean regionalism arose from Confucian familism. That source, however, delegitimated its own product by positing the existence of a larger circle of familial bonds that transcended and dissolved regionalism. This outer rim was ethnic national consciousness. For South Korea’s ethnic nationalism, regionalism caused only unproductive internal discords and fissures. The culture of Confucian familism had, in other words, entrapped individuals in an internally contradictory identity. Voters would expand their concentric circles of identity from narrow blood or school ties toward broader regionalist sentiments when forced to choose candidates in elections. This act of voting based on regionalist sentiments was, however, judged to be illegitimate by the voters themselves. For they also felt ethnic nationalism, which depicted regionalism as an ethically unjustifiable prejudice. South Korean electoral politics was thus in a peculiar situation after 1987. The political parties stood on

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culturally illegitimate grounds and were simultaneously pulled in opposite directions at election time—by centrifugal regionalist sentiments and by centripetal passions of ethnic nationalism. All political parties nurtured regionalist networks of support, but none defended it as a legitimate principle of political organization. In fact, everyone demanded an end to regionalism. Regionalism in South Korea exhibited another peculiarity. Party votes in certain plural societies of Western Europe also tended to be unevenly distributed across regions. “Regionalism” there, however, merely reflected religious or class conflicts that by chance overlapped with territorial zones, as the people of a similar religious or class background formed a subsociety in a particular region and led a life insulated from other subsocieties. In such an internally compartmentalized plural society, regionalism possessed policy substance as well as organizational cohesiveness. The distinctive religions and class beliefs of a region would be represented by a particular political party and supply it with both a political agenda and mass electoral machines.51 South Korea was a different historical case. The anthropocentric cultural milieu of Confucian familism and the Korean War had deprived both Marxism and religion of mobilizational power and ideological potential. The regionalism of South Korea was strictly a Confucian cultural phenomenon, an amorphous sentiment of belonging without a specific program of policy action as well as a sophisticated mass organization. Herein lies the great misfortune of party politics in South Korea since 1987. The formal framework of electoral democracy became consolidated, but its political parties were utterly unable to develop a new viable “software” for running the “hardware” instituted since 1987. The political parties were formed around regionalism, which possessed neither ideological legitimacy nor policy substance. With this reality emerged a new era of political alienation and the danger that the entire project of democratization would fall into bankruptcy.

NOTES 1. Juan J. Linz, “Transition to Democracy,” The Washington Quarterly 13, no. 3 (1990): 158. For further elaboration of the concept of consolidation, see Juan J. Linz and Alfred Stepan, Problems of Democratic Transition and Consolidation: Southern Europe, South America, and Post-Communist Europe (Baltimore: Johns Hopkins University Press, 1996), chap. 1; and Larry Diamond, Developing Democracy: Toward Consolidation (Baltimore: Johns Hopkins University Press, 1999), chap. 3. 2. The concept of electoral democracy is elaborated in Diamond, Developing Democracy, pp. 8–10. The concept refers to formal or procedural

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democracy, analytically elaborated by Joseph Schumpeter earlier in Capitalism, Socialism and Democracy (New York: Harper, 1947), p. 269. 3. Kim Young Rae, “Jeongchi jakeum jaedoui byoncheon kwajeongkwa teukjing yeonku” (An analysis of the changes on the institutions of political funds), Hankuk jeongchi hackheobo 28, no. 1 (1994): 27–47. 4. Lee Jong Kak, “Jae oh konghwakuk kwonryokui p’uri hanahoe” (The power base of the Fifth Republic: The Hanahoe),” Sindonga (January 1988): 312–323. 5. Robert A. Dahl, Polyarchy: Participation and Opposition (New Haven: Yale University Press, 1971). Also consult Larry Diamond, Juan J. Linz, and Seymour Martin Lipset, Politics in Developing Countries: Comparing Experiences with Democracy (Boulder: Lynne Rienner, 1995), p. 7. 6. Lee Jeong Hui, “Hankuk i’ikjipdanui seon’geo jeonryak yeonku” (An analysis of the electoral strategy of interest groups in Korea), in Korean Political Science Association (KPSA), ed., Seon’geowa hankuk jeongchi (Elections and Korean politics) (Seoul: KPSA, 1992), pp. 317–344; Kim Sun Yang, “Jipdan i’ikui galdeungkwa jeongbu gae’ipae kwanhan bikyo yeonku: bogeon uiryo jeongchaek bunyaui uiyak bunop saraewa hanyak jojaekwon bunjaeng saraeui bikyo” (A comparative analysis of conflicts between interest groups and state intervention: The case of medical specialization in the policy area of health and medicine and the right to prescribe Chinese medicine),” Hankuk jeongchi hakheobo 28, no. 1 (1994): 375–402. 7. Mun Yong Jik, “Hankukui seon’geo jaedowa jeongdangjae: soseon’geokujaewa yang-dangjae” (The political party system and electoral laws in Korea: The majoritarian single-member district and the two-party system), Hankuk jeongchi hakheobo 29, no. 1 (1995): 253–260. 8. On the mergers and breakups of “progressive” forces in Korea, consult Lee Kap Yun, “Hankuk jeongdangjaeui ideorogijeok seongkyok” (The ideological character of the Korean political party system), Sahwaekwahak yeonku 2 (1993): 94. 9. Kim Byung-Kook, “Jeonhwankiui hankuk jeongchi: sangsangryokui bin’gonkwa minjuhwaui siryon” (Korea in political transition: The poverty of imagination and the trials of democratization), Gyegan sasang (Summer 1993): 41–63. 10. Lee Kye Hui, “Kwonwijuui jeongkwon haui yadang jeongchi yeonku (1967–1980): sinmindangeul jungsimeuro” (The opposition parties under an authoritarian regime (1967–1980): An analysis of the New Democratic Party), Ph.D. diss., Seoul National University, 1991, pp. 156–157; Kim Byung-Kook, “Mujeonghyongui simin sahwaewa jeongdang jeongchiui bungdangseong: bundan sidaeui jeongsinjeok sanghwangae kwanhayeo” (The amorphous civil society and factionalism of party politics: A note on Korean culture in the era of national division), in Han Bae Ho et al., Hankukui jabonjuuiwa minjujuui (Capitalism and democracy in Korea) (Seoul: Beopmunsa, 1991), pp. 221–240. 11. Han Bae Ho, “Ironjeok jeonmangeuro bon hankukui pabol jeongchi” (A theoretical forecast on Korea’s factional politics), in Asiatic Research Institute, ed., Hankukui jeontongkwa byoncheon (Tradition and change in Korea) (Seoul: Asiatic Research Institute, 1973), pp. 314–315. 12. Lee Wan Beom, “Migukui sampalseon hwaekjeong kwajeongkwa kue jeongchijeok uido” (The political intention and motive of the United States behind the division of Korea along the 38th parallel), Hankuk jeongchi hakheobo 29, no. 1 (1995): 147–193.

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13. Pierre Bourdieu, Outline of a Theory of Practice (Cambridge: Cambridge University Press, 1977), pp. 164–165. 14. Lee Hong Ku, “Banjayujuuijeok minjujuuiwa hankuk jeongchi munhwa” (Anti-liberal democracy and Korean political culture), in Sahwae gwahak yeonkuso, ed., Hankuk sahwaeui byondongkwa baljeon (Change and development in Korean society) (Seoul: Byommunsa, 1985). 15. Hahm Chai Bong, “Geundae sasangui haechaewa tongil hankukui jeongchi isang,” (The deconstruction of modern ideologies and political ideals of Unified Korea), in Kim Yong Ok, ed., Samguk tongilkwa hankuk tongil (The unification of the Three Kingdoms and the unification of Korea) (Seoul: Tongnamu, 1994), pp. 462–463. 16. Donald S. MacDonald, The Koreans: Contemporary Politics and Society (Boulder: Westview, 1990), p. 69; Hajime Nakamura, Ways of Thinking of Eastern Peoples: India, China, Tibet, Japan, ed. Philip P. Wiener (Honolulu: University of Hawaii Press, 1964). 17. Kim Seok Keun, “Chosun sidae kunsin kwan’gyeui etoswa kue teukseong” (The ethos of monarch-subject relations and their character in the era of Chosun Dynasty), Hankuk jeongchi hakheobo 29, no. 1 (1995): 95–124. 18. Rho Tae Don, “Hankuk minjokui hyongseong sikiae daehan geomto” (A review of the formative period of the Korean minjok), Yoksa bipyong 19 (Winter 1992): 1–24. 19. Jang Hyon Keun, “Sunja jeongchi sasangae itseoseo ‘yae’ui gineung” (The function of yae in the political philosophy of Sunja), Hankuk jeongchi hakheobo 26, no. 3 (1993): 23–45. 20. Bu Nam Cheol, “Chosun jeonki gunjukwon yujireul wihan inyom jeongchaekui teukseong” (The ideological policy of maintaining monarchical power in Chosun Dynasty: Its major characteristics), Hankuk jeongchi hakheobo 25, no. 1 (1991): 7–40. 21. Bu Nam Cheol, “Chosun yuhakjaka bulkyowa cheonjukyoruel baecheokhan jeongchijeok i’yu: jeong do jeonkwa yi hang roui saraereul jungsimeuro” (The political reason why the Confucian scholar-officials of Chosun attacked Buddhism and Catholicism: The cases of Jeong Do Jeon and Lee Hang Ro), Hankuk jeongchi hakheobo 30, no. 1 (1996): 89–106. 22. Yu Jeong Hwan, “Hankuk munhwawa jeongchi: yukyojeok jeongchi jilseoae daehan munhwaronjeok haesok” (Korean culture and politics: A cultural analysis of Confucian political order), Hankuk jeongchi hakheobo 29, no. 4 (1995): 57–66. 23. Jeon Jeong Hui, “Pak ji wonkwa pak kyu suui saronui bikyo” (A comparison of the theory of ‘sa’ between Park Ji Won and Park Kyu Su), Hankuk jeongchi hakheobo 28, no. 1 (1994): 237–256; Kim Han Sik, “Chosunjo yuhak jeongchi inyomae daehan jaejomyong” (A reanalysis of Confucian political ideologies of Chosun Dynasty), Hankuk jeongchi hakheobo 29, no. 3 (1995): 17–25. 24. Bu Nam Chol, Chosun sidae chilinui jeongchi sasang (The political philosophy of seven scholar-officials of Chosun) (Seoul: Sagyejeol, 1996), pp. 80, 105. 25. Yu Dong Sik, Minsok jongkyowa hankuk munhwa (Native religions and Korean culture) (Seoul: Hyundae sasangsa, 1978); Choi Gil Sung, Hankuk musokron (Shamanism of Korea) (Seoul: Hyungsol chulpansa, 1981). 26. Choi Jeong Ho, “Musasangui sahwae: kue naeryokkwa gujo” (A society without ideology: Its origin and structure), Gyegan sasang (Summer 1989): 8–55.

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27. Hahm Pyong Choon, “Religion and Law in Korea” and “Shamanism: Foundation of the Korean Worldview,” in Lee Hong Koo, Yang Seung Doo, Jeon Byung Jae, and Hahm Chai Bong, eds., Korean Jurisprudence, Politics, and Culture: A Collection of Essays and Articles of Late Hahm Pyong Choon (Seoul: Yonsei University Press, 1986), pp. 157–165, 318–320. 28. Kim Man Heum, “Hankukui jeongchi galdeungkwa kwonryok jawon” (Political cleavages and power resources in Korea), Hankuk jeongchi hakheobo 29, no. 3 (1995): 37–62. 29. Chang Mi Seung, “Bukhanui namhan jeomryong jeongchaek” (The occupation policy of North Korea in the South during the Korean War), in Hankuk jeongchi yeonkuhwae jeongchisa bun’gwa, ed., Hankuk jeonjaengui ihae (Understanding the Korean War) (Seoul: Yoksa bipyongsa, 1990), pp. 170–203. 30. Kim Hak Jun, “Haebangkwa bundanui jeongchi munhwa” (The political culture of liberation and national division), in Hankuk sahwaeui jeontongkwa byonhwa (Tradition and change in Korean society) (Seoul: Beommunsa, 1983), p. 307. 31. Son Ho Cheol, “Hankuk jeonjaengkwa ideorogi jihyong: gukka, jibaeyeonhap, ideorogi” (The Korean War and the ideological terrain: The state, the ruling coalition, and ideology), in Son, et al., Hankuk jeonjaengkwa nambukhan sahwaeui gujojeok byonhwa (The Korean War and structural change in North and South Korea) (Seoul: Geukdong munjae yeonkuso, 1991), pp. 1–27. 32. Seymour Martin Lipset and Stein Rokkan, “Cleavage Structures, Party Systems and Voter Alignments,” in Lipset and Rokkan, eds., Party System and Voter Alignment (Boston: Free Press, 1967), pp. 1–56; Ivan Vallier, Catholicism, Social Control and Modernization in America (New York: Prentice Hall, 1970). 33. Kim Kwang Woong, ed., Hankukui seon’geo jeongchihak (Theories on electoral politics of Korea) (Seoul: Nanam, 1990). 34. Cho Jung Bin, “Yukwonjaui yeoya seonghyangkwa tupyo haengtae” (The attitudes of voters toward governing, opposition parties, and voting behavior), in Lee Nam Young, ed., Hankukui seon’geo (Elections in Korea) (Nanam, 1993), pp. 49–65. 35. Sin Docheol and Choi Myung, “Hankukui minjuhwaae daehan gukmin jiji seongkyokae kwanhan josa yeonku” (An empirical analysis of popular support for democratization in Korea), Hankuk jeongchi hakheobo 27, no. 1 (1993): 137–157; Kang Jeong In, “Bosuwa jinbo: kue uimiae kwanhan bunseokjeok sogo” (“Conservative” and “progressive”: An analytic opinion on their meaning), Sahwaekwahak yeonku 2 (1993): 1–55. 36. Pak Gwang Ju, “Hankukui gukka inyomkwa hyonsil: jayu minjujuui inyomkwa gwonwijuuijeok hyonsilganui galdeung” (The state ideology and reality in Korea: The conflict between liberal democracy and authoritarian reality), Hankuk jeongchi hakhoebo 22, no. 1 (1988), p. 42. 37. Joungwon A. Kim, Divided Korea: The Politics of Development, 1945– 1972 (Cambridge: Harvard University Press, 1975). 38. James Palais, “‘Democracy’ in South Korea, 1945–1972,” in Frank Baldwin, ed., Without Parallel: The American-Korean Relationship Since 1945 (New York: Pantheon Books, 1973), p. 318; Jin Deok Kyu, “Migunjeong sidae jeongchi sahwaeui siminsahwaejeok hamuiseong’ae daehayeo” (The political society in the era of the U.S. military government in Korea: Its implications for civil society), in KPSA and Korean Sociology Association, eds., Hankukui gukkawa siminsahwae (Seoul: Hanul, 1992), pp. 116–148.

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39. Park Myung Rim, “Hankukui kukka hyongseong, 1945–1948” (State building in Korea, 1945–1948), Hankuk jeongchi hakheobo 29, no. 1 (1995): 196–220. 40. Yun Sun Gap, “Godae jungkukui jeongchijeok hyonsiljuui” (Political realism in ancient China), Hankuk jeongchi hakheobo 29, no. 4 (1995): 69–85. 41. Kim Myong Ha, “Jungkuk seonjin jeongchi sasangaeseoui cheonui seongkyok” (The character of T’ien in pre-Chin political thought), Hankuk jeongchi hakheobo 30, no. 1 (1996): 109–132; Lee Tae Jin, “Jeongjo: yuhakjeok gyemong jeoldae kunju” (King Jeongjo: A Confucian enlightened absolute monarch), Hankuksa simin kangjwa (A civic lecture on Korean history) (August 1993), pp. 77–78; Kim Byung-Kook, “Jeontongkwa hankuk bosujuui: gyehyokui damronkwa dilema” (Tradition and Korean conservatism: The discourse and dilemma of reform), in Baek Wan Ki and Sin Yu Keun, eds., Munhwawa gukka gyongjaengryok (Culture and international competitiveness) (Seoul: Bakyongsa, 1996), pp. 149–157. 42. Samuel P. Huntington, Political Order in Changing Societies (New Haven: Yale University Press, 1968). 43. Sungjoo Han, The Failure of Democracy in South Korea (Berkeley: University of California Press, 1974). 44. Cho Ki Suk, “Haprijok yukwonja modelkwa hankukui seon’geo bunseok” (The rational voter model and an analysis of elections in Korea), in Lee Nam Young, ed., Hankukui seon’geo (Elections in Korea) (Nanam, 1993), pp. 401–434. 45. Man Gap Lee, Sociology and Social Change in Korea (Seoul: Seoul National University Press, 1982); Hak Chung Choo, “Some Sources of Relative Equity in Korean Income Distribution: A Historical Perspective,” Korea Development Institute Monograph 7501 (December 1974): 1–50. 46. Kim Byung-Kook, Bundankwa hyongmyungui donghak: hankukkwa mexicoui jeongchi kyongjae (The dynamics of national division and revolution: The political economy of Korea and Mexico) (Seoul: Munhakkwa jiseongsa, 1994). 47. Consult Angelo Panebianco, Political Parties: Organization and Power (Cambridge: Cambridge University Press, 1988), pp. 3–32. 48. Kang Myung Ku, “Seon’geowa jiyok galdeung: kujohwa kwajeongkwa jiyeokjeok siminsahwae” (Elections and regional conflicts: The process of structuration and regional civil society),” Hankuk jeongchi hakheobo 27, no. 2 (1993): 77–98; Kim Jae Han, “Hankuk seon’geo yaecheukui bangbeopronjeok mosaek” (A search for a methodology to predict election results in Korea),” Hankuk jeongchi hakheobo 29, no. 1 (1995), p. 232. 49. Lee Sang Hwi, “Sipsadae daeseonaeseoh jiyeok kamjeongyi tupyo haengwiae michin yeonghyang: cheonbuk jiyeok yukwonjaruel jungsimeuro” (The effect of regionalism on the 14th presidential election: The case of voters in North Cholla Province), Hankuk jeongchi hakheobo 27, no. 1 (1993): 209–244. 50. Kim Byung-Kook, “Jiyeokjuuiwa jeongchi gaehyok” (Regionalism and political reform), in Park Sang Seop, ed., Saegaehwareul jihyanghaneun hankuk jeongchi (Globalization and Korean politics) (Seoul: Nanam, 1996), pp. 40–43, 54–57. 51. Arend Lijphart, Democracy in Plural Societies: A Comparative Exploration (New Haven: Yale University Press, 1977); Kenneth D. McRae, ed.,

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Consociational Democracy: Political Accommodation in Segmented Societies (New York: McClelland and Stuart, 1974); Peter Merkl, ed., Western European Party Systems (New York: Free Press, 1980); Scott C. Flanagan, “Models and Methods of Analysis,” in Gabriel G. Almond, ed., Crisis, Choice and Change: Historical Studies of Political Development (Boston: Little, Brown, 1973), p. 64.

4 Civil Society and Democratic Consolidation in South Korea: Great Achievements and Remaining Problems Kyoung-Ryung Seong

TRANSFORMATION OF THE STATE-SOCIETY RELATIONSHIP Broadly speaking, the state-society relationship in South Korea has changed dramatically since the democratic opening of 1987. During authoritarian regimes from Rhee Syng Man to Chun Doo Hwan, an almost omnipotent state based on overwhelming force had ruled over society without popular consent and controlled the lives of ordinary people quite firmly. After the popular uprising of June 1987, however, ordinary people began to organize and assert themselves, building a strong civil society that was able to democratize a highly authoritarian state and to constrain state actions within an explicitly defined institutional boundary. With this change, South Korean society was transformed from a passive and submissive (but intermittently rebellious) society to an active and assertive one. The most important factor that brought about such a fundamental social transformation was undoubtedly democratization. Unlike previous authoritarian regimes, a newly democratizing regime provided people with basic civil rights (freedom of thought, freedom of association, freedom of speech and expression, and so on, with some exceptions prohibiting activities and organizations that can benefit an enemy country, that is, North Korea) and political rights (voting, running for public office, and so on) denied or distorted in the past. This new situation created a safe public space in which South Korean people, without fear of possible retaliation from the state, could organize independent civil associations and 87

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movement organizations and thereby influence the state policies and limit state invasion of society. In this way, the democratic opening of June 1987, made possible by a rapidly growing civil society, in turn laid a secure institutional foundation upon which a strong, dynamic civil society could develop. Looking back at the authoritarian regimes of the previous decades, the importance of a newly emerging civil society lies in the fact that the imbalance between the so-called overdeveloped state and underdeveloped society came to be largely redressed. This could be done through active popular attempts at self-organization and through the efforts of various groups to achieve their common interests and values by influencing the state. In addition, the growing strength of civil society has changed the state-society relationship in a quite different way. During the high times of Chun’s military regime, from roughly 1983 to 1986, a few highly politicized groups composed of student and labor activists were extremely militant, whereas the general populace was generally silent and submissive. Student and labor activists sought to overthrow the Chun regime using all available means, including revolutionary ones. The state and military regime were simply considered as the enemy to be destroyed and replaced with a populist or socialist regime. Therefore, the state-society relationship was inherently antagonistic. As the democratic transition proceeded after June 1987, however, the relationship became much more peaceful and tolerant. What the state could do and how its power could be exercised was explicitly specified in the constitution and laws. Furthermore, civil society gained the legal right to exert its influence over the state within democratic institutional frameworks without relying on radical or noninstitutional means, and the state was required to be responsive to and responsible for the popular demands. Through democratic transition, therefore, an antagonistic state-society relationship has largely shifted toward one of peaceful coexistence. Keeping these fundamental changes in mind, I describe below what features of civil society since 1987 are new and important and examine how civil society contributes to the consolidation of a new democratic regime. Then I show what problems South Korean democracy faces with regard to the state, political society, and civil society. Finally, I discuss the distinctiveness of the South Korean case in comparative perspective and suggest some future imperatives for strengthening South Korean civil society.

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A NEW CIVIL SOCIETY It is incorrect to say that civil society did not exist in South Korea before 1987. This is the case because civil society, conceptualized as a set of independent associations (both civic and interest-based) and movement organizations pursuing common interests and values vis-à-vis the state and economy,1 began to emerge in the late nineteenth century when newly formed civic associations suggested alternative democratic visions for reforming the then enervating Chosun Dynasty and started to mobilize popular movements.2 After that period, South Korean civil society developed in reaction to Japanese colonial rule, to Rhee Syng Man’s personalist rule, and to the military rule of Park Chung Hee and Chun Doo Hwan. Therefore, it can be said that South Korean civil society slowly evolved for a long period in parallel with sociopolitical modernization and that it developed with the growth of independent civil associations to protect people from invading foreign or domestic state power and to democratize authoritarian rule. Seen in this way, it can be further said that South Korean civil society already contained the seed of democracy that would be fully realized in the late 1980s, although its influences had been relatively weak in the past. The collapse of the Chun regime owed heavily to the tremendous popular resistance organized by diverse civil society groups such as student activists, labor activists, and, more important, moderate political reformists with middle-class backgrounds. It was not simply due to the regime division into hard-liners and the soft-liners, as some political scientists argue.3 From late 1983 to June 1987, political protests against the Chun regime were so enormous that even that staunch regime could not maintain itself and changed its “hard-line strategy” of repression to a “soft-line strategy” of surrender and (forced) compromise.4 Thus, the democratic transition of South Korea resulted more from a rapidly growing civil society than intraregime division. However, the strength and influence of civil society that evolved prior to the “Declaration for Democratization” on June 29, 1987 (or the “June 29 declaration”) should not be exaggerated. There are two reasons for this statement. First, the density, scope, and level of civil society after June 29 have increased; it has become much thicker, wider, and better organized both vertically and horizontally than civil society before June 29. Second, the role of civil society has changed from antistatism and democratization of the authoritarian regime to reforming state policies and deepening and consolidating democracy. Let me now take up these two points in order.

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Resurrection of Civil Society Among other things, the growth of civil society after the June 29 declaration was remarkable in terms of the density of civic organizations. As Figure 4.1 shows, the number of newly founded civic organizations pursuing public interests (e.g., economic justice and environmental protection) has increased dramatically, from one during 1980–1984 and seven during 1985–1987 to twenty-five during 1988–1990 and twenty-two during 1991–1993. Although this number does not count all the civic organizations founded in the same period and does not consider any radical movement organizations engaged in struggle against the Chun regime, the growth pattern revealed in Figure 4.1 tells us much about the growth of civil society.5 Among other things, the rapid growth of civic organizations after June 1987 is quite a new phenomenon. Before June 1987, such public-oriented and civic organizations were very rare; those that did exist were largely protest organizations like student movement organizations, labor unions, and moderate political movement organizations working for democratization. Hence, the composition of civil society has changed drastically since June 1987. In addition, an upsurge of civil society has occurred after June 1987 thanks to the creation of a free, safe public space made available by democratic transition.

Figure 4.1

Founding of Civic Organizations by Year

Source: Institute for Population and Development Studies of Seoul National University, A Study of the Way to Activate Civic Organizations (Seoul: Report to the Department of Information and Public Relations, Government of Korea, 1993) p. 7.

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As the density of civil society increased, its scope also widened. According to one document,6 civil society today covers a variety of areas such as economic justice, environmental protection, welfare, women’s rights, traffic safety, the proper role of the press, consumer protection, decentralization and local democratization, electoral monitoring, environmentally sound agriculture, protection for foreign workers, educational reform, monitoring of state agencies, and so forth. 7 But the scope of associational activities of civil society does not stop here because there are numerous interest groups such as the capitalist associations, employer associations, labor unions, and other functional interest groups (e.g., farmers’ associations, fishermen’s associations, and so on). And a number of radical movement organizations still exist, such as National Association for Democracy and National Reunification, Korean Federation of Student Associations, and so on.8 Therefore, the scope of civil society has expanded tremendously since June 1987 to cover almost all the important areas of the political, economic, social, and cultural lives of South Korean people. The organization of civil society has also improved. First, civic organizations and interest associations were able to develop networks from the local and regional to the national level and vice versa. For example, the National Association of Teachers’ Unions started as a local union movement but soon organized at the national level. Conversely, the Citizens’ Coalition for Economic Justice (CCEJ), the most successful and powerful civic organization in South Korea since 1987, began to establish branch organizations at the local and regional levels, after having been organized by moderate reformers in the Seoul metropolitan area and then expanding to the national level. Furthermore, national associations working in diverse arenas tried to create an umbrella organization to coordinate sectoral activities of individual national groups and to devise common strategies to achieve general public interests, the best example being the South Korea Association of Civic Organizations, established in 1995 with the participation of fifty-four sectoral national associations (eight of them individual civic organizations). In addition to this type of cooperation at the national level, sectoral associations also cooperate at the local and regional levels. For example, the local branch of the CCEJ, the local branch of the National Coalition for Environmental Movements (NCEM), and purely local activist groups often form a temporary alliance to deal with environmental pollution or intervillage conflict (e.g., conflicts arising with regard to construction of a site for waste disposal). Thus, South Korean civil society since June 1987 has become densely populated, extensive in its coverage of issue areas, and

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relatively well organized both vertically and horizontally. These characteristics of civil society provide strong foundations upon which diverse civil associations (civic, interest-based, and movementoriented) formulate their agendas, exert influences over the state, and cooperate to achieve common goals, often organizing diverse types of social movements. Clearly, the potential of civil society to check and influence the state (and also private companies) has improved greatly. Restructuring of Civil Society In addition to the substantial quantitative changes above, South Korean civil society has experienced important qualitative changes. Roughly, three such changes can be identified. First, various civic organizations pursuing general and public interests have come to acquire moral, social, and political hegemony over the traditional interest associations (e.g., employers’ associations and labor unions) that seek to achieve narrow, special interests. As a recent survey shows, civic organizations working in diverse arenas are considered by ordinary South Korean people as the most trustworthy and influential groups in dealing with important public issues.9 The reason seems to be that whereas interest associations focus mainly on special interests with which only specific groups or classes are concerned, civic organizations focus more on the broader public and its concerns with the quality of life—issues such as environmental protection, corruption, welfare, efficient traffic control, educational reform, and crime control, which cut across class and sectoral concerns and were ignored or neglected during the protracted struggles against the authoritarian regimes. It was largely the ability of civic organizations to understand changing popular concerns accurately and to formulate them into major policy goals that enabled those civic organizations to gain hegemony over special interest groups. Civic organizations swiftly perceived that ordinary South Koreans were becoming much more concerned with concrete quality-of-life issues as democratization succeeded and their incomes rapidly grew.10 For example, the frequency of coverage of environmental issues by the six major South Korean newspapers increased exponentially with the transition to democracy (Figure 4.2). Such issues suddenly caught people’s attention as soon as the authoritarian regime ceased to exist.11 Civic organizations also came to acquire moral, social, and political hegemony over the radical movement organizations (especially student movement organizations and a few radicalized labor unions) because their radical agenda of transforming the capitalist

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Figure 4.2 Environmental Issues Covered by Six Major Newspapers Number of news stories

3,250 433

873

5,331

8,884 6,464

1,313

479 406 369 299 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 Source: Do-Wan Koo, “A Study of the History and Characteristics of Environmental Movements in Korea,” Ph.D. diss., Department of Sociology, Seoul National University, 1994, p. 56.

economy was roundly rejected by ordinary people as South Korean capitalism, now under political democracy, succeeded in combining relatively high levels of equity with high growth rates. In addition, for radical activists and ordinary South Koreans alike, the collapse of communist regimes after 1989 meant the disappearance of the socialist alternative. Thus, the ideological appeal and influence of radical organizations weakened very rapidly.12 Instead, such moderate and reform-oriented civic organizations as the CCEJ (founded in July 1989) ascended quickly, addressing deeply felt popular demands for economic justice and corruption control. In its inaugural meeting, the CCEJ declared that all the nonproductive incomes accruing from speculation in real estate and financial assets should be eliminated and that corrupt relations between political and economic elites should also be terminated. On the basis of this position, the CCEJ demanded specifically that a “real-name” system of bank account registration and real estate registration be adopted right away, publicizing its demand widely through public conferences, petitions, and press reports. This demand, though not adopted by the Roh Tae Woo government (1988–1993), was finally implemented by the Kim Young Sam government soon after it came to power in 1993. In this way, the CCEJ was able to link popular demands with its reformist goals and moderate strategy on the one hand and with the reform policies of the new democratic government on the other hand.

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One of the factors that enabled moderate, reform-oriented civic organizations to become preeminent in civil society was their close cooperation with the press. According to one study, the activities of the CCEJ were reported seventy times in great detail by the major newspapers during just one year, 1993.13 Another study found that the activities of the Citizens’ Coalition for Participatory Democratic Society (CCPDS), established in September 1994, were reported forty-nine times by the major newspapers in just four months, from September to December 1994.14 Unlike the radical movement organizations, moderate and reformist civic organizations have a strong social affinity with the press because group leaders have the same middle-class background as reporters for the major newspaper companies; thus, the two groups share similar political concerns (e.g., promoting democracy and moderate economic reform) and intimate social ties (e.g., attending same high schools or universities). Corresponding with these developments in civil society has been another significant change: the disintegration of the state corporatist system of interest intermediation, especially in the areas of business, labor, and agriculture. The authoritarian regimes from Park to Chun created and maintained a system in which “functional interests are monopolized by singular, compulsory, non-competitive peak interest associations, licensed and controlled by the state.”15 According to this scheme, interest associations were established with special state recognition, even with the special state laws: for example, the National Association of Business Owners, Federation of Korean Trade Unions (FKTU), and Central Association of Farmers’ Cooperatives were all created either with special state laws or with explicit state recognition.16 But the state corporatist system began to collapse as the democratic transition provided both members and nonmembers of interest associations with the right of free association. This was especially true in the case of labor unions, as the organizational monopoly of the officially sanctioned FKTU collapsed during the 1990s after vigorous mobilization by independent trade unions and labor activists (see Chapter 5 for details). To sum up, civil society after June 1987 has experienced a sweeping restructuring and reorientation. Civic organizations came to prevail over special interest associations seeking their own sectoral interests. Moderate, reform-oriented civic organizations also gained ascendancy over the radical movement organizations. Moreover, the state corporatist system disintegrated and has been replaced by a competitive, pluralist system. All these changes signify a qualitative break with the civil society that existed prior to June 1987. The

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predominance of the reformist civic organizations and the greater autonomy to be gained from the dismantling of the state corporatist system constitute new features of a restructured civil society.

THE ROLE OF CIVIL SOCIETY IN DEMOCRATIC CONSOLIDATION The most important contribution of civil society to the consolidation of democracy is the growth of civil society itself. The quantitative and qualitative developments in South Korean civil society make it impossible for any democratically elected government to abolish or suspend democracy in order to prolong its power. If a democratically elected government tries to do away with democracy, it will face a serious legitimation problem that will undoubtedly trigger vigorous popular resistance. South Korean civil society, now full of diverse independent civil associations linked both horizontally and vertically with each other, can frustrate any antidemocratic attempt because it has enough capacity to mobilize tremendous popular resistance across a wide range of social sectors and classes. The result would be the same if the military (or a politicized segment of the military) tried to wage a coup. When civil society was weak or underdeveloped (with a low level of economic development), the military was able to make a coup easily without facing strong resistance from society. But the current situation is absolutely different from that of 1961 or 1980. Civil society is now vigorous and elaborately organized; the economy is highly diversified and quite vital; and there are no fundamentally divisive social conflicts. Moreover, there is no alternative to democracy as a legitimate form of government. For these reasons, neither the government nor the military has ever attempted to abolish democracy since February 1988, when the democratically elected Roh government took power. It seems that civil society has grown strong enough to deter any attempt to overthrow democracy.17 Civil society also contributes to the consolidation of democracy through various efforts from below: practicing democracy internally, representing the underrepresented, and supplying political leaders to the parties and the government. If democracy is to sink deep roots, it is important for ordinary people to get habituated to democracy at the level of voluntary associations. Democracy will be fragile or superficial if people practice it only in the election booth. But increasingly, it is being used actively in a variety of other arenas in South Korea. Democratic principles and procedures are now applied

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in almost all the significant civic organizations, movement organizations, and interest associations. For instance, the CCEJ practices “committee democracy,” in which major decisions are made by the committee members and those decisions are implemented by fulltime or part-time staff.18 Of course, it is possible that staff members identify critical public issues, suggest proposals to the committees, and participate in committee meetings to explain their proposals. But the core principle of associational operation is that all the major decisions are made collectively by the committee members. In this way, internal democracy is practiced and institutionalized in the CCEJ, as well as in other civic associations like NCEM and CCPDS. With the democratic transition proceeding, it is quite striking that even those interest associations whose leadership selection and administrative activities had been controlled by the state became largely democratized. The best example of this type of change is the Central Association of Farmers’ Cooperatives. During the authoritarian era, its top executive had been appointed by the president, and the heads of the local cooperatives in turn had been chosen by the top executive from the candidates selected at the local level. But this undemocratic practice of leadership selection has been eliminated, and the association’s procedures have been fully democratized since 1990.19 Other associations, too, experienced internal democratization. Increased activities on the part of voluntary associations to represent those who had been underrepresented before also accompanied the growth of civil society. For example, the urban poor, handicapped, elderly, homeless, jobless, street vendors, battered women, children without parents, alcoholics, and other marginal groups were largely neglected by both the government and private organizations during the authoritarian era. As voluntary associations mushroomed with the democratic transition, however, new associations began to emerge to represent the rights and welfare of various social groups, and existing associations and organizations also began to pay more attention. Furthermore, businesses that had not been concerned with social welfare in the past began to spend more money for this purpose, usually by establishing corporate foundations.20 Thus, civil society came to provide a protective net for those neglected groups. Considering the immensity of unmet needs, the support from civil society is not entirely adequate. But the protection and representation of the socially weak by civil groups does help ameliorate suffering and press the government to be more responsive to the demands of the weak. This in turn encourages those marginal groups to remain within the framework of democracy. In

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this way, growing civil society engagement on behalf of the neglected enhances democratic legitimacy and contributes to democratic consolidation. Finally, an active, lively civil society also contributes to the consolidation of democracy by supplying leaders to political parties and government. Those who are involved in organizing and managing civil associations learn how to deliberate, coordinate, and represent the interests of their members or the general populace. They also learn how to organize collective actions to achieve common goals. Through these experiences, they come to acquire the habits of discourse, tolerance, and compromise. Therefore, political parties and government officials seeking to recruit new elites tend to look for them among the leaders of civil associations. The merits of those leaders are many: their sense of the public interest, their morality, their professional skills in organization and representation, their habits of democracy, and their popularity. After the democratic opening in June 1987, numerous civil leaders have been recruited in this way. In the elections for the National Assembly and for the local assemblies, they have been recruited as candidates by political parties (both ruling and oppositional). Sometimes, they have worked as advisers, bureaucrats, and local leaders of various parties. Furthermore, when the Kim Young Sam government was inaugurated in February 1993, many leaders of civil society began to work in the presidential office (the Blue House) and other governmental agencies. The pattern of presidential appointments and consultations from civil society continued after Kim Dae Jung assumed the presidency. This is quite a new phenomenon, in that political elites have generally been recruited in the past from the high ranks of the military, the state bureaucracy, business, and academia. Ho Keun Song argues that this vertical co-optation of its leaders has severely weakened civil society.21 Similarly with regard to postcommunist countries, Aleksander Smolar argues that nascent civil societies were “depopulated” when their leaders went to serve in the newly democratized governments or started their own businesses.22 In my understanding, however, South Korean civil society is not as weak as Song claims or as those in former communist countries because it has now built strong organizational and human resource bases. Therefore, civil society has not been damaged heavily or depopulated, even though many leaders took positions either in the political parties or in the government.23 Moreover, the Kim Young Sam government needed strong support from civil society because its comprehensive reform policies, ranging from anticorruption campaigns to labor reform, inevitably

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brought about strong resistance from vested interests. For these reform efforts, diverse civic organizations, movement organizations, and even the press helped immensely. Thus, many, if not all, reform policies of the Kim Young Sam government could be implemented effectively only with strong support from civil society. This type of cooperation, which can be called vertical cooperation (or coalition building) between civil society and the government, has laid a promising foundation for democratic consolidation while enhancing regime performance. But it should be noted that such vertical cooperation is not yet solid enough, as discussed below. A large number of problems still remain. Furthermore, unresolved conflicts and tensions accumulate, requiring creative solutions and more constructive cooperation between the government and civil society for consolidating democracy.

REMAINING PROBLEMS: LOW DEMOCRATIC INSTITUTIONALIZATION AND HIGH POLITICAL INSTABILITY Today, only a few in South Korea question the desirability and legitimacy of democracy in principle. All major political and social actors and most of the mass public believe that there are no alternatives to democracy and that democracy is the best form of government. In this sense, democracy is firmly consolidated at a general normative level. However, specific institutional issues like a better form of government (presidential versus parliamentary), the proper length of a presidential term (five years for a single term versus four years each for multiple terms), and the proper relation between the central and local governments (centralized versus decentralized) cause wide disagreements and tensions among political forces. In other words, the degree of institutionalization of South Korean democracy is not yet very high. Three factors seem to account for this dualism: the strong regional cleavages and institutional weakness of political parties, the tendency of South Korean democracy toward delegative democracy, and the internal weaknesses of civil society. Let me discuss each factor in order. As is well known in South Korea, one of the most destructive and divisive forces is regional cleavage. This cleavage developed in response to wide regional economic disparities, the continued political dominance of one region (Kyongsang) over others until recently, and political manipulation and amplification of regional conflicts by political elites.24 Thus, it affects almost every aspect of the

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social, economic, and political lives of South Korean people: choice of marriage partner, recruitment and promotion of employees in firms, support for specific political leaders and political parties, formation and fragmentation of the political parties, and much more.25 But what makes the problem more serious is that such regional cleavage has been diversified and deepened through the processes of political-economic modernization and democratic transition. In the early 1970s, the regional cleavage existed mainly between the Kyongsang (including Taegu, Kyungbuk, Pusan, and Kyungnam) and Cholla (including Kwangju, Chunnam, and Chunbuk) provinces. But it grew into a multiregional cleavage as elections were held again and again: the cleavage involving four regions (TaeguKyungbuk, Pusan-Kyungnam, Cholla, and Chungchong) in the 1987 presidential election; the cleavage involving three regions due to the grand coalition of three parties (Kyungnam-Kyungbuk-Chungchong, Cholla, and Kangwon) in the 1992 presidential election; and another triple cleavage among Kyungnam, Cholla, and Chungchong in the 1997 presidential election. With this diversification, there has been no sign of regionalism abating because people in different regions continue to identify strongly with political leaders (and parties) who are supposed to represent their home regions. This phenomenon teaches us that the party system of South Korea is extremely weak and volatile. Political parties are formed, fragmented, and reorganized according to regional cleavages and personal loyalties. In addition, the candidates for the National Assembly, local governments, and local assemblies are all selected by the party bosses. Hence, the political parties are inevitably fluid: depending on the strategic calculations and decisions of the party bosses, parties can be formed, divided, and combined. There are no forces to effectively check the power of the party bosses from inside or outside and no clear party doctrines and programs to inhibit such strategic moves. As a result of their institutional weakness and incoherence, South Korea’s political parties are incapable of mediating between civil society and the state. The second factor obstructing democratic consolidation is the tendency of South Korean democracy toward delegative democracy, which undermines political stability and institutionalization. As Guillermo O’Donnell defines it with regard to the presidential democracies in Latin America, delegative democracy involves the delegation to elected presidents of sweeping, virtually monarchical authority for their terms of elective office. It features strong majoritarian domination, weak horizontal accountability (i.e., lack of policy coordination with the parliament, the opposition parties, and

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civil society), swift policymaking likely to involve mistakes and invite resistance, political conflicts based on naked power relations, and wide swings in presidential popularity.26 Although the South Korean context is different from the Latin American one, the above characteristics apply very well. The South Korean president monopolizes all important decisionmaking and is not constrained strictly by the parliament because the ruling party, effectively controlled by the president, maintains a numerical majority in the parliament; neither does the president consult with civil society when making critical decisions.27 Hence, except for the period from 1988 to early 1990 when the ruling party was in the minority, South Korean presidents have shown a strong tendency toward delegative democracy. The presidency of Kim Young Sam was a classic case, partly due to his habit of keeping secrets and making decisions alone, dating from his struggles against authoritarian rule and partly due to the innate inclination of a constitutional system in which decisionmaking authority is concentrated in the president. But I should point out three other factors: his government’s formulation and implementation of reform policies in secret when those participating in the policymaking were targets of the reform policies (e.g., the policy to disclose the assets of public servants); the lack of concern with building a durable reform coalition with forces in civil society, based on political doctrine and programs, not on regionalism; and finally, the lack of a democratic culture compelling consultation with opposition parties, parliament, and civil society. All these factors led President Kim Young Sam into the trap of delegative democracy: extraordinary political popularity and strength followed by rising public criticism from opposition parties and civil society groups of his arrogant, self-righteous, and autocratic style, thus fostering anti–Kim Young Sam (or antigovernment) mobilization. The most dramatic demonstration of this was the wave of intense protests ignited by his unilateral imposition (in a secret parliamentary session) of a labor reform bill in December 1996 that completely overrode opposition and labor concerns.28 However, even more destructive of his popularity and governing ability was the revelation of his administration’s deep entanglement with the corrupt practices he had morally condemned. The internal weaknesses of civil society also inhibit democratic institutionalization. Although South Korean civil society has grown enormously in density, scope, and level of organizational arrangements, its power to influence government and politics is limited by the regionalism and party boss domination that pervade party politics

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and also by the highly centralized, personalist, delegative nature of power in South Korea’s presidential system. In addition, civil society has two weaknesses of its own. One is an excess of self-interests. With the democratic transition, interest associations seeking a maximalist strategy tend to flourish, and intense interest conflicts tend to explode. Some prime examples include a zero-sum, head-on conflict between pharmacists and herbalists over whether to allow the former to dispense traditional herbal remedies; and a severe interregional conflict between Taegu-Kyungbuk and Pusan-Kyungnam over whether to allow a large-scale industrial complex in the upper area of the Nakdong River, located in the former region. In these two cases, no civic organization could play a mediating role. What is worse, in the case of the interregional conflict above, interest associations in the Taegu-Kyungbuk province were extremely militant in pressing the government to permit an industrial complex, whereas civic organizations, including the environmental movement organizations in the same provinces, were largely silent. Thus, it seems that civil society is helpless in resolving intense interest conflicts without resorting to state mediation. Another weakness of civil society is that voluntary participation on the part of ordinary citizens is broad but not based on a firm commitment. As shown in Figure 4.3, for example, the CCEJ’s membership increased dramatically since its founding in 1989, but the number of those who pay membership fees has been very small, less than 10 percent of the total members. This pattern of participation is quite similar among diverse civic organizations, although there exists a minor variation. The cause of this pattern seems to be that civic organizations generally produce a public good, and because a public good, once provided, cannot exclude those who do not pay for its production from consuming it, people tend to freeride. Knowing this problem acutely, therefore, most civic organizations try to rely more on the press and socially influential persons to publicize their issues and to amplify the effects of their efforts. In contrast to this approach by most civic organizations, however, ordinary members may want more member-oriented programs and more participatory democracy. But civic organizations seem to have failed to pay enough attention to such concerns until the 1990s because they have been preoccupied with achieving more important external goals in the public sphere (attaining economic justice, reducing corruption, protecting the environment, and so on). In the process of dramatizing their issues and changing state policies through close cooperation with the press, they have made the substantial mistake of alienating their less goal-oriented members, thus

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Figure 4.3

Changing Pattern of Membership: The Case of CCEJ

Source: Han’gyorae shinmun, May 13, 1996.

weakening their own infrastructural bases. If they fail to build and maintain a broad, committed membership base, they will lose their power at some point. In addition, South Korean civil society lacks a cooperative network linking civic organizations to interest associations. The fragmentation between the two may seem natural since they work in different realms. Considering the serious problems of strong regionalism, divisive political competition, and delegative decisionmaking, however, the need for the two types of organizations to cooperate is unquestionably great. Without this cooperation, the weaknesses of civil society cannot be remedied. Hence, it is necessary for the two types of organizations to collaborate with each other so that interest associations pay more attention to general and public issues and civic organizations become more concerned with the interests of the specific interest associations.

THE SOUTH KOREAN CASE IN CROSS-TEMPORAL AND CROSS-NATIONAL PERSPECTIVES The preceding analysis shows that South Korean civil society is Janus-faced. It has grown enormously and made invaluable contributions to the consolidation of democracy, building a strong civil bulwark to guard against serious democratic erosion within the

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state, economy, or society. However, it has shown its own internal and external weaknesses. Internally, its membership bases are frail, and it has difficulty constraining the tendency of diverse interest associations to pursue their self-interests in a maximalist way without paying adequate attention to public interests. Externally, it is largely unable to contain divisive regionalist competition at the level of political society and also unable to check a degenerative tendency toward delegative democracy at the level of the state. Overall, however, I cannot help but admit that the achievements of South Korean civil society are much more important than the problems it faces. Especially when I compare the civil society that developed after the democratic opening in June 1987 with the civil society that had existed prior to it, the gains appear enormous. Among other things, it has become more dense, more wide-ranging, and better organized both vertically and horizontally than before. Furthermore, it has widened and deepened democracy by habituating citizens to democratic practices and by providing political parties and the government with new types of leaders who have acquired democratic habits and skills. It has also made various efforts to meet the urgent needs of socially neglected groups so that they can remain within the democratic framework. Therefore, a robust and vigilant civil society has begun to redress the long-standing imbalance between a strong state and a weak society. These features of South Korean civil society become more pronounced when civil societies of other countries that have recently experienced democratic transitions are considered. For instance, it is reported that civil societies of the former communist states virtually disintegrated in the aftermath of their transitions to democracy. Smolar suggests that although these civil societies were one of the engines that brought about democracy, they became fragmented and atomized, leaving behind a “shadow society” in which only families, relatives, and close friends form intimate and primary relationships to survive in the midst of economic hardships and political instability.29 In a similar vein, Steven M. Fish argues that as state capacity eroded significantly due to the multiple transitions (political, economic, and territorial), the once vibrant civil society of Russia degenerated into a “parochialized society” where ethnically, confessionally, and territorially exclusive groups and organizations tried to achieve their own narrow interests as much as possible.30 In Latin America as well, civil societies played a critical role in fighting authoritarian regimes and in restoring democracy, but they subsequently became more fragmented and defensive as political parties took center stage and divided civil society by mobilizing electoral

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support on clientelist and populist lines.31 Of course, the weakness of Latin American civil societies should not be overemphasized. In many countries, civic organizations for human rights and environmental protection, interest associations such as business associations and labor unions, and especially grassroots movements for decentralization and local democratization are very active and have improved the quality of democracy.32 Although I lack the indicators and the systematic collection of cross-national data to compare the civil societies of third wave democracies, it does appear that South Korean civil society is better organized, more pluralistic, and more vigorous and resilient than in a great many of the new democracies of postcommunist Europe, Latin America, Asia, and Africa. But I must admit that serious external and internal problems continue to inhibit the ability of South Korea’s civil society to deepen and consolidate democracy in the country. To meet this great challenge, civil society must consolidate and democratize itself. In particular, this work should focus on four key problems. First, in order to avoid alienating ordinary (nonactive) members and to maintain strong membership bases, civil society organizations of all kinds must pay more attention to developing memberoriented programs to satisfy their demands for participation. For this purpose, in addition to achieving externally or publicly oriented goals, associations need to give ordinary members the chance to practice participatory democracy. Second, civic organizations need to cooperate more closely with sectoral interest associations. There are many common issues on which both types of organizations can work together (for example, anticorruption and political reform campaigns). If reliable cooperation can be forged between them, the overall strength of civil society will be very much enhanced. Where two (or more) conflicting interest associations compete intensely for the right to represent some sector of society, civic organizations such as the CCEJ may be able to mediate and forge a cooperative relationship. In this way, both types of organizations can accumulate experiences of cooperation and build a democratic culture of tolerance and compromise. Third, civil society needs to be much more active in developing democracy at the local level. Local autonomy began to be implemented in 1991 when the local assemblies were established through popular election. It has been further expanded since 1995 when the elections for both the local governments and local assemblies were held.33 But a serious problem remains: civil society at the local level is quite weak, even though local politics has begun to be democratized.

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This situation has occurred because South Korean civil society had developed in reaction to the authoritarian rules at the national level. In such a context, local civic and movement organizations, if any, all directed their activities to the democratization of national politics. Therefore, it is now necessary to strengthen local civil society to check effectively the transgressions of the local governments and local assemblies and enhance their responsiveness to local concerns. If civic organizations and interest associations working at the national level give local activists advice and training, as many organizations already do, it will be of great help. Existing organizations at the local level, such as the Young Men’s Christian Association (YMCA) and Young Women’s Christian Association (YWCA), can also act as catalysts for local leaders to organize a strong local civil society. Finally, with the activation of a strong and vigilant local civil society, organizations and associations in South Korean civil society need to start social movements against regionalism since it is perhaps the single biggest obstacle to democratic stability and consolidation. It is also necessary to mobilize for greater decentralization, which is surely one way of reducing the negative effects of regionalism. The benefits of decentralization are many: facilitating participatory democracy at the local level and hence helping to deepen democracy; increasing the vitality of local governments by giving more authority and responsibilities to them; and, finally, helping to reduce divisive influences of regionalism by giving more real chances for co-governing to local governments and local people. As long as the South Korean government maintains a highly centralized system, it cannot attain any of those beneficial outcomes for democracy. In such a centralized system, all the power struggles tend to aim at taking the power of the central government. But if the powers of the central government are widely devolved to the local government, then the power struggles themselves will be localized, and democracy will be preserved from the dangerous virus of regionalism. Therefore, we can conclude that the next step for democratic development in South Korea should be large-scale decentralization and that the movement for decentralization should be one of the most important tasks for South Korean civil society.

NOTES 1. See Larry Diamond, “Rethinking Civil Society: Toward Democratic Consolidation,” Journal of Democracy 5 (1994): 5. According to him, civil society is

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defined as “the realm of organized social life that is voluntary, self-generating, (largely) self-supporting, autonomous from the state, and bound by a legal order or set of shared rules.” With this definition, he emphasizes the following aspects of civil society: citizens’ collective action in the public sphere, its intermediary role between the private sphere and the state, and restriction and legitimation of the state power. However, it needs to be noted that civil society does not exist only in relation with the state but also in relation with the economy. Civil society, pursuing autonomy and selfprotection, tries to protect collective values and interests from the encroaching market that stimulates competition among people and hence fragments social solidarity. Thus, Jean L. Cohen and Andrew Arato stress self-limitation and functional autonomy of the three separate spheres of the state, economy, and civil society. See Cohen and Arato, Civil Society and Political Theory (Cambridge, MA: MIT, 1992), pp. 15–18. 2. The Independence Association, for instance, was formed in 1896 and began to mobilize people widely to protect national integrity from Japanese and Chinese interference. 3. For example, see Hyug Baeg Im, “Democratic Transition in Korea: A Strategic-Choice Analysis,” a paper presented at the Conference of the Korean Political Science Association, Seoul, Korea, 1991. 4. See Kyoung-Ryung Seong, “Social Origins of the Democratic Regime Change of Korea: A Social Movement Analysis,” in the Institute for Northeastern Studies of Kyungnam University, ed., New Streams of Korean Politics and Society (Seoul: Nanam Publishing, 1993). 5. Another study shows that a total of eighty-six environmental organizations were operating in mid-1994. See Do-Wan Koo, A Study of the History and Characteristics of Environmental Movements in Korea, Ph.D. diss., Department of Sociology, Seoul National University, 1994. Among them, sixty-nine were founded after June 1987. This implies that the total number of all civic associations should be much more than the sixty-nine examined by the Institute for the Population and Development Studies, which included only a few environmental organizations. 6. Korea Association of Civic Organizations, A Source Book (Seoul: Korea, 1995). 7. One major characteristic of Korean civil society is its expansiveness. That is, new civil associations tend to emerge to deal with social, economic, and political problems whenever those problems are not handled adequately by either the state or private companies. For example, the Citizen’s Coalition for Public Safety was established just after a big department store in Seoul collapsed in June 1995, causing more than 1,000 deaths. This phenomenon is found in the areas of protection of foreign workers, anticorruption campaigns, anticrime campaigns, campaigns for traffic safety, and so forth. 8. See Dae-Yup Cho, A Study of Social Movements and Typological Changes in Movement Organizations in Korea from 1987 to 1994, Ph.D. diss., Department of Sociology, Korea University, 1995. 9. Institute for Population and Development Studies of Seoul National University, A Study on the Way to Activate the Civic Organizations (Report to the Department of Information and Public Relations, Government of Korea, 1993). This survey was conducted in 1995 with the national sample of 2,005. It showed that 28.5 percent of respondents were mostly sympathetic to the

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opinions and activities of diverse civic organizations, whereas 18.6 percent were sympathetic to political parties, 5.7 percent to labor unions, 4.5 percent to radical political groups working outside the institutionalized political arena, 2.6 percent to government-sponsored associations, and, last, 2.5 percent to various interest associations (33.6 percent of respondents answered that there was no group they were sympathetic to). Hence, it is clear that such civic organizations as CCEJ and NCEM are currently most influential in Korea. But it should be mentioned that these results do not necessarily mean civic organizations actually hold or exercise more political and economic power than special interest associations. 10. Per capita gross national product (GNP) was around $2,000 during the early and mid-1980s, but it rose rapidly to $3,218 in 1987, $6,757 in 1991, and $7,513 in 1993. Finally, it reached $10,076 near the end of 1995. 11. In fact, the number of environmental organizations founded has increased roughly in accordance with the news coverage of environmental issues: two during the 1960s, six during the 1970s, one in 1981, two in 1982, one in 1983, two in 1984, zero in 1985, two in 1986, three in 1987, six in 1988, eleven in 1989, eight in 1990, nineteen in 1991, and eighteen in 1992. See Do-Wan Koo, A Study of the History and Characteristics of Environmental Movements in Korea. 12. Ho-Ki Kim, “The Current Stage of Civil Society Formation in Korea and the Tasks for Parliamentary Democracy,” a paper presented at the symposium in memory of the inauguration of the Institute of Participatory Society, Seoul, 1996, p. 32. 13. Hyung-Joon Park, “New Social Movements and the Movement of the Citizens’ Coalition for Economic Justice,” Economy and Society 27 (1995): 91. 14. See Dae-Yup Cho, A Study of Social Movements, 325. The CCPDS was established to monitor and closely check the state agencies: its activities include monitoring of elections, the judiciary, and human rights violations by state agencies and protection of public servants who disclose transgressions by state agencies. 15. Philippe C. Schmitter, “Still the Century of Corporatism?” The Review of Politics 36 (1974): 85–131. 16. The state corporatist system had two subtypes in Korea: inclusionary and exclusionary. On these types, see Alfred Stepan, The State and Society: Peru in Comparative Perspective (Princeton: Princeton University Press, 1978). The first type was characteristic of business owners, whereas the latter was characteristic of all other functional interests. In addition, the authoritarian regimes of Park and Chun created various quasi-state organizations to mobilize public support from the top down, especially when the elections were held. Examples of those organizations include the National Center for New Village Movement and the National Center for New Spirit Movement, both of which had vertical networks linking the national, regional, and local levels. Such organizations and state-recognized interest associations were used by the authoritarian regimes to preempt the emergence of independent civic and interest organizations from within the society and to mobilize public support when necessary for winning elections and weakening antigovernment forces by holding pro-government demonstrations. See Kyoung-Ryung Seong, Political Sociology of Regime Changes (Seoul: Hanul Academy, 1995). See also Jang-Jip Choi, Interest Con-

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flict and Political Control in South Korea: A Study of Labor Unions in Manufacturing Industries, 1961–1980, Ph.D. diss., Department of Political Science, University of Chicago, 1983. 17. Of course, there are other factors that affect the fate of democracy. For example, the levels of economic development and inequality and the degree of class conflicts and ethnic conflicts are all important. Hence, maintenance and consolidation of democracy cannot be explained solely by the growth of civil society. But it must be true that a dense and well-organized civil society is one of the most important factors in maintaining and consolidating democracy. 18. There are numerous committees in the CCEJ: the central committee, which meets once a year, decides the general policy direction and selects major staff members; the standing committee, which meets once a month, deals with current issues and makes specific decisions; and, finally, twentytwo policy committees discuss specific issues and suggest policy proposals to the standing committee. All the major issues are discussed in these various committees, and decisions are made collectively on a democratic basis. Therefore, it is impossible for any influential leader to dominate the CCEJ. In other words, the iron law of oligarchy does not exist in this association (all the information concerning these features came from an interview with the chief of the policy division of the CCEJ, Byoung-Ock Park, conducted on October 2, 1996). 19. Seong, Political Sociology of Regime Changes, 425. 20. See Ki-Sung Chung, “An Analysis of the Types of Corporate Foundations and Their Strategies,” in Chung Koo-Hyun and Lee Hye-Kyung, (eds.), Changes to the Business Environment and the Future of Korean Public Foundations (Seoul: Institute for East-West Studies of Yonsei University, 1995). During the period when authoritarian regimes had an intimate and corrupt relationship with (big) business firms, the latter adopted a “productivist” position (i.e., “production and profit first” position). As democratization weakened and eliminated this type of relationship, however, business firms rushed to make diverse social contributions to welfare, education, environmental protection, and so forth. They also established corporate foundations (forty out of eighty-nine foundations have come into existence since 1986) and spent a large amount of money ($136.3 million dollars in 1990, which soon rapidly increased to $538.4 million in 1995). For more information on corporate social contributions, see Federation of Korean Industrialists, Social Contributions of Corporate Foundations in Korea: A Source Book (1995). 21. Song Ho Keun, “Democratization of Society in Korea: The Changing Relations Between the State and Civil Society,” in Kyoung-Ryung Seong, ed., Democratic Regime Change and Democratization of Society in Korea (Seoul: Project Report submitted to the Korea Research Foundation, 1995), 106. 22. Aleksander Smolar, “Civil Society in Post-Communist Europe,” a paper presented at the International Conference on Consolidating the Third Wave Democracies, Taipei, Taiwan, 1995, p. 11. 23. A good example is the case of the CCEJ, whose top leader, Suh Kyung-Suk, left for the Democratic Party in February 1996 to run for the National Assembly election to be held on April 11, 1996. Many people worried that the CCEJ would face serious trouble once it lost its most influential

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and popular leader, but it turns out that the CCEJ is working well without him. 24. The level of regional economic disparity is extreme in Korea. In 1991, for example, per capita gross regional product (GRP) was $6,046 for Kyungnam and $4,917 for Kyunggi, the two most prosperous regions. But it was only about $2,900 for South Chungchong and North Cholla and between $3,000 and $3,200 for other underdeveloped regions like Kangwon, South Cholla, and North Chungchong. See Young-Jung Kim, “The Structures of Resource Mobilization and Allocation in Korea,” in Korean Sociological Association, ed., Korean Society and Localization in the Age of Globalization (Seoul, Korea: Nanam Publishing, 1994), p. 183. 25. See Yong-Hak Kim and Jin-Hyuk Kim, “A Relational Analysis of Regional Sentiments and Marriage Networks,” Korean Sociological Review 24 (1990). See also Kyu-Han Bae, “Electoral Processes and Regional Sentiments in Korea,” in the Korean Sociological Association, ed., Regionalism and Regional Conflicts in Korea (Seoul, Korea: Sungwon Publishing Co., 1992). 26. Guillermo O’Donnell, “Delegative Democracy,” Journal of Democracy (January 1994): 60–62. 27. President Kim tried very hard to change the outcome of the last parliamentary election, held on April 11, 1996. Originally, the ruling party won 139 seats out of the total of 299. But it made itself the majority party by inviting twelve more members of parliament from both the opposition and the independent parties to form a coalition. In this way, the Kim government was able to create a numerical majority. But it brought about intense resistance from the opposition parties, and thus the parliament could not open on the date legally set. 28. For further details, see Chapter 5 by Byung-Kook Kim and HyunChin Lim. 29. Aleksander Smolar, “Civil Society in Post-Communist Europe.” 30. Steven M. Fish, “Russia’s Fourth Transition,” Journal of Democracy 5, no. 3 (1994): 31–42. 31. See Philip Oxhorn, “From Controlled Inclusion to Coerced Marginalization: The Struggle for Civil Society in Latin America,” in John A. Hall, ed., Civil Society: Theory, History, Competition (Oxford, UK: Polity Press, 1995). 32. Jonathan Fox, “Latin America’s Emerging Local Politics,” Journal of Democracy 5, no. 2 (1994): 105–116. 33. For an analysis of Korea’s experience with democratic local government in the 1990s, see Kyoung-Ryung Seong, “Delayed Decentralization and Incomplete Democratic Consolidation,” in Larry Diamond and Doh Chull Shin, eds., Institutional Reform and Democratic Consolidation in Korea (Stanford: Hoover Institution Press, 1999).

5 Labor Against Itself: Structural Dilemmas of State Monism Byung-Kook Kim and Hyun-Chin Lim

THE EMPIRICAL PUZZLE The summer of 1987 ushered in a new era for South Korean labor politics. Voices of anger—and also hope—spread rapidly wherever a sizable number of industrial workers resided. The country trembled as labor discovered a new sense of power during July and August. Fully exploiting a political opening brought by a broad coalition of opposition political parties and dissident chaeya activists a month earlier, labor launched a challenge of its own against South Korea’s authoritarian order.1 First breaking out in large industrial complexes along the southern shores of South Korea and then quickly spreading northward to Seoul and Kyong’gi Province, labor unrest immobilized the economy. Some 3,000 strikes erupted during the two months, involving more than 1 million industrial workers. With the Federation of Korean Trade Unions (FKTU) crippled by a long history of collaboration with the state, and radical chaeya leaders yet to transform their revolutionary zeal into organization, South Korean workers lacked the capacity to launch a nationwide general strike. Yet they surprised the state and capital with a massive revolt. This political challenge by labor, however incoherent it was organizationally, set in motion changes that eroded the structure of social power built over two and a half decades to support the South Korean pattern of modernization. Workers won the right to collective bargaining and through it brought down state regulatory power over wages. The period also saw a series of organizational experiments to bring unity to labor. Loose networks of consultation 111

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formed among small vendor firms along regional lines; labor federations rose by industrial sectors; and chaebol unions coalesced along their company affiliation to construct councils, committees, and then federations. By 1991 this surge of organizational experiments culminated in a struggle to establish two central institutions of class formation and political integration: a nationwide organization of labor federations and a political party of workers. However, South Korea’s labor unions also lost much between 1989 and 1992 as they adopted a political strategy too confrontational and too radical to maintain unity among workers and to cultivate support from the rest of civil society.2 Shaken by the radical militancy of dissident labor activists and broken in spirit by a fury of conservative reaction from the state, workers withdrew their union memberships en masse. Chaeya and labor unions failed to win back support by articulating a viable program of social transformation. Ironically, the collapse of authoritarian rule in 1987 robbed them of an easy political target against whom they could rally a broad coalition of political opposition. Without a common enemy, they were caught in a destructive struggle against themselves, divided over goals and methods of social transformation and accusing each other of ideological betrayal and political cowardice. Fearing attack by rival factions on their moral integrity, activists and dissidents radicalized their political demands and escalated social conflict, which further alienated society. The eclipse of labor power was as sudden and dramatic as the earlier rise of union activism. The rate of unionization peaked in 1989 at 18.6 percent, only to fall rapidly to 12.3 percent by 1996 (see Table 5.1). Within a mere seven years, labor had lost all the organizational gains it had made since South Korea embarked on political liberalization in June 1987. The force of continuity was even more powerful in electoral politics. The South Korean middle class, turning decisively conservative after achieving electoral democracy in 1987, broke its brief political alliance with chaeya dissidents amid the spread of labor unrest.3 This realignment obstructed the formation of a progressive mass political party. In election after election, chaeya candidates were disgraced. Baek Ki Wan pulled only 1.0 percent in the presidential election of 1992. Popular labor activist Kwon Young Gil won only 1.2 percent in 1997. In National Assembly elections, too, old political bosses with regional bases of support triumphed over labor-oriented parties. The newly formed People’s Party saw all its candidates defeated in 1988, and its rival Han’gyorae Democratic Party elected only one of its candidates. Four years later, seventy candidates ran for the assembly on progressive platforms under five different party labels, but none were elected. Disillusioned, the People’s

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Table 5.1

Unionization and Labor Disputes Labor Unions

Year

Wage Earnersa

1970 1975 1980 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

3,746 4,751 6,464 8,104 8,433 9,191 9,610 10,389 10,950 11,349 11,568 11,751 12,297 12,736 13,043

Union Unionized Membersa Rateb 473 750 948 1,004 1,036 1,267 1,707 1,932 1,887 1,803 1,735 1,667 1,659 1,615 1,599

12.6 15.8 14.7 12.4 12.3 13.8 17.8 18.6 17.2 15.9 15.0 14.2 13.5 12.7 12.3

Labor Disputes Number Number of Loss of of Cases Participantsa Workdaysc 4 52 206 265 276 3,749 1,873 1,616 322 234 235 144 121 88 85

1 10 49 29 47 1,262 293 409 134 175 105 109 104 50 79

9 14 61 64 72 6,947 5,401 6,351 4,487 3,271 1,528 1,308 1,484 393 893

Source: Korean Labor Institute, Labor Statistics (Seoul: Korean Labor Institute, 1997). Notes: a. 1,000 men. b. Percentage. c. 1,000 workdays.

Party disbanded in 1992; many of its members subsequently joined regionalist political parties in a futile effort to achieve individually what they could not win collectively as a dissident force.4 This mix of continued organizational fragmentation and new ideological contentiousness forebode an era of social conflict in which no one could be a winner. With the state immobilized by a crisis of legitimacy, labor suddenly found itself free to experiment with new forms of organization and ideology. But possessing neither a mass political party nor a nationwide peak organization capable of interest integration, labor failed utterly to tame its political contentiousness and devise a viable alternative formula of modernization. It was also divided against its own weaker members employed in small vendor firms, who could not transfer the rising cost incurred by price increases. These workers in small vendor firms bore a disproportionate share of sacrifice in times of economic adjustment, a burden that became unbearable when South Korea was caught in a severe liquidity trap after November 1997. The state and capital also lost when labor became ideologically contentious without integrative institutions. As labor leaders— fearful of being challenged by hawks from within—projected an

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uncompromising posture on wage issues, the state saw its old mechanism of export-led growth seriously damaged. The large labor unions in heavy and chemical industries relentlessly pushed up wages, while their chaebol firms transferred the increased costs to less organized forces in society through price increases. The wage and price hikes hurt South Korea’s competitiveness in international trade, resulting in a huge trade deficit as early as 1990. However, policymakers were unable to move organized labor and capital toward a strategy of recovery based on mutual concessions. Some industrial conglomerates accommodated the demands of workers, but their efforts to buy industrial peace through wage hikes or increased welfare benefits failed dismally. Strikes became a ritual played out every spring in large export firms owned by the chaebol, which only hastened economic crisis and further squeezed out small vendor firms from competition. The economic difficulty South Korea faced after 1987 was less cognitive than structural in origin. South Korean labor unions were too well organized to be a mere price taker in the market but also too weakly organized to produce a comprehensive social contract binding all major segments of labor and capital to a sustainable rate of increase in wages and benefits. This structural condition of intermediate fragmentation entrapped South Korean labor politics in a classic “prisoners’ dilemma” in which rational action by individual unions to maximize their interests produced an irrational systemic consequence of trade deficits and economic instability, seriously damaging the overall class interests of labor. Restraint in wage demands was required if labor as a class was to enjoy price stability and full employment. This common interest did not, however, prevail in individual workplaces, where in the absence of a unified labor leadership that could discipline the entire movement, every individual union pressed for its own immediate interests at the expense of others. Major political actors were aware of the structural origin of South Korea’s economic difficulty. However, profound differences in ideology and class interest yielded not one but two programs of labor reform during Kim Young Sam’s presidency (1993–1998). The Ministry of Labor (MOL) tried to tame labor by emulating the Japanese model of company unionism, while labor activists and chaeya dissidents found in Western European corporatism an alternative path to modern interest politics. Thus, while the state sought to atomize (in essence, disorganize) labor, labor activists sought to centralize and so maximize the overall negotiating power of the movement. But neither vision of structural reform was achieved.

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Only after the 1997 financial meltdown did political leaders move toward genuine reform. Until then, labor politics only hindered the economy with its dangerous mix of organizational fragmentation and ideological contentiousness.

HISTORICAL LEGACIES The Hard State South Korea’s contemporary labor politics is rooted in the distinctive structure of social power constructed by Park Chung Hee after his seizure of power in 1961. A key purpose of this structure was to preempt the formation of autonomous labor movements. Only when workers were fragmented would Park’s state bureaucracy, rationalized into a technocratic leviathan, be relieved of social constraints and free to maximize economic growth over any other consideration. What Park desired was a labor force resigned to shouldering a disproportionate share of the burden of heavy investment in the early stages of industrial development while capital received diverse privileges for its role as engine of growth. The military junta dissolved all existing labor unions immediately after the 1961 coup and entrusted the newly formed Korean Central Intelligence Agency (KCIA) with the task of organizing a new labor leadership loyal only to Park. The security agency dexterously applied techniques of clandestine operation learned in military service to build official trade unions from the top down while preventing the infiltration of radical dissidents.5 The resultant FKTU outwardly projected an image of democratic societal corporatism, with labor federations organized by industries as its basic units, but it was in fact an instrument of authoritarian state corporatism.6 Each possessing less than fifteen full-time officials, the member industrial federations lacked the capacity to formulate goals and strategies of their own. The umbrella organization, the FKTU, was even weaker institutionally, unable to collect dues in time from its member federations or to secure trust and loyalty from the rank and file of company unions. Established from the top down by Park to speak for the state and capital rather than labor, the FKTU suffered a crisis of legitimacy from its very inception. Alienated from and ignored by the working class, both industrial and national federations came to be led by a loose “oligarchy” of people who lacked some essential traits of true oligarchs: a firm grip on the internal affairs of their organizations, a sense of camaraderie, and

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an ability to survive politically. Of the seven heads of the FKTU between 1961 and 1979, only one managed to serve a second term. A single term became the rule as six major industrial federations took turns every three years dividing among themselves FKTU posts. This situation was more than welcomed by the state, which desired not a coherently led labor movement but a collection of factional bosses consumed with internal power struggles far removed from the interests of the working class. By its sheer existence, the FKTU served the state’s goal to preempt the formation of autonomous labor unions. The labor laws recognized FKTU-affiliated unions as the only legal spokespeople for labor interests by requiring prior state approval for workers to form a union and prohibiting the formation of new labor unions where workers were already represented. Park thus transformed collective bargaining into a mere administrative process whose outcome was more or less controlled by MOL bureaucrats. The revision of labor laws in 1963 empowered MOL to mediate all disputes between labor and capital and force their acceptance of its verdict. There was only labor administration, not labor politics, under Park Chung Hee. After seizing power in 1980, Chun Doo Hwan perfected Park’s mechanisms of control. All pretensions to corporatist bargaining were jettisoned as Chun explicitly codified into law all informal practices and customs hitherto developed to weaken the power of labor federations. The laws as amended in 1980 barred workers from having more than one union, thus safeguarding the prerogatives of FKTU-affiliated federations and company unions from challenges by labor dissidents. But mistrustful of even these submissive official labor federations, Chun also banned intervention by “third parties”—including FKTU—in disputes between workers and their employers. Moreover, he prohibited labor unions from engaging in political activities, including election campaigning and political fund-raising. These provisions—known in South Korea as samkeum (three prohibitions)—isolated labor federations from the working masses and further reduced South Korea’s labor movement to a fragmented force of company unions driven by narrow economic motives. Labor was also weakened by the choice in 1964 of an economic development strategy based on export promotion. Labor could seldom engage in a prolonged struggle with capital, lest it jeopardize the very foundation of its (and the nation’s) economic well-being. Competition in export markets was simply too severe and South Korea’s economy too fragile to endure the costs of protracted strikes.

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Moreover, export promotion “delivered.” Deserted politically by the state without a modern collective social safety net but offered individually a window of opportunity for upward mobility by the continuous expansion of export markets, South Korea’s working masses endured their second-class status without a sustained, organized protest and steadily improved their living standards through the market during authoritarian rule. Between 1962 and 1987, South Korea’s total volume of exports expanded annually at 32.4 percent in current U.S. dollars, while its gross national product (GNP) rose on average by 8.7 percent in real terms (see Table 5.2). Real wages rose annually by 6.7 percent, lifting much of South Korea’s industrial working class into the lower and middle tiers of the newly affluent middle class by 1987. These individual successes profoundly crippled labor power. To improve their lot, workers chose the proven path of rugged individualism rather than the politically dangerous option of collective class action. Even those more militant workers in South Korea’s heavy and chemical industries failed to conceptualize their struggle over wages as an integral part of some larger program of structural transformation. Bereft of both class organization and alternative policy ideas, labor could not but let monetary and fiscal policy fall under the exclusive purview of the state and capital. Even the dissident intelligentsia were deprived of an alternative vision. The chaeya lashed out against South Korea’s strategy of modernization for creating an exploitative class society. However, its effort to offer an alternative economic theory and development model after 1980 failed dismally. The chaeya initially toyed with the ideas of imperialism and dependency, then followed the theories of monopoly state capitalism and feudal colonialism, and finally embraced the Juche (self-reliance) ideology of North Korea’s Kim Il Sung in an ultimate show of political protest and ideological defiance.7 This strident and confusing journey—more the product of a lack of vision than ideological certainty and tenacity—marginalized and discredited the chaeya politically. State Monism Figure 5.1 theorizes about Park Chung Hee’s historical legacies by presenting a typology of modern interest politics. The top two quadrants house democratic systems of interest intermediation, pluralism and societal corporatism.8 They both rest on the political virtues of tolerance, bargaining, and reciprocity, viewing social conflict as not only an inevitable part of modernization but also a

Table 5.2

Major Economic Indicators and Wage Trends

Year

Real GNP Growtha

1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

4.1 9.3 8.9 8.1 11.9 6.6 11.3 13.8 7.6 9.1 5.3 14.0 8.5 6.8 13.4 10.7 11.0 7.0 –4.8 6.6 5.4 11.9 8.4 5.4 12.3 13.0 12.4 6.9 9.5 9.1 5.1 5.8 8.6 8.9 7.1

Total Exportsb 55 87 119 175 254 335 486 658 882 1,132 1,677 3,271 4,515 5,003 7,815 10,047 12,711 15,056 17,505 21,254 21,853 24,445 29,245 30,283 34,715 47,281 60,696 62,377 65,016 71,870 76,632 82,236 96,013 125,058 129,715

Changes in Consumer Price Indexa

Changes in Real Wagea

— — — — 11.6 10.4 10.9 12.5 16.1 13.4 11.7 3.2 24.3 25.3 15.3 10.1 14.4 18.3 28.7 21.3 7.3 3.4 2.3 2.4 2.7 3.0 7.1 5.7 8.6 9.3 6.2 4.8 6.2 4.5 5.0

–1.2 –7.9 –6.5 0.8 10.9 10.9 14.1 19.3 9.3 1.7 5.2 8.0 6.1 3.3 17.5 19.9 18.0 8.4 –4.1 –0.5 7.9 7.4 6.3 5.6 5.4 7.1 8.4 15.4 10.2 6.9 8.4 7.0 6.1 6.4 6.6

Trade Balanceb –367 –474 –285 –275 –420 –574 –836 –1,201 –1,149 –1,327 –898 –1,015 –2,392 –2,193 –1,058 –764 –2,261 –5,283 –4,787 –4,878 –2,397 –1,747 –1,387 –853 3,131 6,261 8,886 912 –4,828 –9,655 –5,144 –1,564 –6,335 –10,061 –20,624

Sources: Economic Planning Board (EPB), Gaebal nyondaeui gyongjae jongchaek: gyongjae kihwekwon isipnyonsa (Economic policy during the developmental era: The twenty-year history of the Economic Planning Board) (Seoul: EPB, 1982), Appendixes; EPB, Juyo gyongjae jipyo (Major economic statistics), 1982, p. 202; Hankuk gyongjae nyonkam (Annual economic review), annual issues; Choi Jang Jip, Hankukui nodong undongkwa gukka (The state and labor movements in Korea) (Seoul: Nanam, 1997), p. 329; Statistics Agency, Hankuk tong’gye nyonkam (Statistical annuals of Korea), 1996, p. 489; Labor Ministry, Nodong tong’gye nyonkam (Labor statistics annuals), various issues; Economic Finance Board, Gyongjae baekseo (Economic white paper), 1996, p. 111; Korean Labor Institute, KLI nodong tong’gye (KLI labor statistics), 1994, p. 95. Notes: a. Percentage. b. Millions of current U.S. dollars.

LABOR AGAINST ITSELF

Figure 5.1

119

Models of Interest Intermediation Organizational Form Dispersed

Concentrated

Bottom Up

Pluralism

Societal Corporatism

Top Down

State Monism

State Corporatism

Power Flow

desirable force of progress. In these systems, power flows “bottom up” from society. The difference between pluralism and societal corporatism lies in the organizational mechanism or process by which social conflict is mediated and a balance of power is reached between opposing forces. Assuming the existence of an atomized but symmetrical world of equals where a balance of forces is “natural,” pluralism allows the spontaneous formation of myriad interest groups without interference by the state. Societal corporatism, by contrast, sees social harmony to be more a product of regulation than the natural state of society. It thus features a system of tripartite bargaining between the state and umbrella associations of labor and capital, each of which coherently articulates class interests through internally unified and vertically integrated organizations formed with the aid of the state. The lower right quadrant is occupied by a qualitatively different system of modern interest politics, authoritarian state corporatism. Unlike pluralism as well as societal corporatism, it abhors social conflict and is obsessed with political control but pacifies these prejudices through the same organizational formulas that democratic societal corporatism uses so well to realize the opposite ideals of liberty and equality. They include establishment of a highly hierarchical but all-encompassing system of interest representation for each major social force, selective conferment of public authority and power to the top layer of this hierarchical political order, and centralization of decisionmaking processes by bringing capital and labor representatives into a tripartite forum to decide issues of common interest. However, in the hands of a state corporatist system, these institutions serve not to mediate conflict but to control society

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from the top down and to preempt the formation of autonomous centers of power within civil society. Figure 5.1 vividly shows an anomalous character of South Korean labor politics before 1987. The South Korean labor movement was organizationally dispersed with its center of gravity located at the firm level, but its fragmentation was much more a product of state coercion than the spontaneous actions of workers. In the level of control from above, South Korea’s system of labor organization before 1987 was the antithesis of pluralism. Yet the system also departed from the model of state corporatism, which controls labor by centralizing the processes of interest intermediation. Rather, South Korea belonged to the lower left quadrant of Figure 5.1, the world of “state monism.”9 State monism produced unique difficulties as well as singular opportunities for South Korea’s political authority. Because workers were thoroughly disorganized, the state was able to adopt a politically risky strategy of unbalanced growth and concentrate scarce productive resources in a few chaebol. These entrepreneurs became a privileged class, protected from foreign rivals by myriad trade barriers, living off rents generated from oligopoly rights conferred by the state, and enjoying an abundant supply of credit funneled by state-owned and -managed banks. The chaebol became not only a rentier class living off licenses and permits distributed by the state but also an aggressive pioneer of new frontiers of economic growth available in vast foreign markets. But the economic benefits of state monism came with a political cost. The strategy of export promotion, for which state monism was constructed, was not a good foundation on which to build a broad political coalition for the state. The economic growth resulting from it certainly secured for its architect a loyal following within society, but this base of popular support remained mostly diffuse and unorganized. When a crisis of legitimacy broke out in 1979, Park Chung Hee lacked the organized political backing he needed. In particular, labor remained an alienated political force despite a steep rise in real wages. For most workers, higher wages were the fruit of their own hard work, not a product of political leadership. The workers had been left all by themselves in a thoroughly atomized structure of company unionism, forced to shoulder a disproportionate share of adjustment costs whenever South Korea’s economy was hit by recession (a not infrequent occurrence given the chaebol’s propensity for overexpansion). Expecting continual fresh injections of state resources, chaebol owners embarked on new business ventures with subsidies from state banks whenever an opportunity

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rose, ending up with an outwardly imposing but financially fragile export machine. When economic stagflation hit in 1971 and 1980 due to this business propensity for over expansion, it was not capital but labor that bore the brunt of adjustment costs. Fearing a crisis of confidence that could precipitate a run on South Korea’s overextended state banks, the state rushed to rescue insolvent business ventures of chaebol by debt rescheduling and business mergers. Wages were held captive to this business volatility. Annual growth in real wages plummeted to 1.7 percent in 1971 after averaging a phenomenal 12.9 percent between 1966 and 1970. When economic crisis struck again in 1980, Chun Doo Hwan enacted a harsh monetary contraction that reduced real wages by 4.1 percent. This change must have come as a shock to South Korean workers, who had seen their real wages grow 16 percent annually on average the previous four years (see Table 5.2). Thus, although producing extraordinary growth in real wages over time, the strategy of export promotion generated sharp cyclical fluctuations in the welfare of South Korea’s working class. At the same time, the economic miracle was achieved through a repressive political strategy of demobilization and disorganization—state monism—whose goal was to raise efficiency by throwing labor into the fickle, rugged, and unregulated world of international competition. Hence, the process of export promotion politically alienated South Korean workers, as much as its result of economic growth satisfied them. The strategy of export promotion bequeathed an additional vulnerability: an integrated industrial structure whose parts depended intimately on each other for survival. This vertical and horizontal integration enabled strategically located company unions to disrupt the overall process of capital accumulation.10 The structure of interdependence was born out of three linkages that Park Chung Hee had consciously strengthened to make up for South Korea’s poor resource endowment in international competition. The chaebol integrated industries vertically as well as horizontally, built extensive networks of subcontractors, and geographically concentrated factories in a few large industrial complexes. From these linkages arose political challenges as well as economic opportunities for capital. When the state was there to coerce workers into silence, before 1987, these linkages became one more source of growth, allowing firms to realize economies of scale. The same linkages, however, became South Korea’s Achilles’ heel when labor came to acquire a new outlook on social issues under the twin effects of political opening and

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economic growth after 1987. Integrated into the lower tiers of the middle class, aspiring for political and social rights, and freed from state terror, workers in the chaebol companies transformed this set of industrial linkages into a weapon to force concessions from capital. The specter of a strike at one workplace instantly causing a fall in sales or a shortage of parts and components at the other affiliated companies often persuaded chaebol to secure temporary industrial peace through large wage and benefit increases. At the birth of electoral democracy in 1987, there existed a profound institutional gap in South Korean labor politics. The economic lives of social groups had become intimately intertwined through the structure of industrial linkages forged by export promotion, but South Korea lacked institutions to integrate interests and mediate social conflicts arising from those structural linkages. The model of state monism had run its course, and a new framework of interest articulation, aggregation, and mediation was needed.

LABOR IN ELECTORAL DEMOCRACY A Game with No Winner The breakdown of authoritarian rule in June 1987 ushered in a new era of labor militancy. Finally freed from the coercive power of the state, labor activists and chaeya dissidents pushed hard to establish a new labor movement led by a unified association modeled after societal corporatism. Their political experiment encountered a series of setbacks, however. The “democratic” company unions born out of the Great Workers’ Struggle in 1987 survived in the strategic heavy and chemical industries despite repression by the state between 1989 and 1992, but the labor movement as a whole followed a very different historical trajectory of premature eclipse. The rate of unionization declined to 12.3 percent by 1996 (see Table 5.1), a one-third drop since 1989 and a return to the level of 1986. Moreover, despite the effort to build a unified umbrella organization for labor unions, electoral democracy brought a confusing proliferation of federations, councils, and coalitions. The unions for small vendor firms formed fourteen regional conferences after 1987, and twelve labor federations of white-collar workers employed in South Korea’s burgeoning service sector coalesced to establish a loose national council of solidarity by 1990. The powerful company unions located in heavy and chemical industries, in contrast, regrouped along their chaebol affiliation and built an umbrella organization of their own.

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The trend continued in spite of—or because of—the chaeya’s launching in 1990 of a National Council of Trade Unions (NCTU) as the association of democratic unions in direct opposition to FKTU. The organization lasted scarcely a year as a political force, its membership declining dramatically from 190,000 to 9,000. The causes of failure lay both within and without the NCTU. Recruiting a large share of its members from unskilled female workers employed in light industries in the Kyong’gi/Inchon and Masan/Changwon areas, NCTU was shunned by skilled workers of the chaebol.11 Moreover, it was more an organization for South Korea’s radical dissident intelligentsia than the working class, which crippled its political potential. The dominance of chaeya dragged NCTU into a risky ideological struggle, which alienated workers, provoked a harsh backlash from the state,12 and, most importantly, threw labor activists into a destructive internal feud over ideological goals and political strategies. With electoral democracy established, the chaeya searched incessantly for new goals and missions to justify their continued existence as an alternative source of moral leadership in South Korea, and they ended up with a very radical agenda and a self-defeating strategy of confrontation.13 Their agenda produced a radical program of political action, which culminated in a frontal assault on South Korea’s social order in 1991. On May 9, 458 dissident labor unions went on strike for a day to protest a labor organizer ’s death; a week later 156 unions launched another wave of strikes. Meanwhile, the chaeya continued holding mass rallies for two months to force Roh Tae Woo’s resignation from the presidency. Moreover, a number of student activists committed suicide to protest the moral bankruptcy of the South Korean state,14 and a religious leader visiting Pyongyang, North Korea, boasted a huge pool of “suicide squads” ready to give their lives to awaken the masses to the grim reality of political repression and economic exploitation in South Korea. This show of political defiance was self-defeating because it alienated most South Koreans not only from chaeya radicals but also from labor militants. The public did not distinguish between the two but saw mass rallies, labor strikes, and violent protests as integral parts of a conspiracy to foment revolution. The unions suffered when public opinion swung against the chaeya. Even Kim Chi Ha— a dissident with an impeccable record of struggle against authoritarian rule—denounced chaeya radicals as a “demonic force” against ilryun (human ethics).15 He spoke not only for ordinary citizens angered by the violence sweeping over their society in May but also for new voices of moderation emerging among the chaeya. The

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change in public mood soon became visible in the June 1991 elections, when Roh Tae Woo’s ruling Democratic Liberal Party (DLP) swept 65 percent of the city and provincial assembly seats. The ensuing disintegration of the chaeya ironically provided a political opportunity for labor. Finally freed from divisive ideological conflicts, dissident unions could focus on institution building. The effort gave birth in November 1995 to a new umbrella organization, the Korean Confederation of Trade Unions (KCTU). The KCTU differed from its predecessor, the NCTU, by drawing active participation from chaebol unions and focusing its struggle specifically on the system of three prohibitions. However, there remained strong undercurrents of historical continuity in labor politics. As shown by Song Ho Keun’s survey of union officials, chaebol unions remained ambivalent toward the KCTU despite their federations’ membership in it.16 They recognized the political utility of having an umbrella organization in their struggle against capital but at the same time opposed the strengthening of its power at the expense of their own institutional autonomy.17 The KCTU was more a loose mechanism of consultation among South Korea’s privileged workers—the chaebol unions—than an organization integrating all major segments of the working class. Lacking the firm support of member federations and unions, it failed to develop a bureaucracy of its own to craft and wage a long-term political strategy. When a political showdown developed in January 1997 over newly amended labor laws (see below), the organization had only twenty-one full-time officials and staff. Moreover, the establishment of the KCTU brought not an institutional disintegration but a slow rebirth of South Korea’s official FKTU, resulting in a de facto bipolar system of labor representation at the peak. The official FKTU managed to hold onto its status as South Korea’s largest umbrella organization of trade unions with 1.7 million members, despite the steady erosion of its support base by dissident labor activists since 1987. Three factors accounted for its survival. The prohibition of multiple unions still made it the only legal peak organization, with diverse political privileges and institutional benefits. The official federation, moreover, cultivated a new public image of political independence by adopting a more aggressive posture on wages.18 But it was the inability of the KCTU to provide a clear alternative more than anything else that accounted for the FKTU’s survival. Dominated by large unions that remained reluctant to transfer their newly won power to a higher organization in the interests of class solidarity, KCTU had failed to expand its base of support to the small vendor firms producing less strategic goods.

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Unfortunately, the weakness of the class organization of labor as a whole had the effect of liberating chaebol unions, with dire economic consequences. Seldom concerned by the destabilizing effects of their action on fellow workers at smaller vendor firms, chaebol unions lashed out against capital in a fury of strikes that pushed up wages in strategic heavy and chemical industries. The militant unions at Hyundai were exemplary. Rebelling against a 1993 guideline by South Korea’s official federations of businesses and trade unions to restrain wage increases to the range of 4.7–8.9 percent, the workers at Hyundai Precision Machinery Industry walked out; this quickly spread to other affiliate companies of Hyundai Group. The unions at Hyundai had a small general strike of their own until Labor Minister Rhee In Jae reluctantly invoked the provision in the labor laws prohibiting third-party intervention in labor disputes. After thirty-nine days, the strikes were crushed, but with a huge cost to South Korea’s strategic industries (most of which were not on strike). By one estimate, South Korea lost $280 million in exports and 1.2 trillion won (more than $1 billion) in industrial production, reducing the annual growth rates of exports and GNP by 0.32 percent and 0.17 percent, respectively.19 The continued militancy of chaebol unions surprised the state and capital, which each believed it had done its share to accommodate the unions. Roh Tae Woo expanded shareholding by labor, distributed stocks of state enterprises to the public, and constructed more than 2 million apartments to reduce housing expenses.20 Seeking to emulate the more harmonious labor relations in Japan, the chaebol developed a new managerial system based on paternalistic norms and values of Confucian kajokjuui (familism). Numerous “committees” and “teams” were established at workplaces to ensure cooperation between labor and capital; special allowances and bonuses were established and company welfare programs expanded to boost workers’ morale; and South Korea’s traditional system of lifetime employment and seniority-based promotion was perfected to strengthen the workers’ identification with their company and preempt the spread of class sentiments.21 The success of the business community in these preemptive efforts was evidenced in surveys showing most workers unwilling or unable to transcend their narrow world of company ties to embrace the universal sentiment of class solidarity.22 But this success came at a huge economic cost even for the wealthy chaebol, which lavishly expanded their “social” expenditures on labor. In an extreme case, the Pohang Iron and Steel Company (POSCO), which reaped a huge economic rent as a monopoly producer of steel and iron, provided a

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model educational system for its workers’ children, university scholarships for the older children, a massive housing complex for employees with dependents, and a modern medical facility to treat workers and their families. The strategy achieved its immediate aim, as workers deserted the company union en masse, leaving it with only a handful of members by 1992. The actions of workers in heavy and chemical industries showed clearly how the instrument for diffusing a universal class conception of social rights in Western Europe—welfare policy—could in a different historical context, through somewhat different means, foment crippling divisions within labor. In meeting the demand for welfare through provisions by individual business firms, South Korean capital obstructed the development of horizontal linkages of solidarity among labor unions. The welfare benefits provided individually by business firms stood at 77 percent of public welfare spending even in 1988, before the upsurge of company welfarism. The same ratio ranged between 6 percent and 28 percent for nine Western European countries in 1984 (and was 31 percent for Japan in 1988).23 In pursuing industrial peace and wage stability, however, the state and capital were far less successful than they had been in dividing labor. The provision of welfare benefits and the general fragmentation of labor did not restrain the militancy of chaebol unions. In fact, the latter succeeded in negating two principles implemented by the state and capital decades before to generate export growth: “no work, no pay,” which barred employers from paying wages during strikes; and “wage increase by a single digit,” which aimed to keep annual wage increases below 10 percent. The previous solidarity of chaebol collapsed. Fearing labor discontent, they developed a myriad of special allowances and benefits to meet any union demand in excess of the administratively set limit on wage increases.24 Wages and prices rose ever higher as the more privileged elements of labor and business recklessly used their market power to win a larger share of national income (at the expense of weaker members of their own classes and, after 1997, even their own future job security and income).25 The wage ratio between firms with fewer than thirty workers and companies with more than 500 employees dropped from almost 90 percent in 1986 to about 80 percent in 1988 and again to 71 percent by 1991 (Table 5.3). As workers in heavy and chemical industries won independence from the state after 1987, company unionism became more a liability than an asset for the economy.26

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Table 5.3

Wage Gap (in percent)

Year

Female Workers/ Male Workers

Blue-Collar Workers/ White-Collar Workers

1980 1985 1990 1991 1992 1993 1994 1995 1996

44.1 47.9 53.5 54.5 55.9 59.4 58.4 60.0 60.9

47.0 55.7 70.7 71.8 73.8 75.3 77.7 77.8 80.5

Companies with 10–29 Workers/Companies with over 500 Workers 93.3 89.5 74.1 71.1 72.6 73.4 72.4 71.6 70.2

Source: Korea Labor Institute, Labor Statistics, 1997.

The Politics of Reform Only in 1996 did labor reform become a top political priority in South Korea.27 The economy was then readying itself for entry into the Organization for Economic Cooperation and Development (OECD), which required financial and labor reform.28 The International Labour Organization (ILO) had been also pressuring South Korea to dismantle the system of three prohibitions since 1993, when South Korean labor activists filed suit at the ILO.29 Reform began in April 1996 when Kim Young Sam authorized his staff on social welfare to set up a tripartite presidential commission to draft a proposal for labor reform.30 The commission itself was a historic novelty, vividly showing how much South Korea had changed since 1987. With labor, capital, and public interests each sending ten representatives, the commission’s establishment signaled greater flexibility in policy thinking on labor issues. The state even appeared receptive to societal corporatist ideas of bargaining by including in the advisory commission representatives of the KCTU, which still remained technically illegal under South Korea’s prohibition of multiple unions. In doing so, government reformers led by Secretary to the President for Social Welfare Park Se Il were sending a message of reconciliation to all major societal forces in an attempt to establish new norms and principles for labor politics. The state would cease its futile effort to dismantle autonomous interest organizations. Instead it would advance its interests by working with labor and capital.

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It was Park Se Il who seized the initiative when the tripartite commission met. The representatives of capital and labor frequently talked past each other, with the unions reiterating their old demand for lifting all three prohibitions, while the business community demanded a more flexible labor market.31 Termed samjae (three systems) within policymaking circles, the business proposal sought the freedom to lay off workers in times of economic distress, to flexibly allocate working hours to reduce labor costs, and to bring in temporary outside workers in order to reduce employers’ obligations to cover worker benefits. The three systems proposal challenged the two most fundamental principles underlying South Korea’s company unionism—lifetime employment and seniority—and signified the entrepreneurs’ de facto abandonment of the Japanese model of labor politics. An impasse developed soon after the tripartite commission was convened. The prospect of finally overturning the system of company unionism did not embolden labor leaders. Instead they became haunted by the specter of massive layoffs if they surrendered the privilege of lifetime employment. The social welfare staff tried to lure labor with a proposal to remove the three prohibitions, but labor remained unconvinced. Giving up lifetime employment entailed a real cost, whereas acquiring a new set of formal political rights—to mediate labor disputes as a third party and to engage in election campaigning and fund-raising—offered little guarantee of strengthening class organization. Labor ’s political prospects were also constrained by the general conservatism of South Korean voters (see Chapter 3) and the tight structural constraints imposed by the fragile export economy. The dramatic decline of union membership and defeats of chaeya candidates in elections since 1990 argued against accepting the three systems in return for the removal of the three prohibitions. There was also the problem of organizational fragmentation within South Korea’s labor movements. The official FKTU and its rival KCTU each possessed distinctive organizational weakness, which hindered the crafting of a common policy on labor reform. Anxious to be legally recognized as a federation of trade unions but also fearing a possible encroachment by FKTU on its newly won base of support in heavy and chemical industries, KCTU worked to have multiple unions instituted only at the level of labor federations. Conversely, FKTU calculated that if multiple unions were allowed only at the level of labor federations, KCTU would become a legal federation, whereas FKTU would remain excluded from the most powerful centers of South Korea’s labor movements—the large

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company unions in heavy and chemical industries, many of which were founding members of KCTU. Consequently, FKTU demanded multiple unions at all levels if there was to be a system of multiple unions at all. As talks proceeded at the tripartite commission, moreover, it became evident that even KCTU was not a unified actor. The leadership was itself divided into hard-liners and soft-liners and was constantly harassed from within by powerful chaebol unions. The KCTU was a loose horizontal network of consultation, making decisions collectively through its often unruly central committee, which made it frequently reactive and inconsistent in negotiations.32 Fearing a mutiny by its more militant factions and troubled by the danger of massive layoffs, KCTU tried to become a free rider once its inclusion in the tripartite commission gave it de facto state recognition. To enjoy the political benefits of class compromise without being morally compromised by it, KCTU took a hard-line position on all fronts and forced FKTU to bargain alone with capital on the politically explosive issues of layoffs and flexible working hours. The KCTU even announced in October 1996 a policy of “nonparticipation” in the tripartite commission—a position carefully differentiated by its spokesmen from “withdrawal,” which would have brought down the commission. When FKTU threatened to withdraw its support for multiple unions, KCTU relented and rejoined the commission. However, the damage had been done. Not only did FKTU and KCTU remain distrustful of each other, but many leaders of the ruling New Korea Party (NKP) had become very critical of Park Se Il’s reform effort and were preparing to intervene. The business community did not make the situation any easier. Expecting a more favorable labor reform if Park Se Il’s tripartite commission failed to produce a proposal and Jin Nyum’s Labor Ministry won back the initiative, the chaebol adopted an intransigent posture. Their Korean Federation of Industries (KFI) opposed the establishment of multiple unions at all levels. The Korean Federation of Businesses (KFB)—an institution led by managers of labor affairs within business firms—adopted a more flexible position. It was prepared to accept multiple unions at all levels if labor agreed to take union officials off the company payroll and abide by the principle of “no work, no pay.”33 As seen by KFB, South Korea’s workers lacked an incentive to make moderate wage demands. Since they neither supported union officials through membership dues nor risked losing wages when they went out on strike, most workers took a hard-line position, escalating conflict with their employers when a dispute developed.

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Legally prohibiting employers from paying the salaries of union officials or special allowances for the wages lost during a labor dispute would correct this distortion in South Korea’s incentive structure. Because these two prohibitions were aimed at the financial Achilles’ heel of the labor movement, labor delegates on the tripartite commission adamantly opposed them. However, KFB persisted because allowing multiple unions would encourage minority factions to split from their unions and set up new organizations, which companies would then be obligated to support financially unless there were a prior reform on union salaries.34 The remaining issues produced similar deadlocks.35 Labor representatives called for an immediate lifting of all legal bans on intervention by third parties in labor disputes, whereas the employers’ associations proposed to permit intervention only by labor federations, but not by chaeya activists. Labor demanded prior consent by unions on the size and timing of layoffs while offering to accept a system of flexible working hours if capital were to reduce South Korea’s legally required working hours. Only then could labor avoid a loss of wages while shifting to flexible working hours. The representatives of KFI and KFB were prepared to give workers only the right to consult with employers on specific procedures of layoffs while opposing any reduction in South Korea’s legally required working hours. The grand class compromise envisioned by Park Se Il did not materialize. The initial deadline set for the tripartite commission’s report passed in September 1996 with the news of an impasse on all major issues. There were attempts by public-interest representatives on the commission to draw up a compromise bill, but the other two sides refused to budge. 36 When the commission failed to submit a compromise bill, Kim Young Sam set up an interministerial committee in mid-November to formulate the government’s own labor reform.37 This brought a major power shift in favor of capital, as Park Se Il lost the initiative to Labor Minister Jin Nyum. A technocrat with a long, distinguished career in budget and economic planning, Jin Nyum had from the start of the tripartite commission emphasized establishing samjae rather than lifting samkeum. Sticking to this position, he drafted a reform package that sided with capital on virtually all major issues and submitted it to Kim Young Sam and the ruling party for endorsement in early December amid the threat of a general strike by both FKTU and KCTU.38 The rival labor federations were both enraged by this development, but it took another blunder by Kim Young Sam to make this labor unrest a crisis of personal legitimacy and to show how far South Korea still was from a

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responsive, accountable, and law-based democracy. The day of reckoning came on December 26, 1996. Political tension had been building for two weeks since Kim Young Sam submitted Jin Nyum’s proposal as the government bill in early December. The opposition parties of Kim Dae Jung and Kim Jong Pil had been staging a sit-in at the National Assembly to block talks on labor reform until they could come up with their own reform proposal the following month. The indignant president, however, refused to wait and rounded up his assembly members at six o’clock in the morning of December 26 to pass a set of labor laws whose content only a few party leaders were aware of. The ruling party would come to regret this decision, for a group of hawks had significantly altered the draft legislation to make it even more favorable to capital. The laws passed on December 26 allowed employers to bring in outside workers during strikes, removed union officials from company payrolls, disallowed the payment of wages during strikes, and established a new system of flexible working hours—all as the interministerial committee had proposed. But they retrogressed on two issues that had caused so much trouble since labor reform became a priority in April 1996. The interministerial committee had opted to phase in multiple unions, allowing their establishment immediately at the federation level and after five years at the company level. However, the December 26 laws postponed multiple unions even at the federation level for three years while adding mergers and acquisitions as grounds on which employers could lay off workers.39 This turn of events was brought about by a coalition of hawks who had hitherto played only secondary roles in labor reform. One group consisted of the presidential aides for political, economic, and civil affairs, Lee Won Jong, Lee Suk Chae, and Moon Jong Su, respectively. Another group formed around NKP chairman Lee Hong Ku and secretary general Kang Sam Jae. Kwon Young Hae, director of the National Security Planning Agency, occasionally joined in high-level discussions to strengthen the hawks’ position.40 This was an alliance of powerful, strategically placed individuals, but they did not in any way speak for society. Their power derived from the president. Surrounded by a “human curtain” of confidantes and protégés, Kim Young Sam gave a disastrous New Year’s address on January 7, 1997, that doomed his presidency. The president defended the new labor laws as a product of “efforts to transform South Korea after the model of advanced nations” and justified his party’s action in the National Assembly on December 26 as an exercise of “the right

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of a majority.”41 Public support for Kim Young Sam, which had fallen to 27 percent in late November, plunged to 14 percent on January 16, 1997, and then to 9 percent by March 20. Encouraged by this public rejection of the president, Kim Dae Jung and Kim Jong Pil launched a national campaign to secure the support of 10 million people to nullify the new laws. Religious leaders and university professors joined together to issue statements of moral protest, and local courts called for a review of constitutionality of the new laws.42 There were even reports of middle-class individuals joining mass protest rallies organized by KCTU, prompting the press to recollect the June uprising of 1987 that brought down authoritarian rule.43 The timing could not have been worse. Hanbo Steel had gone bankrupt in December 1996, taking with it the financial stability of South Korea and the moral integrity of Kim Young Sam’s government. As banks and financial institutions drastically cut back on loans in a panic, a number of chaebol groups went under. There was also a public hunt for culprits and accomplices of the Hanbo fiasco, which exposed illegal flows of political funds to twenty-five assembly members from Hanbo chairman Chung Tae Soo. The public exploded in anger, and the search for the true culprit turned to President Kim’s son, Kim Hyun Chol, who had become a major broker of policy decisions from behind the scenes. In the end, Kim Hyun Chol appeared in a nationally televised assembly hearing and was imprisoned on charges of illicitly influencing state policy through his sajojik (private army of schemers) and raising illegal political funds from business firms. The downfall of Kim Hyun Chol marked the downfall of Kim Young Sam as well. The president was accused of political hypocrisy, exchanging state licenses and permits for political funds with chaebol while publicly portraying himself as a reformer struggling against vested interests. By contrast, the government’s main opponent—KCTU, led by former journalist Kwon Young Gil—proved skillful in mobilizing public support. The success of its political struggle was, however, more a product of what it did not do than what it did in January 1997. Kwon Young Gil felt that a general strike was not an option. If it was successful, KCTU would be accused of paralyzing South Korea’s fragile export economy at a perilous time just to defend its narrow interests. If it failed, it would expose KCTU’s lack of organizational cohesion and discipline and only strengthen the hawks in the Blue House and the ruling party. The dissident federation consequently played a game of hit-and-run, directing individual company unions to take turns in strikes. After each wave of company strikes, Kwon Young Gil pulled back to gauge the public’s reaction,

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and he alternated the sites of confrontation with capital to spread out the costs among a large number of unions.44 This strategy, which resembled guerrilla warfare, not only reduced the organizational costs of protest but also cultivated for KCTU an image of political moderation and social responsibility, of an organization concerned to correct moral wrongdoing. Under intense public pressure, Kim Young Sam finally recanted and met with Kim Dae Jung and Kim Jong Pil on January 21, 1997, to redraw the labor laws on a bipartisan basis. The laws enacted by the National Assembly on March 8 resembled the provisions drawn by the interministerial committee in December 1996, which had provoked threats of a general strike from both FKTU and KCTU and intense criticism from the business community.45 The March laws suffered from an internal contradiction typical of a compromise bill; they did too little to address the structural problems of labor politics but so much that they upset both capital and labor. Employers’ right to lay off workers was recognized, but to placate workers it was permitted only under an “acute” business condition. The issue of union officials’ salaries was similarly evaded when the political parties only agreed to acknowledge the principle of financial independence of unions. Moreover, this independence was to be realized gradually by having both employers and employees contribute to a joint company fund. Likewise, multiple unions were permitted immediately at the federation level but only in three years’ time at the company level. The South Korean political system had failed to bring about a fundamental overhaul of labor politics, but this did not stop the forces of change. What political institutions failed to achieve in 1996 and early 1997 was forced on South Korea by the economic crisis that erupted in November 1997. As more than a third of its thirty largest industrial conglomerates went bankrupt and the specter of default on foreign loans loomed large, South Korea was forced to amend the labor laws once again on February 14, 1998. This time it ended up with a more consistent package of reform. Urgently needing to attract foreign capital, president-elect Kim Dae Jung unambiguously shifted toward a more flexible labor market. The new laws allowed business firms to bring in outside workers on a temporary contract basis and recognized immediately employers’ right to lay off workers, even in cases of mergers and acquisitions. This trend away from both societal corporatism and company welfarism was generated by the compelling historical force of globalization. The February 1998 labor reform was initiated by a new political leader, Kim Dae Jung, known more as a populist than an

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economic liberal. Moreover, the details of the reform were drawn up by a tripartite commission that included not only FKTU but also KCTU. The reform package drew fierce criticisms from labor militants, but it survived these outbursts of anger and frustration and moved South Korea toward the unfamiliar world of a flexible labor market. A revolt by KCTU delegates at a congress convened to review the final reform bill ended in the resignation of the leadership that had helped draft the new labor laws. But their successors’ threat of a general strike was withdrawn within a few days amid wide public criticism. The shift toward a more flexible labor market—made irreversible by South Korea’s financial crisis—caused immense transitional costs. With no other viable policy choice, Kim Dae Jung launched a comprehensive program of economic restructuring as soon as he won presidential power in December 1997, placing both capital and labor under a “shock treatment.” The first phase of restructuring, completed by October 1998 after an injection of 37.7 trillion won, saved South Korea from its worst nightmare of bank closures and default on foreign loans. The unemployment ratio, however, soared—reaching 7.1 percent (over three times higher than South Korea’s “usual” level before December 1997) by July 1998. In panic, financial institutions called in loans en masse, causing a series of major business failures and bringing a layoff of over 1 million workers during 1998 alone. The shock treatment was not over, however. With South Korea’s foreign exchange rate reaching 1,236 won per dollar by July 1998—a drop of 726 won since December 23, 1997—Kim Dae Jung triumphantly launched his second phase of bank restructuring in October and also pushed hard for a chaebol reform since summer 1999, which seemed likely to cause great strain—this time, among South Korea’s best organized chaebol workers. Even amid the crippling financial crisis, South Korea’s electoral democracy remained strong—the only game in town—with no threat of a military coup d’état. However, South Korea has yet to develop the institutional architecture of a mature, pluralistic democracy. The central integrative institution—political parties—remain shallow organizationally as well as ideologically. Despite Kim Dae Jung’s establishment of a tripartite commission on labor issues in 1998, furthermore, South Korea has yet to develop an effective mechanism of policy dialogue between employers and employees. The policy “success” of 1998, in fact, was more a product of the exhaustion of policy choices available to South Korea than a result of broad collective political efforts. The legislature scarcely functioned throughout 1998 and 1999, suffering a “coma” caused by endless

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bickering between governing and opposition party bosses (see Chapter 7), while representatives of labor as well as capital remained in total shock without any policy prescription to offer. South Korea’s political leadership in 1998 and 1999 was strictly presidential, exercised through Kim Dae Jung’s Financial Supervisory Commission, an organization staffed by professional career bureaucrats. Whether such a thoroughly bureaucratized and executive-dominated political system can bring a class compromise and build an enduring consensus on South Korea’s rapidly emerging flexible labor market—a task usually reserved for political parties and interest groups in modern pluralistic democracies—is a crucial question for the country’s political as well as economic future.

NOTES 1. The chaeya are members of the dissident intelligentsia who lead protest movements outside formal political institutions to raise a moral critique of the established order in South Korea. On the June uprising of 1987, see Im Hyuk Baek, “Hankukaeseoui minjuhwa kwajong bunsok: jeonryakjok seontaek ironeul jungsimeuro” (An analysis of democratization processes in South Korea: A theory of strategic choice), Hankuk jeongchi hakheobo 24, no. 1 (1990): 70–71. 2. Choi Jang Jip in “Jaengjom daetoron: gyekeup tahyopkwa nodong undongui jinro” (A debate on major issues: Class compromise and the future path of South Korea’s labor movements), Gyongjaewa sahwae 15 (1992): 104–106. 3. Han Wan Sang, “Hankuk jungkan jaegyecheungui jeongchi uisik” (Political consciousness of South Korea’s middle strata), Gyegan sasang (Winter 1991): 210–217. 4. Choi Jang Jip, “Hankuk nodong undongeun wae gyekeup jojikeuroseoui jojikhwa’ae silpae hago itna” (Why is South Korea’s labor movement failing to organize itself into a class organization?), an article presented at a conference jointly organized by the Korean Political Science Association and Korean Sociology Association in June 1992, p. 13; Im Young Il, “Jeongsae byonhwawa nodong undongui kwajae” (Changes in political equations and the agenda of South Korea’s labor movements), Gyongjaewa sahwae 15 (1992): 56–74. 5. Choi Jang Jip, Hankukui nodong undongkwa guk’ka (The state and labor movements in Korea) (Seoul: Nanam, 1997), pp. 44–46. 6. Choi Jang Jip, “Nodong johapae daehan johapjuuijok tongjae” (The corporatist control of trade unions), in Byon Hyung Yun et al., Bundan sidaewa hankuk sahwae (The age of national division and South Korean society) (Seoul: Kachi, 1985), pp. 191–229. 7. On the ideological trends of South Korea’s chaeya movements after 1980, see Cho Hui Yeon, “Sahwae gusongchae nonjaengui bansongkwa gusipnyondae nonjaengui chulbaljom” (A critical review of ideological polemics on the constitution of society and a new beginning of debates for the 1990s), Gil (December 1992): 187.

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8. Philippe C. Schmitter, “Still the Century of Corporatism?” in Schmitter and Gerhard Lehmbruch, eds., Trends Toward Corporatist Intermediation (Beverly Hills: Sage Publications, 1979), pp. 13–15. 9. This system of state monism is absent in Schmitter ’s typology of modern models of interest intermediation, but it exists implicitly within the logic of his method of classification, since Schmitter too uses organizational form and power flow as two basic dimensions through which similarities or dissimilarities are discerned between the systems of interest politics. 10. See Song Ho Keun, Hankukui nodong jeongchiwa sijang (Labor politics and the labor market of Korea) (Seoul: Nanam, 1991), pp. 19–46. 11. Choi Jang Jip, Hankuk minjujuuiui jogeonkwa jonmang (The condition and prospect of democracy in Korea) (Seoul: Nanam, 1996), p. 325. 12. See Kim Yu Seon, “Jaeyuk gonghwaguk chulbom ihu gusok haego nodongja” (The arrests and dismissals of workers after the inauguration of the Sixth Republic), in Hankuk nodong kyoyuk hyophwae, ed., Jaeyuk gonghwagukui nodong jeongchaek’kwa nodong johapui daeung (Labor policy under the Sixth Republic and the response of trade unions) (Seoul: Hankuk nodong kyoyuk hyophwae, 1992), pp. 36–39. 13. For the most publicized episodes of violence, see Donga Ilbo, February 14, 1989; May 3, 1989; October 17, 1989; April 27, 1991; May 8, 1991; and June 4, 1991. 14. Donga Ilbo, April 27, 1991; and May 8, 1991. 15. Chosun Ilbo, June 5, 1991. 16. Song Ho Keun, Yol’rin sijang, dat’chin jeongchi: hankuui minjuhwawa nodong chaejae (An open market, a closed politics: Democratization and the labor system in Korea) (Seoul: Nanam, 1994), pp. 109, 248–249. 17. On the lack of class consciousness among workers employed in chaebol firms, see Kim Hyong Ki, “Palsip-chilnyon ihu dokjom daegiop nodongjadeului uisik byonhwawa keu hamchuk” (The changes in workers’ consciousness in large monopoly enterprises after 1987 and their implication), Gyongjaewa sahwae 3 (1992): 139–178. 18. The FKTU began to describe itself as a “reformist” force as early as 1988. See Donga Ilbo, November 9, 1988. 19. Donga Ilbo, July 21, 1993. 20. Kim Jun, “Jaeyuk gonghwagukui nodong tongjae jeongchaek” (The policy to control labor under the Sixth Republic), Gyongjaewa sahwae 3 (1989): 26–24. 21. Pak Jun Sik and Cho Hyo Rae, “Dokjom daegiopui nomu kwanri jeonryakae daehan yeonku” (An analysis of labor management strategies of monopoly enterprises), Gyongjaewa sahwae 3 (1989): 42–81; Pak Jun Sik, “Daegiopui singyongyong jonryak’kwa jakopjang kwonryok gwan’gyeui byonhwa” (The new management strategy and changes in power relations at workplaces of large firms), Sahwae bipyong 7 (May 1992): 361–365. 22. Consult Pak Jun Sik, “Sinjungsancheung geunrojadeului uisikjok teuksong yeonku: daegiopui samukwanrijik jongsajadeuleul jungsimeuro” (An analysis of the values and norms of workers belonging to the new middle class: Administrative workers at large companies), Gyongjaewa sahwae 17 (1993): 54–72. 23. Song Ho Keun, Yol’rin sijang, dat’chin jeongchi (An open market, a closed politics), 380–386. 24. Kim Jang Ho, “Choegeun nodong gyongjae donghyangkwa chongaek imkeumjae” (The recent trends in labor economics and the integral

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wage system), a paper presented at a conference organized by the Labor Studies Institute, Korea University, 1992. 25. Cho Wu Hyon, “Gyongjaeryok jipjungi imkeum mit imkeum gujoae michineun yonghyang: jaejo’op pyobon saopchae sarae yeonku” (The effect of economic concentration on wages and wage structures: An analysis of a sample of manufacturing firms), pp. 33–38, an article presented at a conference on labor politics and economics held in Seoul, 1992. 26. Pak Jun Sik, “Nosa gwankyeui daeanjok modelae kwanhan yeonku” (A search for alternative models of labor-capital relations), Hyundae sahwae (Summer 1992): 32–40; Kim Hyong Ki, Hankukui dokjom jabonkwa imnodong (Monopoly capital and wage labor in Korea) (Seoul: Kachi, 1989). 27. For previous halfhearted attempts at labor reform, see Han’gyorae sinmun, May 6, 1993; August 24, 1993; January 5, 1994; and March 3, 1994. 28. See Han’gyorae sinmun, April 2, 1996; June 27, 1996; July 20, 1996; and October 14, 1996. 29. See Han’gyorae sinmun, June 30, 1994, for the ILO’s involvement in South Korean labor politics. 30. See Han’gyorae sinmun, April 17, 1996, May 9, 1996, and August 15, 1996, for the organizational composition of the tripartite commission. 31. See Han’gyorae sinmun, August 31, 1995, for the business community’s growing concern over structural rigidities built into South Korea’s system of company unionism. 32. Han’gyorae sinmun, July 28, 1996. 33. Han’gyorae 21, October 24, 1996, p. 16. For a critical review of the history of conflicts over the principle of “no work, no pay,” consult Kim Se Kyun, “Yukgongui nodong jeongchaek’kwa nodong undong” (Labor policy and labor movements of the Sixth Republic), in Hankuk nodong kyoyuk hyophwae, ed., Jaeyuk gonghwagukui nodong jeongchaek’kwa nodong johapui daeung (Labor policy under the Sixth Republic and the response of trade unions), p. 7. 34. There were already more than 12,000 union officials on company payrolls in 1996. See Park Chong Kyu, “Nosa galdeung, nono galdeungui haeksimeun bapgeureut saum” (The essence of conflict between labor and capital as well as between labor organizations was narrow organizational interests), Wolgan Chosun (January 1997): 237–239. 35. Han’gyorae sinmun, September 20, 1996. 36. Han’gyorae sinmun, November 8, 1996. 37. Han’gyorae sinmun, November 11, 1996. 38. See Han’gyorae sinmun, November 12, 20, and 26, 1996. 39. Han’gyorae sinmun, December 27, 1996. 40. Han’gyorae 21, January 30, 1997, p. 21; Sisa jonol, January 30, 1997, p. 23. 41. Han’gyorae sinmun, January 8, 1997. 42. Han’gyorae sinmun, January 18, 1997. 43. Han’gyorae 21, January 30, 1997, pp. 16–21. 44. See Han’gyorae sinmun, December 31, 1996. 45. Han’gyorae sinmun, February 19, 1997; and March 10, 1997.

6 Democracy and Economic Performance in South Korea Chung-in Moon and Song-min Kim

South Korea has undergone dramatic changes since 1987. The transition to democracy after three decades of repressive, authoritarian rule confirmed the modernization thesis that economic development ultimately leads to democracy. The South Korean case raises an interesting puzzle, however. Its economic miracle has often been understood in terms of elective affinity between an authoritarian regime and economic performance. Developmental statists, for example, attribute it to the active, interventionist state that was able to formulate efficient, coherent, and consistent economic policies and to implement them effectively.1 Such policy management is in turn viewed as a product of state strength and autonomy, which is commonly said to emanate from an authoritarian mode of governance. The authoritarian political template facilitated state autonomy by insulating the state machinery from societal penetration, ensured state strength by employing centralized executive authority and monopoly of resources and policy instruments, and eventually allowed a high growth economy through effective management of the collective action dilemma. If this reasoning holds, then democratization should have posed formidable obstacles to the continued successful performance of South Korea’s economy. For democracy, by definition, is bound to weaken state strength and autonomy by exposing the state and its resources to political bargaining among interest groups. In this chapter we explore this critical question by investigating how democratic changes have affected economic performance in South Korea.2 In tackling this puzzle, we examine contending theories of the relationship between democracy and economic performance, 139

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trace empirical dimensions of economic performance since the democratic opening, and assess the impact of democratic change on economic performance.

BETWEEN DEMOPROSPERITY AND DEMODISASTER: CONTENDING MODELS AND AN ALTERNATIVE VIEW How does democracy influence economic performance? There is no clear-cut answer to this question, not only because of epistemological plurality but also because of ontological diversity in defining democracy and economic performance.3 Nonetheless, two contending paradigms can be identified: demoprosperity and demodisaster.4 The demoprosperity thesis postulates that democracy is not only desirable in itself but also essential for a thriving free market economy. Democracy and economic prosperity are like Siamese twins. The best way to ensure productivity and growth is through the capitalist market economy, and capitalist growth is not possible without corresponding political institutions of liberal democracy. Across time and space, authoritarian regimes have consistently shown poor records of economic growth, whereas democratic polities have enjoyed economic prosperity.5 Democracy enhances economic prosperity in three important ways. First, it helps establish norms and principles conducive to the functioning of a market economy. Liberal democracy is predicated on individual rights and liberties, freedom of choice and responsibility, and the rule of law. All of these are essential for the effective functioning of decentralized market mechanisms. Freer economic transactions cannot take place when political liberties are repressed. Thus, economic and political liberties do not conflict but are interdependent and complementary. Liberal democracy is the best guarantor of political and economic liberties, limited government, and free enterprise, all of which are vital to the promotion of economic growth and prosperity.6 Second, a stable liberal democracy is best suited for securing economic institutions congruent with the free market. As Adam Smith succinctly points out, economic prosperity cannot flourish long in “any state which does not enjoy a regular administration of justice, in which the faith of contracts is not supported by the law.”7 Indeed, capitalist growth cannot be attained without the security of property rights, contract laws, and the provision and development of public and private capital markets. Liberal democracy is the ideal political system to sustain such institutions constitutionally while

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also reducing transaction costs, fostering the free flow of information, and generating trust and certainty in market exchanges.8 Finally, democracy fosters economic prosperity by reducing and redistributing the central power of the state as well as correcting government failures. Most developing countries with an authoritarian mode of governance have suffered dismal economic performances because of excessive state intervention in the economy; private use of economic policies; and pervasive predation, rent seeking, and corruption. Democratic power can correct and even preempt such practices by ensuring popular monitoring and control of the economy, making the state more accountable, responsive, and transparent.9 Empirical evidence in support of these arguments abounds. With a few exceptions (e.g., India), most stable liberal democracies have demonstrated outstanding economic performance in terms of economic growth, equality, and the quality of life. Even among the new democracies of Latin America, no trade-off between democratic opening and economic performance has been detected. Karen Remmer finds that democratization in Mexico and South America has not reduced the government’s capacity to manage debt crises but rather has been supportive of macroeconomic performance.10 Arthur Goldsmith also suggests that countries with democratic and capitalist institutions show better economic performance than those without. He articulates the essence of the demoprosperity thesis: Both competitive political norms and market-oriented economic rules are associated with faster economic growth in the transitional countries. All other things being equal, a growing economy makes it easier to manage demand from citizens for material improvement in their lives. Because of the likely feedback effect from the economy to society’s institutions, rising prosperity should help anchor both economic and political liberties. A virtuous cycle is conceivable, with economic growth and institutional innovation reinforcing each other.11

The demoprosperity thesis, reflecting the Anglo-Saxon tradition, has served as a hegemonic ideology wrapped in the modernization paradigm. After a brief retreat in the 1970s, it has recently resurfaced with the revival of neoliberal ideology. But a number of scholars have challenged its validity. According to the demodisaster or “authoritarian prosperity” theory, democracy obstructs rather than facilitates economic performance.12 Two lines of reasoning are advanced for this assertion. The first line of reasoning is based on empirical findings from developing countries. Newly independent countries under a premature

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democracy were littered with failed dreams of economic prosperity. A vicious cycle of rising expectations, excessive loads on the political system, institutional deformity, and subsequent social and political instability brought about economic decay. Military intervention and authoritarian regimes were often justified for the sake of restoring stability, fostering economic development, and breaking the vicious cycle. Underlying this line of reasoning is the assumption that economic growth cannot be achieved without social and political stability. Authoritarian rule was thus seen to have an “elective affinity” with economic growth, at least for many developing countries.13 The second line of reasoning centers around the problems of economic performance and policymaking in more mature democracies. Pluralist democracies are inherently vulnerable to interest group and pork-barrel politics. Organized groups lobby for their own special interests—preferential taxes and regulations, welfare and transfer payments, wage increases, and so on—at the expense of the general welfare. The politics of distributional pressure generates collective action dilemmas that distort markets and weaken overall economic performance. A stable democracy facilitates the formation of cartelistic distributional coalitions that capture or dominate the state in order to collect rents. This phenomenon distorts resource allocation and retards economic growth.14 For some time, East Asian experiences offered strong empirical support for the demodisaster thesis. South Korea, Singapore, and Taiwan all recorded remarkable economic performance under repressive authoritarian regimes. Authoritarian regimes in East Asia are seen to accelerate economic growth by consolidating decisionmaking power in the hands of executive leadership while insulating economic policymaking from the pressures of distributional politics. Depoliticization enabled these regimes to formulate efficient, coherent, and consistent economic policies and implement them effectively. The “political elite autonomy from distributional pressures” afforded by authoritarian rule was seen to “increase government’s ability to extract resources, provide public goods, and impose the short-term costs associated with efficient economic adjustment.”15 Several empirical studies found that economic growth was much faster under authoritarian rule.16 Both the demoprosperity and demodisaster theories present powerful analytical constructs and empirical evidence. It is fallacious to deduce economic performance solely from political regime types, however. Statistical analyses tell us only about correlations; they seldom enlighten us about the structure of causation between

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the two factors. In the dynamic world of real economic life, numerous variables can intervene to influence the relationship interactions between regime type and economic performance. Social structure, culture, boom-and-bust cycles of international and domestic economy, and policy mechanisms, many of which are context-bound, can play a more crucial role in shaping economic performance. As Peter Evans demonstrates, regime type alone cannot predict economic performance. From the 1960s through the mid-1980s, Zaire and South Korea were both authoritarian, but there was a huge difference in their economic performance. The difference stemmed from the nature of social norms and networks. South Korea had a developmental state with a high degree of embedded autonomy, whereas Zaire was a predatory state with fragile and fragmented links to its society. Peter Gourevitch also asserts that political regimes are important in the sense that they lay institutional foundations, but institutions alone do not dictate policy choice and economic performance. They simply constrain choice by setting the rules of the game. It is, thus, essential to elucidate the dynamics of leadership choice and to trace how such choice influences the nature of economic performance.17 Indeed, deducing economic performance solely from the institutional or political configuration (e.g., strong versus weak state, or authoritarian versus democratic regime) may commit the fallacy of secondary causation.18 One must thus examine more closely how policy choices are driven by the political logic of survival, legitimacy, and popular support at uncertain conjunctures. Our findings in this chapter by and large support this third, more eclectic approach. It is quite difficult to establish a causal relationship between regime type and economic performance. A close observation of South Korea’s developmental trajectory reveals that hard times and good times have occurred regardless of regime type. Economic performance has been determined by a confluence of circumstantial conjunctures, microeconomic foundations, and leadership choice and policy capacity. The rise and fall of the South Korean economy since the democratic opening in 1987 underscores this point very clearly.

DEMOCRATIC CHANGES AND ECONOMIC PERFORMANCE IN SOUTH KOREA How have democratic changes affected economic performance in South Korea? Before exploring this question, it seems logical to

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trace and assess the patterns of economic performance in broad comparative terms across different regimes.19 Table 6.1 presents a summary view of overall trends in macroeconomic performance since the early 1970s. No one would dispute the overall success of economic performance during the Park Chung Hee period. Park was the architect of developmental dictatorship. His obsession with modernization and export-led growth severed the vicious cycle of poverty and underdevelopment. During the latter period of Park’s rule, the Yushin period (1973–1979), an ambitious strategy of industrialization centering on heavy and chemical industries produced a remarkable economic growth averaging 10.5 percent. Industrialization was accelerated and deepened, and exports of manufactured goods were considerably expanded, but economic growth was predicated on relatively high inflation and chronic current account deficits (see Table 6.1), and Park’s “big push” strategy based on the heavy and chemical industries ultimately resulted in economic disaster. Overinvestment without regard to inflationary consequences and a hostile international environment of high interest rates and high oil prices drove the South Korean economy to the brink of collapse. South Korea recorded a negative growth rate (–5.5 percent) in 1980. The current account deficits rose to $5.5 billion with an outstanding foreign debt of $43 billion. Inflation soared to over 30 percent. Table 6.1

Macroeconomic Performance by Regime Type

Regime Park Chung Hee Chun Doo Hwan Roh Tae Woo

Kim Young Sam

Year 1973–1979a 1981–1987a 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997b

Growth Consumer Rates Price Index 10.5 9.5 12.0 6.9 9.6 9.1 5.0 5.8 8.6 8.9 7.1 5.9

15.9 6.1 7.1 5.7 8.6 9.3 6.2 4.8 6.2 4.5 5.0 6.6

Current Account Balances (in U.S.$ billion) 1.4 2.8 14.2 5.1 –2.2 –8.7 –4.5 0.38 –4.5 –8.9 –23.7 –13.8

Sources: Bank of Korea, Economic Statistics Yearbook (various years); Samsung Economic Research Institute, Principal Economic Indicators, no. 268 (November 1997). Notes: a. Annual average. b. Estimated.

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Chun Doo Hwan, who seized political power through a military coup in 1980, met the formidable task of reviving the South Korean economy. South Korea’s macroeconomic performance under Chun was outstanding, especially in light of the economic legacy inherited from the Park period. During Chun’s reign, economic growth averaged 9.5 percent, while inflation was held to 6.1 percent annually. The average annual current account surplus ($2.8 billion) was twice the average deficit under Park. Despite political and social turmoil associated with democratic opening, the Chun regime recorded splendid economic performance in 1987, its final year. Economic growth soared to 12.3 percent, one of the highest rates in South Korea’s history. The current account balance also marked a record high surplus ($9.9 billion). Meanwhile, inflation was kept to 3 percent and unemployment to 3.1 percent. Gross domestic savings and investment as a share of gross national product (GNP) reached 37.3 percent and 30 percent respectively, both quite high. The high-performing recovery was steered partly by an aggressive pursuit of macroeconomic stabilization and structural adjustment after 1981. As part of macroeconomic stabilization, Chun undertook a tight fiscal and monetary policy by trimming government budgets, cutting subsidies, freezing wages, and restraining credit allocation. At the same time, his structural adjustment plans aimed at rationalizing industrial structure, streamlining competition policy, restructuring the banking and financial sectors, and liberalizing foreign trade and investment.20 The neoliberal policy offensive victimized workers and farmers through wage cuts and removal of farm subsidies. Tight credit allocation and realignments of competition policy also caused hardships to big business. Yet the reforms were implemented without interruption. Leadership commitment, clearly defined ideological objectives, and unity of bureaucratic purpose, all of which were supported by the authoritarian mode of governance, led to the successful implementation of the reform program. But the authoritarian regime and related institutional arrangements did not offer sufficient conditions for the second coming of the South Korean economy. The draconian neoliberal reforms coincided with highly favorable conditions in the international economy. The “three lows” (low interest rates, low oil prices, and low currency rates) served as major catalysts for reviving the South Korean economy in the mid-1980s. As the above review shows, authoritarian rule was not always conducive to economic performance. The Chun regime performed relatively well, but Park’s Yushin regime produced a disaster in the end. Given this conflicting information, how has the South Korean economy performed under democracy? As T. J. Cheng and Larry

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Krause correctly point out, the period of democratic opening and transition was negatively correlated with macroeconomic performance.21 Chun’s remarkable economic recovery was significantly jeopardized during the Roh Tae Woo government. Economic growth plummeted from 12.9 percent in 1986 to 5.0 percent in 1992. A record high current account surplus in 1987 turned into net deficits starting in 1990, culminating in a deficit of $8.7 billion in 1991. Inflation also increased from 2.7 percent in 1986 to 9.3 percent in 1991 and then dropped to 6.2 percent in 1992. Despite slight improvements in gross domestic savings and investment as well as in employment, the South Korean economy was not able to regain its full vitality. The economic downturn, which started in 1988, lasted more than sixty-two months, becoming the longest recessionary trend in South Korean history. The downturn was a product of several economic factors: global recession and increasing protectionism in advanced industrialized countries; fierce competition from other newly industrialized countries (NICs), second-generation NICs, and China; limits on technological breakthroughs; and overconsumption. However, democratization and leadership incompetence were equally to blame for the decline. While frequent labor disputes and wage hikes weakened the competitiveness of the corporate sector, the new democratic landscape made the Roh regime’s macroeconomic management increasingly erratic, severely reducing policy credibility. Upon his inauguration, Roh pledged to undertake extensive economic reforms such as the reduction of economic concentration, implementation of the “real-name” financial transaction system, and the adoption of progressive labor and land-related laws. When the reform efforts, combined with contractionary macroeconomic policy, began to produce a recession, Roh radically swung back to expansionary, pro-business policies, overheating the economy through rampant real estate and stock market speculations. Inflationary pressures soared, and social and political discontents were heightened amid grave distributional consequences. The Roh regime again turned back to a contractionary stance. The frequent policy swings undermined the administration’s policy credibility and threw the private sector into disarray.22 Incompetent economic management, bureaucratic fragmentation and inefficacy, and increased political sensitivity to economic issues not only impaired the coherence and consistency of macroeconomic policy but also lowered public confidence in the national economy, spoiling overall economic performance during the Roh period.23 With the inauguration of Kim Young Sam’s government in 1993, however, the South Korean economy revealed signs of recovery.

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From a rate of 5.8 percent in 1993, economic growth recovered to 8.6 percent in 1994, 8.9 percent in 1995, and 7.1 percent in 1996. Inflation was tamed, peaking at 9.3 percent in 1991, then declining to 4.8 percent in 1993, 6.2 percent in 1994, 4.5 percent in 1995, and 5.0 percent in 1996. Unemployment fell to 2.0 percent in 1995, a record low. Both gross national savings and investments returned to an annual average level exceeding 35 percent. One uncertainty was the balance of payments. South Korea enjoyed a current account surplus of $380 million in 1993, but it deteriorated over time, with deficits mounting from $4.5 billion in 1994 to $8.9 billion in 1995 and a record $23.7 billion in 1996.24 In 1997, the last year of Kim Young Sam’s presidency, macroeconomic performance was still favorable: about 6 percent growth rate, 6.6 percent inflation rate, and improved current account balance in the first three quarters. Then came the sudden collapse of the South Korean economy in November 1997, alarming the entire world. After a series of financial and foreign exchange crises, the Kim Young Sam government filed for national bankruptcy by seeking a $57-billion bailout arranged by the International Monetary Fund (IMF) on December 3, 1997. The myth of the South Korean economic miracle was shattered, and national shame prevailed. What went wrong? Beneath the presumed “healthy fundamentals” of South Korea’s macroeconomy, microeconomic foundations slid into deep trouble.25 Table 6.2 presents data on the dark side of the South Korean economy under the Kim Young Sam government. During his term in office, South Korea’s foreign debts increased from $43.9 billion in 1993 to $160.7 billion in 1996 and $153 billion in 1997, and foreign reserves dwindled from $20.2 billion in 1993 to $12.4 billion in 1997. At the peak of the currency crisis, foreign reserves held by the central bank were less than $8 billion, spreading the fear of default. With foreign reserves so depleted, the South Korean currency rapidly depreciated, falling from a value of 808 South Korean won to the U.S. dollar in 1993 to a value of 1,415 won to the dollar at the end of 1997. At one point, the won traded at 2,000 to the dollar. More troublesome still was the private sector. As Table 6.2 illustrates, the banking and financial sector as well as the corporate sector exhibited their worst performance in recent history. The average annual stock price index, which rose from 866.16 in 1993 to 1,027.4 in 1994, slid back through 1995–1996 and collapsed to 375 by the end of 1997, the lowest since the opening of security markets. Falling stock prices amid rapid currency devaluation drastically reduced the asset values of South Korean firms. An analysis by the Financial Times at the end of 1997 put the total assets of all 653 South

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Table 6.2 Selected Indicators of Financial and Foreign Exchange Profile Under the Kim Young Sam Government

Foreign debts (in U.S.$ billion) Foreign reserves (in U.S.$ billion) Exchange rates (won: U.S.$) Stock price indexb (January 1980 = 100) Nonperforming loans (in trillion won) Ratio of dishonored bills Savings rate (private sector) Kim’s popularity

1993

1994

1995

1996

1997

43.9

56.9

78.4

160.7

153.0

20.2

25.7

32.7

33.2

12.4

808.1

788.7

774.7

844.2

866.16 1,027.4

822.9

651

1,415a 375

2.4

1.9

2.3

2.4

4.8c

0.13 26.7

0.18 26

0.2 25.7

0.17 23.7

0.24d 22.4

88.3

55

44.9

28

13.9

Sources: Compiled from various sources: Samsung Economic Research Institute, Principal Economic Indicators (November 1997); Bank of Korea, Monthly Report; Korea Money (December 1997): 26–29; Weekly Chosun, January 1, 1998, 98–99. Notes: a. As of December 30, 1997. b. Annual average, except the figure for 1997 is that of December 30, 1997. c. As of September 1997. d. As of September 1997.

Korean firms listed on the Korean Securities Exchange Market at only 66.3 trillion won—equivalent to the assets held by just one international conglomerate (and only the world’s seventieth largest), the Dutch banking and financial firm ING Group.26 Another telling indicator of microeconomic health is the size of nonperforming loans, which reveals the magnitude of corporate bankruptcy. The total value of nonperforming loans was 2.4 trillion won in 1993 and 1.9 trillion won in 1994. By the end of September 1997, the figure had risen to 4.8 trillion won. And this was only the official figure. With the avalanche of corporate bankruptcies, including major chaebol such as Hanbo, Kia, Jinro, Dainong, Newcore, and Halla,27 the IMF estimated in 1997 that nonperforming loans amounted to a staggering 32 trillion won, about 7 percent of gross domestic product (GDP), in 1997. 28 This literally paralyzed the banking and financial sector, precipitating the financial crisis. By the end of September 1997, nonperforming loans accounted for 6.8 percent of total bank loans. In addition, most firms in South Korea, especially small and medium-size ones, have traditionally relied on discount of corporate bills such as promissory notes in raising corporate funds. Thus, a high ratio of dishonored corporate bills implies a severe liquidity shortage and greater corporate delinquency.

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In the first three quarters of 1996, the ratio of dishonored corporate bills was 0.24 percent, a huge increase from 0.13 percent in 1993. Of course, economic performance encompasses not only growth, inflation, employment, and stability but also equality and the quality of life. How did the democratic administration of Kim Young Sam perform on these latter two dimensions? Democratic changes brought about high expectations for improvements in income and distribution of wealth as well as in quality of life, since the past developmental dictatorship had by and large sacrificed these goals for economic growth and national security. Data show that democratic changes have been positively correlated with income equality. The Gini index of income distribution improved from 0.3057 in 1979 and 0.3065 in 1987 to 0.2836 in 1992 and 0.2608 in 1994. But the distribution of wealth left considerably more room for improvement. The top 1 percent of the national population accounted for 27.9 percent and the top 5 percent for 50.6 percent of all landholdings in 1987. In the same year the top 10 percent of South Koreans held 41 percent of financial and savings assets. The picture has not improved much since. In 1994 the Gini index of interests and dividends was 0.477. Though an improvement from 0.604 in 1987, it still reflects a skewed wealth distribution in South Korean society.29 During his tenure, President Kim Young Sam emphasized the goal of improving the quality of life. According to a survey conducted by the Ministry of Information in November 1996, however, South Koreans did not appear to be satisfied with the quality of life since the democratic transition. On a 100-point scale, South Koreans rated the quality of life at only 52.3, while respondents in other countries in the Organization for Economic Cooperation and Development (OECD) rated the quality of life on average at 80 to 90 points. In particular, South Koreans’ satisfaction with nonmaterial values such as safety, stability, convenience, and comfort was much lower than with their feelings about material values.30 On balance, economic performance during the period of democratic change has been mixed, revealing both good and hard times. Compared with past authoritarian regimes, however, overall growth performance since the democratic opening has been weak. Erosion of microeconomic foundations, economic collapse, and the IMF bailout marked the ending of the Kim Young Sam government, the first authentic civilian regime since 1960. President Kim’s popularity declined from a record high 88.3 percent in 1993 to 13.9 percent in January 1997. Following the IMF arrangement, his approval rate hit rock bottom. It is sad and ironic that progress toward democratic consolidation during Kim Young Sam’s presidency, manifested not

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only in a number of political reforms but in the first transfer of government power to the opposition through the December 1997 presidential election, was overtaken by the legacy of economic collapse.

ECONOMIC DOWNTURN AND DEMOCRACY: ARE THERE ANY CAUSAL RELATIONSHIPS? The examination of economic performance since 1987 reveals a sequence of recession, recovery, and collapse in parallel with the stages of democratic opening, transition, and consolidation. This raises several questions: Why did the economy under Kim Young Sam suddenly collapse? To what extent were democratic changes responsible for it? Did political progress toward democratic consolidation undermine economic performance? Tracing the root causes of the economic crisis is not easy since it involves dynamic interactions among multiple causal variables. But what is beyond dispute is that international competitiveness and corporate performance matter. If private firms were able to maintain their competitive edge, such economic disaster could not have taken place. Unlike macroeconomic performance, a nation’s competitiveness in the international economy cannot be easily operationalized. Subjective assessments must also be weighed. The International Management Institute (IMI) and World Economic Forum (WEF) annually issue global rankings of competitiveness based on several indicators such as domestic economy, social infrastructure, government sector, industrial relations, human resources, finance and banking, corporate management, internationalization, and so on. According to their assessments, South Korea’s ranking has consistently declined over time. South Korea ranked eighth among forty-one sample countries and third among eighteen developing countries in 1991. But it fell to twenty-seventh overall in 1994 and thirtieth in 1996, lagging behind even Malaysia and China.31 Both institutions have repeatedly pointed out that although the national economy and social infrastructure have improved in South Korea, the government sector, corporate management, and internationalization have remained major impediments. Corruption, bureaucratic red tape, extensive government intervention in markets, mercantile practices, and unruly corporate governance have been identified as major variables constraining South Korea’s competitiveness. Another way of determining competitiveness is to look into the patterns of trade specialization that illustrate sectoral performance. The trade specialization index is used here because it can tell the

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degree of sectoral competitiveness in a more dynamic way.32 This index reveals that South Korea’s competitiveness in the manufacturing sector has weakened over time. During 1981–1985, the average index of trade specialization in the manufacturing sector was 16.8 percent, but it has gradually declined since 1989. It was 5.6 percent in 1994, comparable to Taiwan’s (6.5 percent) but quite low compared with Japan’s (44.9 percent). In 1994, South Korea maintained a competitive edge in textiles and apparel (57 percent), electronics (28.7 percent), semiconductors (25.8 percent), automobiles (44.1 percent), and metal products (38.5 percent). In other areas, however, an overall decline was visible. Changes in factor prices help to explain this trend. In particular, South Korea’s wage costs have increased significantly since the democratic opening in 1987. For South Korea, the rate of increase in unit labor costs was 8.3 percent in 1994, whereas it was 0.8 percent for Japan and 2.4 percent for Taiwan. Although South Korea, Japan, and Taiwan all show somewhat cyclical patterns in unit labor costs, South Korea’s labor costs were the highest among the three. In plain terms, an average monthly wage in 1987 was $400, but it rose to $1,000 in 1992 and $1,550 in 1997.33 Capital costs were also very high, compared with those for Japan and Taiwan. As of 1994, the average interest rate was 11.4 percent in South Korea, 4.8 percent in Japan, and 7.2 percent in Taiwan. South Korea was the highest among the three in financial burden ratio, measured in terms of financial cost as a share of net sales. The ratio was 5.6 percent for South Korean firms in 1994, 1.8 percent for Japanese firms, and 2.2 percent for Taiwanese firms. In the aftermath of the IMF bailout, interest rates (i.e., yields on corporate bonds) zoomed to 23 percent in 1997, almost a twofold increase from 1993. At one point in December 1997, yields on corporate bonds reached more than 40 percent. Such high capital costs led to low corporate profits and low investments in facilities.34 Along with high costs in wages and capital, unbearably high costs of land, storage and distribution, and overall input materials have significantly eroded competitiveness on the supply side. One way to overcome declining competitiveness amid high factor prices is technological innovation. According to a recent survey, South Korean firms cited technology as the most critical barrier to their export competitiveness. 35 Along with industrial transformation from labor-intensive to technology-intensive sectors, South Korea has considerably expanded its investment in research and development. Its expenditures in that area rose from the meager amount of $430 million in 1980 to $1.4 billion in 1985 and $9.8 billion

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in 1994. Research and development as a share of GNP also jumped from 0.77 percent in 1980 to 2.4 percent in 1994. Despite such an upward trend, in both relative terms and actual dollar amounts, South Korea has lagged far behind the United States and Japan, which spent $160 billion and $134 billion in 1993, respectively.36 Lagging technological innovation has placed South Korea in an awkward position, sandwiched between technological forerunners and industrial latecomers. An equally important nonprice factor undermining export competitiveness has been government regulations. Since the democratic opening in 1987, as part of a globalization campaign, the South Korean government boldly attempted to ease economic regulations while strengthening social and environmental regulations. Compared with OECD countries, however, economic regulations were still extensive and deeply entrenched.37 One comparative example may help clarify this point. As of 1994, it took 530 days for a firm to build a plant in South Korea once it had made the decision to do so. The firm had to prepare 382 documents and to muddle through more than fifty-four government agencies from local administrators to the central government. Twenty-seven legal statutes governed this regulatory regime. In contrast, it only took 145 days to complete a plant in the United States and 188 days in Taiwan. Even in Japan, with its monstrous bureaucracy, it took less time, 284 days.38 Given the short life cycles of cutting-edge technologies, this type of bureaucratic red tape imposed an enormous burden on the private sector. Even more troublesome has been corporate performance. In order to enhance competitiveness, private firms, especially big business, aggressively engaged in corporate expansion through mergers and acquisitions as well as excessive investments in production facilities. Unfortunately, the moves were undertaken with borrowed money. In 1993, the top four leading chaebol (Samsung, Hyundai, Daewoo, and LG) borrowed 12.4 trillion won from commercial and merchant banks. The total amount rose to 25.5 trillion won as of June 1997. The amount of the loans given to the top thirty chaebol also increased from 59 trillion won in 1992 to 76.7 trillion won in June 1997. Short-term debts accounted for most of these loans (63.3 percent). Consequently, the debt-equity ratio for major firms reached a perilous average of 300 percent in 1996.39 Cutthroat competition, weakening export prices, and high financial expenses of short-term debts began to eat into the profitability of corporations. As of the end of 1996, the top thirty chaebol’s operating profit margin after deducting capital expenses was only 2.8 percent. The situation was much worse for other firms.40

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Starting with Hanbo Steel, several chaebol (Sammi, Jinro, Dainong, Kia, Newcore, and Halla) went bankrupt in 1997. Unlike in the past, the government failed to prevent their collapse because their debts were too big for the government to bail out. The domino effects of one corporate bankruptcy after another then panicked major lending institutions, which were stuck with an immense load of nonperforming loans. Witnessing a major financial crisis, international credit rating agencies such as Standard and Poor’s and Moody’s began to downgrade South Korea’s overall creditworthiness. As a result, banking and financial institutions, which have heavily relied on short-term loans from the overseas banking community, could not borrow anymore, straining domestic financial and foreign exchange markets. To cope with the liquidity crisis caused by nonperforming loans and the cutoff of overseas loans, domestic commercial and merchant banks rushed to collect their loans en masse and suspended any further loans. Money pipelines for firms quickly dried out, fostering their collapse, and foreign exchange markets turned extremely unstable. The poor international credit rating also precipitated an exodus of foreign investors from South Korea’s securities markets, triggering a sharp decline in stock prices, while interest rates skyrocketed. Several merchant banks and securities firms went bankrupt, and corporate bonds were left idle. The entire South Korean economy crumbled, making the pursuit of an IMF bailout inevitable in order to avoid a default on debt servicing. Judging from the information above, the South Korean corporate sector, especially big business, was the primary causal agent of the economic crisis in 1997. Its recklessly excessive investment with borrowed money sowed the seeds of the financial fiasco. However, South Korea’s financial sector cannot avoid blame. As the IMF aptly pointed out in its memorandum to the South Korean government, financial institutions priced risks poorly and were willing to finance an excessively large portion of investment plans of the corporate sector, resulting in high leverage. Financial institutions’ lack of market orientation, coupled with lax prudential supervision, contributed to worsening the financial crisis. The government was equally liable. Despite repeated pledges to reform South Korea’s corporate governance structure and jeongkyong yuchak (political-business connections), the old practices were not wiped out. Credit allocations were still heavily influenced by political connections, and cross-investment and cross-payment guarantees among subsidiaries of chaebol were allowed as leverages for excessive borrowing and corporate expansion. The Hanbo scandal presents a classical example. Despite bleak business prospects

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and a low ratio of self-owned capital (about 300 billion won), Hanbo Steel was able to borrow 5 trillion won for investment in a steel plant. It was later revealed that political influence played an important role in securing loans for Hanbo. Kim Hyun Chol, son of President Kim Young Sam, and an array of politicians from both ruling and opposition parties were implicated in exercising influence over the banks’ loan decisions. The Hanbo case was just the tip of the iceberg. A great portion of bank loans were arranged through political connections (as evidenced in the huge slush funds accumulated by former presidents Chun and Roh). Lack of competence and knowledge on the part of the top leadership was the most critical element in the precipitous escalation of the financial and foreign exchange crisis. President Kim was totally ignorant of economic policy and left its management to his aides, but they were divided on the diagnosis of and prescriptions for the impending crisis. The Bank of Korea (BOK) alerted Kim to the danger of the foreign exchange crisis as early as July 1997, but the Ministry of Finance and Economy (MOFE) and the presidential economic secretary downplayed it, emphasizing the “healthy fundamentals” of the macroeconomy. Kim was not aware of the severity of the situation until President Bill Clinton phoned him about the necessity of an IMF rescue in late November. Kim’s aides thought they could put off the IMF bailout until the end of Kim’s tenure as president in February 1998. His poor monitoring and mismanagement aggravated the crisis by causing Korea to miss the moment for effective intervention. Worse still was inconsistent policy management, fluctuating between contractionary and expansionary, antibusiness and probusiness, and interventionist and laissez-faire policies. Disregarding inflationary consequences, the Kim government undertook in its first year an expansionary policy to stimulate the economy. Then it switched to contractionary policies. The Kim government’s earlier efforts to discipline big business and to resolve economic concentration also failed. Microeconomic intervention continued despite the government’s pledge to liberalize and deregulate the economy as required by the Uruguay Round of world trade negotiations and South Korea’s admission to the OECD. Such policy instability was further aggravated by frequent reshuffling of the economic cabinet. During the Kim Young Sam government, the position of deputy prime minister in charge of finance and economy was changed seven times because of policy failures such as price instability, current account deficits, and the Hanbo scandal; the average tenure in this office was less than eight months. It is virtually impossible for

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the minister of finance and economy to formulate and implement consistent and coherent economic policy with such a short tenure.41 Serious mistakes on the part of the economic policy bureaucracy also helped to precipitate the economic crisis. Apart from interagency feuds, the BOK and MOFE failed to supervise the banking and financial community as well as to monitor the flow of shortterm liquidities. MOFE was not able to present correct statistics on short-term debts, creating another round of foreign exchange crises even after reaching an agreement with the IMF on rescue financing. Once touted as a hallmark of bureaucratic competence, MOFE became the primary target of distrust by South Koreans and the overseas financial community. The South Korean mass media designated MOFE as the first target for restructuring, and some even proposed its outright dissolution.42 Bureaucratic indecisiveness, particularly in the handling of the Kia Motors case, also contributed to triggering the financial downturn. Kia Motors, the seventh-largest business conglomerate in South Korea, was on the verge of bankruptcy in the summer of 1997. The government’s original plan was to let Kia go bankrupt. But two factors delayed the government’s final decision: public critiques and the conflicts of interest involving Kang Kyungshik, then deputy prime minister. The public knew that the plight of Kia Motors was engineered by the Samsung Group, which had long attempted to take it over. Kia had a better public image because of its ownership structure, whereas Samsung was blamed for its ruthless business ethics. In the Kia-Samsung bout, the public sided with Kia, making the latter ’s bankruptcy politically difficult. Meanwhile, Kang, while serving as a national assemblyman from Pusan before his appointment as deputy prime minister, played a key role in bringing Samsung’s new auto plant to the Pusan area. Thus, Kang’s initial efforts to let market logic prevail over Kia were interpreted as a conspiracy with Samsung to kill Kia. Kang was hesitant, and after a three-month delay, the government announced that it would turn Kia into a public enterprise. Both the government’s prolonged indecision and its ultimate decision to bail out Kia Motors betrayed the expectations of foreign investors and significantly damaged the government’s credibility.43 In sum, the economic collapse under Kim Young Sam can be seen as a product of multiple factors involving declining international competitiveness, delinquent corporate governance structure, and government failures. Then to what extent are democratic changes accountable for the economic downturn? It is not easy to draw conclusions about the relationships between democracy and economic

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performance in South Korea’s postauthoritarian era. On the macroeconomic side, deteriorating current account deficits were related more to exogenous factors than to democratic changes. Multilateral and bilateral outside pressures, a relatively rapid opening of domestic markets, weakening export prices, and South Koreans’ preference for foreign products, coupled with deficits in the nontrade sector (e.g., overseas tourism), contributed to the worsening balance of payments. Undoubtedly, democratic changes were partly to blame for declining competitiveness. The sharp rise in wages, averaging 7.8 percent annually in real terms during 1987–1996, undercut South Korea’s competitive edge in the supply side, and high wages resulted partly from tough political bargaining by trade unions following the democratic opening. But labor market conditions also contributed to rising wage costs. More important, a close examination of statistical data on wages shows that wage hikes have not critically harmed South Korea’s international competitiveness. The textiles and apparel industry, a labor-intensive sector, still retains some of its competitive edge, and export items that have gained a new competitive edge (e.g., semiconductors and machinery) are by and large less labor-intensive. Thus, South Korea’s declining competitiveness in international markets cannot be ascribed solely to wage hikes. During the democratic transition, labor disputes and frequent work stoppages were cited as the single most important variable negatively affecting economic performance. As democracy in South Korea has become more mature, however, labor unrest has become a less salient factor. Labor disputes peaked in 1987 with 3,749 cases and then drastically decreased to 144 cases in 1993, 121 in 1994, 88 in 1995, 85 in 1996, and 78 in 1997.44 Some argue that the financial crisis ensued partly because of premature implementation of the “real-name” financial transaction system, which is often regarded as one of the most important democratic reforms under Kim Young Sam. Being introduced too early, these critics assert, the reform depressed private savings (see Table 6.2), precipitated overconsumption, and ultimately distorted the flow of capital. In the face of such accusations, the Kim Young Sam government relaxed the restrictions, allowing, for example, the purchase of long-term government bonds under “nonreal” names and the temporary suspension of comprehensive taxation on earnings from financing and savings assets. But the criticism is quite misleading. No concrete evidence surfaced to prove the negative effects of the real-name reform on economic performance.45 On the contrary, it made an enormous important contribution by removing

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“bubbles” from the South Korean economy as well as ensuring transparency, certainty, and even fairness in economic transactions. Were it not for this reform, the arrest of the two former presidents and several other politicians on corruption charges could have never been possible. Democratic changes cannot be blamed for other barriers to creating a sound economy. High capital costs have virtually no relationship to democratic changes but result from backward and relatively closed domestic financial and capital markets. Uninterrupted implementation of democratic reforms could have lowered capital costs by accelerating liberalization, rationalization, and internationalization of the banking and financial sectors. Although there are no direct causal relationships between democratization and science and technology, democratic consolidation has coincided with a rapid increase in research and development investments. Likewise, various institutional reforms followed by democratic opening have been more conducive to economic performance. It was delay in the implementation of democratic reforms that ruined the South Korean economy, not vice versa. If the government had been able to sever the corrupt links between politics and big business, debt-driven corporate expansion and the proliferation of nonperforming loans could have been prevented. Similarly, had the Kim Young Sam government moved ahead on its promise of reforming the highly concentrated, opaque, and unaccountable structures of the chaebol, with their intricate mutual payment guarantees and their lack of accountability to the broad bulk of shareholders, South Korea’s corporate sector would have been much less vulnerable to the catastrophe that befell it when crisis hit the banking sector. Finally, government failures cannot be seen as a product of democratic changes. Under the constitutional design of the presidential system, the Kim Young Sam government continued to enjoy executive dominance. It is true that Kim’s populist sentiment and oversensitivity to the mass media—elements of democratic responsiveness—impaired his economic management to some extent. But what mattered most was his dismal leadership ability. A failing of liberal democracy is that popular elections do not always guarantee the selection of competent leadership, but neither do military coups or one-party rule. Bureaucratic fragmentation did not stem from democratic changes but from the political leadership’s inability to control and direct the bureaucrats. In addition, the South Korean economy has become too large, complex, and dynamic to be guided, controlled, and monitored by a vast economic bureaucracy. Nevertheless, bureaucratic indecisiveness can be accounted for by

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democratic changes. Public opinion and political feedback served as major deterrents to a more decisive and resolute handling of delinquent firms. In sum, democratic changes affected economic performance, but not in a critical way. On the contrary, the delayed implementation of democratic reforms aggravated economic hardships. If the Kim Young Sam government had eradicated the legacies and inertia of past developmental governance more aggressively, unruly corporate expansion by chaebol and the paralysis of the banking and financial system could have been avoided. In a sense, the economic trusteeship by the IMF since 1997 can be seen as the price South Korea paid for the lack of progress in economic reforms before 1997.

ECONOMIC REFORM UNDER KIM DAE JUNG One of the most powerful pieces of evidence controverting the demodisaster perspective is the dramatic success that the new government of Kim Dae Jung achieved in economic reforms in the months following his assumption of the presidency in February 1998. In all three critical areas of distortion in South Korea’s economic structure—labor, banking, and the chaebol—the Kim Dae Jung administration implemented far-reaching reforms.46 Labor Reform One of the first obstacles to implementing the IMF conditionalities was the strict employment regulations that made it difficult to lay off workers or to hire temporary workers. These regulations not only kept wages high but also impeded corporate restructuring efforts. A March 1997 revision of the labor laws led to some improvements (for the first time providing explicit conditions for layoffs and giving firms some flexibility in determining working hours). Because of strong labor opposition, however, the government put a two-year hold on the implementation of the new regulations. Moreover, the conditions for layoffs specified in the new regulations were too narrow. Firms were not allowed to lay off workers when they merged with or took over another company. After the IMF bailout, therefore, the government had to return to the task of labor reform. Further relaxation of employment regulations would not have been possible without the consent of the trade unions. With the eyes of the world focusing on his handling of the economic crisis, Kim

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Dae Jung could not afford another wave of strikes. To stave off labor protests, he chose to work with the unions—not just the mainstream Federation of Korean Trade Unions (FKTU), but even the radical Korean Confederation of Trade Unions (KCTU)—inviting them to participate in a tripartite committee of labor, management, and government that was launched on January 15, 1998. After a month of negotiations, the committee reached a historic agreement in which labor agreed to more permissive rules on layoffs and the employment of temporary workers in return for government pledges to improve labor rights, fight unemployment (through public works programs, subsidies to unemployed workers, and an extensive social safety net), and reform the system of corporate governance. The rules on layoffs were to be effective immediately, and mergers and acquisitions were included among the “urgent business conditions” justifying layoffs. Banking and Financial Reform Soon after Kim Dae Jung came to power, his administration moved to stabilize the devastated banking and financial markets, which involved action on several fronts. First, the government had to close or merge insolvent financial institutions and strengthen the capital base of “viable” ones, which required writing off nonperforming loans and recapitalizing financial institutions, either through public funds or foreign investment. Second, the regulatory system needed to be reformed to ensure transparency, accountability, and sound management in financial institutions. Third, financial markets had to be deregulated and liberalized in order to attract foreign investment and to demonstrate that the government was committed to financial reform. Finally, the government had to develop the institutional capacity to carry out these reforms. Fortunately for Kim Dae Jung, the institutional and legal foundations for financial reform had already been laid by the previous administration. In December 1997, the National Assembly passed the thirteen financial reform bills that the Kim Young Sam administration had so desperately sought during the months preceding the IMF bailout. The fragmented regulatory bodies were consolidated into a single agency (the Financial Supervisory Commission) with streamlined responsibilities, the deposit insurance system was reformed, and the legal basis was established for raising bank bailout funds and reorganizing troubled financial institutions. After several months of adjustment and preparation, the new institutional arrangement became fully operational in April 1998.

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With the necessary institutions ready, the Kim Dae Jung government moved to tackle the problem of insolvent financial institutions. In January 1998, the government effectively nationalized two commercial banks (Korea First Bank and Seoul Bank) by reducing existing shareholder equity by one-eighth and injecting almost $1.5 billion in new equity into each of them, and then proceeded to sell them to foreign investors. In April, the government announced that twelve banks had failed to meet Bank for International Settlement (BIS) capital-adequacy requirements and asked them to submit restructuring plans. Government actions against troubled nonbank financial institutions were also swift. By April, thirteen of thirty merchant banks had their licenses revoked, one merchant bank and two securities firms were suspended, and one trust company was closed. At the same time, the government, through the Korea Asset Management Company, purchased nonperforming assets from financial institutions and sought to reduce the debt burden of these institutions by buying up the bonds that they had issued. In the following months, the government committed almost $50 billion in additional public funds to recapitalization, deposit protection, and the purchase of nonperforming assets. On June 29, 1998, the government finally decided the fate of the twelve banks that did not have adequate capital provisions. Five of them (Donghwa, Dongnam, Daedong, Kyunggi, and Chungchong) were suspended and ordered to merge with stronger banks. The rest were allowed to survive on the condition that they take strong steps toward restructuring, such as changing management, reducing personnel, and coming up with new equity financing. As a result of these measures, stability returned to the financial markets. The banks began to lend again and interest rates fell. Chaebol Reform On January 13, 1998, then president-elect Kim Dae Jung reached an agreement with chaebol leaders on five principles of corporate restructuring: enhancing transparency in accounting and management, reducing mutual payment guarantees among chaebol affiliates, improving firms’ financial structure, streamlining business activities, and making managers more accountable. After revising ten relevant laws, the government was ready to implement this agreement by February. The reliability of South Korean firms’ accounting data had become an issue because murky accounting practices, allowing firms to bypass investment and transfer-pricing restrictions, had discouraged

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foreign investors from investing in them. In response, the Kim Dae Jung administration pushed for revision of the Outside Auditor Law to accelerate the adoption of consolidated financial statements and to require certain firms to establish an “outside auditor selection committee.” The National Assembly passed this law on February 14, 1998. Consolidated financial statements would provide more accurate information about chaebol finances by showing internal transactions among their subsidiaries, including their joint shareholdings and mutual payment guarantees. The law also strengthened the role of outside auditors, providing for their selection by a committee of shareholders and creditor banks rather than by controlling shareholders alone, and increased the penalty that outside auditors paid for wrongdoing. Finally, the government moved to prohibit the issuance of new mutual payment guarantees, beginning on April 1, 1998, and to require the chaebol to phase out existing guarantees by March 2000. The requisite authority to do so had earlier been granted to the government by the February 14, 1998, revision of the Fair Trade Law. To induce corporations to reduce outstanding debt, the government directed the banks to negotiate financial restructuring agreements with their debtors by April. A total of sixty-four conglomerates or debtor groups were included in this program, and the five largest chaebol were asked to reduce their debt-to-equity ratios below 200 percent by the end of 1999. Officially, these agreements between banks and the chaebol were voluntary, but there was no doubt that the government was deeply involved. To discourage future corporate borrowing, the government revised the corporate tax law on February 14, 1998, to disallow tax deductibility of interest payments on excessive borrowing, beginning in 2000. The government also relied on the banks to close insolvent firms and to force the chaebol to streamline their business activities by liquidating and consolidating subsidiaries, by exchanging subsidiaries among themselves (the so-called big deals), and by other restructuring measures. Daewoo, for example, agreed to turn over Daewoo Electronics to Samsung in return for the latter’s passengercar business, and LG Semiconductor merged with Hyundai Electronic, with Hyundai controlling the new company. On June 18, the banks announced that fifty-five insolvent firms, including twenty chaebol subsidiaries, would be closed. Other firms, judged to be troubled but not insolvent, were required to enter into a “workout” plan with their main creditor bank under which they could receive additional financial support in return for restructuring efforts. The last principle of corporate restructuring aimed at holding chaebol owner-managers accountable for their decisions. Although

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chaebol owner-managers exercise effective control over their subsidiaries, they were not formally members of the boards of directors of any of these companies and thus were not legally liable for the damage that their actions may have caused. The government changed the regulations to force the chaebol to abolish the office of group chairperson and to appoint owner-managers to the board of at least one of the member firms. To make it easier to monitor corporate decisionmaking, the government required certain firms to appoint outside directors and further strengthened small shareholders’ rights by lowering the minimum share requirement (from 1 to 0.01 percent) for filing mismanagement suits. These changes in corporate governance have allowed citizen groups representing minority shareholders and sometimes even foreign investors to uncover questionable transactions in prominent chaebol firms like SK Telecom and Samsung Electronics. Many predict that the new corporate governance system, more than any other reform, will bring about fundamental changes in the way companies are run in South Korea, as foreign shareholders, whose number has increased rapidly as a result of financial liberalization, begin to demand accountability and board representation. Kim Dae Jung has gone to great lengths to force the chaebol to reform. Some of the measures he has employed would have been unthinkable only two years ago. The National Assembly has also played an active role in crafting corporate reform bills. Members of Kim Dae Jung’s ruling coalition introduced and helped pass six bills on February 14, 1998, that established the legal foundation for subsequent reform measures.

ASSESSING KIM DAE JUNG’S PERFORMANCE The idea of structural reforms is nothing new in South Korea. The previous three governments (those of Chun Doo Hwan, Roh Tae Woo, and Kim Young Sam) had all attempted to implement such reforms. Their efforts either failed or fell short, and these failures to achieve deep structural reforms made possible the 1997 economic crisis. Yet the Kim Dae Jung administration was able to complete the process of structural reforms in less than a year. The apparent success of its reform drive shows that democracy can be compatible with economic reform. Even though the reforms faced formidable political barriers, including a divided government, Kim Dae Jung had the leadership skills to overcome them. Other problems commonly associated with policymaking in a democracy, such as indecisiveness and

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the veto power of special interests, were largely absent during Kim Dae Jung’s first year in office. Instead, democracy provided unexpected opportunities for economic reform. Because of his long-standing commitment to democracy, Kim Dae Jung enjoyed a great deal of goodwill and support from foreign investors and allies (especially the U.S. government), who wanted to see him succeed. Domestically, too, democracy gave legitimacy and credibility to the government’s reform efforts. Despite the discontent arising from increased unemployment, the general public appeared to support Kim’s reforms of the banking and corporate sectors. By mid-1999, the issue was not whether the reforms had gone too far, but whether they had gone far enough. Several factors explain this success. First, again, personal leadership matters. Unlike previous presidents, Kim Dae Jung entered office with strong economic policy credentials. He was one of the few politicians who had his own vision for the South Korean economy. Departing from the populist bent of his earlier years, Kim Dae Jung had cultivated prior to and during the 1997 presidential campaign a more conservative image as a supporter of private enterprise and market competition. Though sometimes torn between his inclinations toward social reform and his support for a market economy, he remained faithful to market principles while carrying out reforms. Second, the environment fostered by the economic crisis weakened political and social opposition to reforms. There was a widely shared social consensus that the failure of the reforms could mean the failure of the South Korean economy per se. Undermining Kim Dae Jung’s efforts was seen as jeopardizing the national interest. In this environment, people feared that if they voiced opposition to the reforms, they would be branded as egoistic spoilers. Even the trade unions could not ignore the public sentiment against militant action. The banking and financial sector was too weak to organize any political opposition to the Kim government. The chaebol could have used their power and influence to resist Kim’s reform efforts, but their political sin of having supported Kim’s leading opponent, Grand National Party (GNP) candidate Lee Hoi Chang, in the 1997 presidential election restricted their maneuvering room on this issue. More important, since the chaebol were widely blamed for the economic crisis, they were not in a position to raise their political voice. Civil society was pleased by the change in administration and well aware that the economic crisis called for decisive reform measures. Thus it gave Kim Dae Jung the benefit of the doubt in his dealings with labor and business.

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Third, Kim’s political strategies proved effective. Despite the political risks involved, the formation of a political coalition with his longtime conservative foe Kim Jong Pil had served as a valuable asset in winning the December 1997 presidential election as well as in coping with an opposition-controlled legislature. After his parliamentary agenda was initially defeated by the GNP, the president realized the importance of securing a legislative majority and launched a campaign to lure GNP members to his party. Despite public criticism, Kim’s National Congress for New Politics (NCNP) continued with its strategy of “manufacturing” a legislative majority. By September 1998, it had increased its membership from the seventy-eight seats that it had at the time of the presidential election to 101, giving the ruling coalition, which included the fifty-two members of Kim Jong Pil’s United Liberal Democrats (ULD), a majority in the 299-seat National Assembly. This strategy gave the Kim government the upper hand in managing the passage of economic reform bills in the National Assembly. Fourth, Kim Dae Jung’s consolidation of executive power also facilitated his reform drive. Aware that the failure of previous structural reforms had resulted partly from the resistance of the bureaucracy, President Kim began to consolidate power around the Blue House. He formally reorganized the government to create the Budget and Planning Bureau (BPB), which he made directly subordinate to the Blue House, and the Financial Supervisory Commission, which he placed outside MOFE. The president used these agencies rather than MOFE (whose minister was a member of the ULD) as his key agents of reform. More significant still have been changes in key personnel throughout the government. Under Kim Dae Jung, the key positions in every ministry or agency were filled by officials either from his home region or sympathetic to his reform program. The emergence of this new bureaucratic faction aroused considerable public concern and protest, but it significantly enhanced Kim’s power over the bureaucracy. President Kim went outside the political establishment to broaden his support base. As part of its effort to penetrate the semiofficial organizations at the grassroots level (such as the New Village Movement) that are still controlled by members of the old ruling bloc, the government launched a national campaign to “rebuild South Korea.” Officially, the campaign was intended to lay the foundations for a vibrant democracy and market economy by enlisting civil-society support for reform. Although the opposition GNP criticized the campaign, calling it little more than a front organization to enable the current ruling bloc to start a new nationwide political

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party, it offered the potential for mobilizing South Koreans to support structural reforms. Finally, the administration was extremely effective in exploiting “outside pressures” to push structural reform. South Korea was in desperate need of foreign capital after the IMF bailout, and one of the main objectives of Kim’s reforms has been to attract foreign direct investment. Kim Dae Jung’s open embrace of the U.S. model of democracy and a market economy, however, reflected more than the mere need to attract foreign capital. The extent to which Kim Dae Jung has favored foreign investors prompted the chaebol to complain about “reverse discrimination.” It is difficult to know how much of Kim Dae Jung’s promotion of foreign investment was politically motivated. Yet clearly, his government has been carefully building support abroad, and this foreign support helped it domestically. Even the extraordinary reform accomplishments of President Kim Dae Jung’s first year in office could not be rated a complete success, however. Well into 1999, the South Korean economy remained precarious and badly wounded by the 1997 collapse. Unemployment remained painfully high (7.9 percent at the end of 1998). More important, it was still unclear whether structural reforms had gone far enough to create a truly competitive, marketoriented economy in South Korea. Some critics argued that little had changed: the government still controlled the banks, businesses were still afraid to lay off workers, and “insolvent” chaebol firms were allowed to stay open. Moreover, the reforms have been carried out with insufficient regard to democratic procedures and safeguards. Although the tripartite arrangement was instrumental in preventing labor protests in the short run, it has created a new set of problems that may later undermine labor stability. First of all, the tripartite committee was officially only an advisory body to the president, without the legal authority to make binding decisions. Its informal status not only disappointed labor leaders, who wanted to have more formal access to the decisionmaking process, but also raised questions of constitutionality and the rule of law. It is highly questionable, from the standpoint of democratic principles, to use an informal body of unelected officials to decide important public policy issues, even if its decisions are not legally binding. Second, the committee’s agenda was too broad, given its unofficial status. The February 1999 agreement called for reforms in areas not directly related to labor issues, including corporate governance, teachers’ associations, and reorganization of the bureaucracy. Third, the Kim Dae Jung administration did not actually have the authority to offer such reforms to labor;

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only the elected legislature, the National Assembly, can enact such rules. Instead of promising to push the reforms through the assembly, Kim Dae Jung treated the committee agreements as a fait accompli before they were formally approved by the legislature. At the time, it was not even certain whether the reforms would make it through the National Assembly. The government sent mixed messages on layoffs. After having taken great pains to get the new rules enacted, it proved reluctant to implement them. Although it is now legal in South Korea to lay off workers, the Kim government urged firms to refrain from doing so. During the Hyundai automobile strike of August 1998, the government intervened to pressure the management to minimize layoffs. This practice of using informal pressure to override formal rules may have certain economic and political justifications, but it weakens the rule of law. The government’s dominant role in the financial reform process also raised concerns. The government has dictated the terms of restructuring to private financial institutions, and some of its decisions, such as bank closings, have been viewed as arbitrary and politically motivated. Unlike in the case of labor reform, here the government has not even tried to build consensus. As a result, some bank shareholders and employees protested the government’s restructuring plan, at times even violently. In fact, government control of the financial sector has actually increased under Kim Dae Jung, since it now owns majority shares in a number of financial institutions that it has bailed out with public funds. Government dominance of the South Korean financial sector not only opened the possibility of abuse of power but retarded the development of a market-oriented financial sector. Although the government promised to withdraw once reforms were completed, there is no evidence that it has begun to phase out its role. The prospects for government withdrawal are not very promising—experience shows that bureaucrats rarely give up power voluntarily. The administration has also circumvented democratic procedures in pressuring the chaebol to reform. President Kim tried to project an appearance of consensus by announcing the five principles of corporate reform jointly with chaebol leaders. Unlike the tripartite committee, negotiations with the chaebol leaders were informal and closed, leading some observers to wonder whether the chaebol leaders had any choice but to agree. Informal administrative guidance has also been a problem. The government has used its control over the banks to force the chaebol to improve their financial

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structure and streamline their business activities. As their main creditors, the banks now have enormous power over the chaebol; they can virtually bankrupt firms by cutting off their credit. Among the measures that the government has tried to implement through the banks so far, two have been the most controversial: the reduction of debt ratios and the so-called big deals. Regardless of the economic reasons that prompted them, these measures raised serious concerns about whether the rule of law and democratic principles were being violated. Admittedly, the banks have a role to play in the management of the firms to which they lend. But it is not appropriate for the banks to force their debtors to give up business lines and reduce debt ratios when the debtors are not formally in default. It is especially worrisome because the chaebol, upon receiving such demands from their main creditor bank, cannot turn to another bank. No bank is in a position to help them against the wishes of the government. For students of democracy, the more troubling aspect of Kim Dae Jung’s reform efforts was his willingness to compromise the rule of law for the sake of consolidating his power and carrying out economic reforms. The South Korean president enjoys virtually imperial power, both formal and informal, and Kim has not been reluctant to use it. He has tried to weaken the GNP by luring its members over to the ruling coalition and prosecuting opposition politicians for violations of campaign-finance laws. Although the “manufacturing” of parliamentary majorities and selective anticorruption drives are not in themselves illegal (in fact, they are familiar features of South Korean politics), they do raise some concerns about the rule of law because they are implicitly backed by threats of retaliation and the arbitrary exercise of power. Kim Dae Jung’s reform efforts have often been unilateral, topdown, and forceful, as we have seen in his attempt to force the chaebol to exchange their subsidiaries. Moreover, the role of government in the economy has risen to a level that many see as alarming. The government not only strengthened its regulatory powers over financial institutions but gained additional influence by becoming a shareholder in the financial institutions that it bailed out with public funds. Kim Dae Jung has shown a tendency to prefer informal arrangements to formal procedures in deciding major policy issues. Some see this predilection as an attempt to circumvent the elected legislature. When implementing economic reforms, the Kim Dae Jung government has often used informal administrative guidance with an implicit threat of sanctions.

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A LEARNING OPPORTUNITY? On the whole, one may conclude that, under difficult economic and political conditions, Kim Dae Jung has been able to introduce significant economic reforms and these have begun to bear fruit. But he has also compromised democratic principles along the way, especially in his dealings with the opposition and the chaebol. Some of this can be attributed to the urgent imperatives of speedy economic reform. Yet his governing style also reflects the immature nature of South Korean democracy, in which South Korea’s deeply rooted political culture undermines the rule of law and inhibits the development of democratic values such as accommodation and compromise. Despite these reservations, South Korean democracy has proven itself able to withstand difficult economic times. Moreover, the economic crisis may turn out to be a learning opportunity for new democrats in South Korea. Kim Dae Jung will continue to be pressured to correct his mistakes and to show more respect for the rule of law. In order for South Korean democracy to become consolidated, political learning has to spread to the rest of the political community. Although the political elite’s support for democracy remains strong, its behavior is still guided by traditional political values and attitudes that are largely authoritarian.

CONCLUSION The South Korean case shows that neither the demoprosperity nor the demodisaster theories get empirical support. Both authoritarian and democratic regimes have been subject to good and hard times. No regime has guaranteed a smooth, linear path to economic prosperity. Regimes and institutions matter since they set the rules of economic, political, and social interactions. Yet the nature of policy choice and underlying state structure, leadership quality and style, and social consensus are important as well. Inferring economic performance from policy choice also risks the reductionist fallacy. Between policy choice and performance lie numerous intervening variables. Thus, it is imperative to elucidate such variables in accounting for economic performance. Regardless of regime type, bad policy choices coupled with hostile internal and external environments can lead to economic disaster. The failure of the “big push” under the authoritarian Park regime and the economic disaster under the democratic Kim Young Sam government exemplify this rule. Nonetheless, it should be categorically pointed out that democratic changes did not impede economic performance.

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Nor is it clear that it was necessary to compromise democratic principles and practices to achieve extensive economic reform in 1998, when it was widely understood that urgent steps were needed. A president with a different governing style might have won adoption of these reforms in a more democratic, institutionbuilding fashion. Yet Kim Dae Jung’s style reflects the immaturity of South Korean democracy and the autocratic, uncompromising character of power relations in South Korean political culture. One important caveat is in order, however. In the South Korean context, it is difficult to render any definitive assessment of the relationship between democracy and economic performance, for South Korean democracy is still in the making. Moreover, limiting economic performance to growth and competitiveness can be problematic. Welfare, distribution of wealth, and quality of life, including environmental integrity, should be included in measuring economic performance. Despite rhetorical commitments and even in “good” economic times, South Korean governments—both authoritarian and democratic—have not delivered substantive benefits to the people in these areas. It may fall to a future democratic administration to search for a more effective and meaningful balance of the goals of growth, equity, welfare, and quality of life. But first economic growth must be restored, and the deep distortions in the labor, financial, and corporate governance structures must be overcome. South Koreans must learn how to tackle these daunting challenges of governance within not only the formal structure but also the spirit and culture of democracy.

NOTES 1. See Chalmers Johnson, MITI and the Japanese Miracle (Stanford: Stanford University Press, 1982); Stephan Haggard, Pathways from the Periphery (Ithaca: Cornell University Press, 1990); Alice Amsden, Asia’s Next Giant: South Korea and Late Industrialization (New York: Oxford University Press, 1989); Robert Wade, Governing the Market (Princeton: Princeton University Press, 1990). 2. Democratic changes involve a sequence of opening, transition, and consolidation. Here democratic changes are used in just such a broad sense. See Larry Diamond, “Introduction: In Search of Consolidation,” in Larry Diamond, Marc F. Plattner, Yun-han Chu, and Hung-mao Tien, eds., Consolidating the Third Wave Democracies: Themes and Perspectives (Baltimore: Johns Hopkins University Press, 1997), pp. xviii–xxiii. 3. For operational purposes, this chapter confines democracy to liberal democracy and economic performance largely to growth and productivity. 4. The terms “demoprosperity” and “demodisaster” are borrowed from Giovanni Sartori. See Sartori, “Exporting-Importing Democracy,” in SungChull Yang, ed., Democracy and Communism (Seoul: Korean Association of International Studies, 1995), pp. 27–40.

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5. See the special issue of The Economist, August 27, 1994, for a persuasive account of how democracy works best for capitalist growth. 6. See classic works by Hayek and Friedman. F. A. Hayek, The Road to Serfdom (Chicago: University of Chicago, 1944); Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago, 1962); Friedman, Free to Choose (Harmondsworth: Penguin, 1980). 7. Adam Smith, An Inquiry into the Nature and Origins of the Wealth of Nations (New York: Modern Library, 1937), p. 862. 8. See Douglas North, Institutions, Institutional Changes, and Economic Performance (Cambridge: Cambridge University Press, 1990); Mancur Olson, “Dictatorship, Democracy, and Development,” American Political Science Review 87 (1993): 567–576; James Buchanan, “Adam Smith as an Inspiration,” a paper presented at the Institute of East-West Studies, Yonsei University, May 31, 1996. 9. See Robert Bates, Markets and States in Tropical Africa (Berkeley: University of California Press, 1981). A similar argument has been advanced by neoliberals such as James Buchanan, Gordon Tullock, and Ann Krueger. However, they argue that regardless of authoritarian or democratic regimes, the politicization of economy is bad since politics is less efficient than the market in allocating scarce resources. For a succinct critique of this view, see Adam Przeworski, The State and the Economy Under Capitalism (Chur, Switzerland: Harwood Academic Publishers, 1990), pp. 15–22. 10. Karen L. Remmer, “Democracy and Economic Crisis: The Latin American Experiences,” World Politics 42 (April 1990); “The Political Economy of Elections in Latin America, 1980–1991,” American Political Science Review 87 (June 1993). Several other works also support the view. See Svante Ersson and Jan-Erik Lane, “Democracy and Development: A Statistical Exploration,” in Adrian Leftwich, ed., Democracy and Development (Cambridge: Polity Press, 1996), pp. 45–73; Z. A. Spindler, “Liberty and Development: A Further Empirical Perspective,” Public Choice 69 (1991): 197–210. 11. Arthur A. Goldsmith, “Democracy, Property Rights and Economic Growth,” The Journal of Development Studies 33, no. 2 (December 1995): 168– 169. 12. For an overview of this perspective, see Adrian Leftwich, “Governance, Democracy and Development,” Third World Quarterly 14 (1993): 605–624. 13. See also Gunnar Myrdal, Asian Drama, 3 vols. (New York: Pantheon, 1968); Samuel Huntington, Political Order in Changing Societies (New Haven: Yale University Press, 1968); Samuel Huntington and Jorge I. Dominguez, “Political Development,” in F. Greenstein and N. Polsby, eds., Handbook of Political Science, vol. 3 (Reading, MA: Addison-Wesley, 1975), pp. 1–114. 14. Mancur Olson, The Rise and Decline of Nations (New Haven: Yale University Press, 1982). Olson slightly changes his view in his 1993 article after having observed economic transformations in Eastern European countries. 15. Stephan Haggard, Pathways from the Periphery, 26. See also Stephan Haggard and Robert Kaufman, The Political Economy of Democratic Transition (Princeton: Princeton University Press, 1995), p. 9. 16. See Erich Weede, “The Impact of Democracy on Economic Growth: Some Evidence from Cross-National Analysis,” Kyklos 36, no. 1 (1983): 21–39. For a succinct overview of contending findings on regime type and economic

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growth, see Adam Przeworski and Fernando Limongi, “Political Regimes and Economic Growth,” Journal of Economic Perspectives 7, no. 3 (Summer 1993), p. 61. 17. Peter A. Gourevitch, “Democracy and Economic Policy: Elective Affinities and Circumstantial Conjunctures,” World Development 21, no. 8 (1993): 1271–1280. 18. See Chung-in Moon, “Beyond Statism: The Political Economy of Growth in South Korea,” International Studies Notes 15, no. 1 (1990); Chungin Moon and Rashemi Prasad, “Beyond the Developmental State: Institutions, Networks, and Politics,” Governance: International Journal of Policy and Administration 7, no. 2 (1994). 19. The term “economic performance” has been subject to diverse interpretations involving growth and competitiveness, income and wealth distribution, and quality of life. In this chapter we delimit economic performance largely to growth and competitiveness, but distributional dimensions will also be addressed. See Donal Donovan, “Measuring Macroeconomic Performance,” Finance and Development 20, no. 2 (June 1983); Svante Ersson and Jan-Erik Lane, “Democracy and Development: A Statistical Exploration,” in Adrian Leftwich, ed., Democracy and Development (Cambridge: Polity Press, 1996), pp. 45–73; and Doh Chull Shin, “Political Democracy and the Quality of Citizens’ Lives: A Cross-national Study,” Journal of Developing Societies 5 (January–April 1989). 20. See Stephan Haggard and Chung-in Moon, “Institution and Economic Growth: Theory and the South Korean Case,” World Politics (January 1990). 21. See T. J. Cheng and Larry Krause, “Democracy and Development: With Special Attention to Korea,” Journal of Northeast Asian Studies 10 (1991): 3–25. 22. Jung-kil Chung blames the erratic economic policy on Roh’s frequent economic cabinet reshuffles and failure to monitor economic bureaucrats. See his Economic Leadership for Presidents—Economic Management of the Park Chung Hee, Chun Doo Hwan, and Roh Tae Woo Governments (Seoul: Hahkuk Kyungje Shinmunsa, 1994), in Korean. 23. See Chung-in Moon and Yong-cheol Kim, “A Circle of Paradox: Development and Democracy in South Korea,” in Adrian Leftwich, ed., Democracy and Development (Cambridge: Polity Press, 1996), pp. 155–156. 24. National Statistics Office, Major Statistics of Social and Economic Indicators (Seoul: National Statistics Office, 1996), p. 190. 25. On the mismatch of macro- and microeconomic indicators, see Weekly Maekyung, December 24, 1997, 30–33; Weekly Han’gyorae 21, December 18, 1997, 74–76; Monthly Chosun (January 1998), all in Korean. 26. Financial Times, December 29, 1997. 27. The number of corporate bankruptcies rose from 9,502 cases in 1993 to 12,000 cases as of October 1997. See Weekly Chosun, January 1, 1998, 98. 28. International Monetary Fund, “Korea—Memorandum on Economic Progress,” Seoul, December 3, 1997, p. 1. 29. Kwang Choi and Jin Kwon Hyun, “Trends of Distributional Inequality and Redistributional Effects of Taxation,” in Jin Kwon Hyun, ed., Tax Policy and Income Redistribution (Seoul: Korea Tax Research Institute, 1996), pp. 26–33. 30. The Joongang Ilbo, November 5, 1996.

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31. Chosun Ilbo, May 30, 1996; and June 3, 1996. 32. The trade specialization index is calculated by (export – import)/ (export + import) x 100. It is also called the Lloyd-Grubel index. Figures are from the Ministry of Finance and Economy, Economic White Book 1995 (Seoul: Ministry of Finance and Economy, 1996), p. 223, in Korean. 33. See Ministry of Finance and the Economy, Economic White Book 1995, 225; Wall Street Journal, December 31, 1997. 34. For a detailed discussion of wage and capital costs, see Ministry of Finance and the Economy, Economic White Book 1995, 221–228. 35. The Joongang Ilbo, June 13, 1996. 36. Big business in South Korea has made enormous research and development investments on its own initiative since the mid-1980s. For example, Samsung Electronics alone invested $1.2 billion in research and development in 1995. Though this figure is meager compared with investments by major multinational corporations, it represents a profound departure from past practices. But small and medium-sized firms have lagged behind in this effort. See Weekly Han’gyorae 21, December 17, 1997. 37. Seung-hee Jwa and June-il Kim, “Trade Liberalization, Deregulation and Financial Reform,” in Chung-in Moon and Jongryn Mo, eds., Democratization and Globalization in Korea: Assessments and Prospects (Seoul: Yonsei University Press, 1999). 38. Chung-in Moon, “Managing International Competition: Democratization, Institutions, and Economic Performance,” in Christopher Sigur, Continuity and Change in Contemporary Korea (New York: Carnegie Council, 1994), p. 61. 39. Weekly Chosun, January 1, 1998, 98–99. 40. See Korea Money (December 1997), 26; Donga Ilbo, May 12, 1997. 41. See Chosun Ilbo, March 6, 1997. 42. See The Weekly Economist, December 16, 1997, 14–16; Weekly Han’gyorae 21, December 18, 1997, 74–76. Allen and Booze, a Washington-based consulting firm, suggested the idea of dissolving MOFE. 43. Weekly Sisa Journal, October 23, 1997, 92–93. 44. National Statistics Office, Major Statistics of the Korean Economy (Seoul: National Statistics Office, 1996), p. 140; Ministry of Finance and the Economy, Economic White Book 1997, 144. 45. Weekly Han’gyorae 21, November 27, 1997, 12–14. 46.The following two sections draw substantially from Jongryn Mo and Chung-in Moon, “Korea After the Crash,” Journal of Democracy 10, no. 3 (July 1999): 150–164. We thank Jongryn Mo and the Journal of Democracy.

7 Electoral Politics and Economic Crisis, 1997–1998 Byung-Kook Kim

A TRIUMPH OF DEMOCRACY? Transfer of Power and Reform The year 1997 crushed South Korea’s pride. The economy collapsed under the accumulated contradictions of overextended chaebol, insolvent banks, and inflexible labor markets, and South Korea began an unfamiliar era of economic depression and social dislocation. The signs of a financial meltdown were visible by November. Shaken by a severe liquidity crisis exploding in Southeast Asia since July and haunted by the specter of massive business failures within South Korea since Hanbo went under in January, investors fled South Korea en masse, sending a shock throughout its highly exposed financial market. The exchange rate fell by 44 percent during November and December. The stock price index dropped 33 percent. As banks drew in loans in a panic, a total of 3,197 firms failed to honor more than 151 trillion won (more than $100 billion) worth of notes in December alone.1 Forced by this economic crisis, Deputy Prime Minister Im Chang Yol asked for an IMF bailout on November 21. The disheartened press called it a “day of national humiliation.”2 Some, in a more recalcitrant mood, warned against the establishment of “IMF trusteeship” but could not offer any alternative.3 Despite the dramatic economic deterioration, however, South Korea’s electoral democracy remained strong. There was no threat of a military coup. The presidential election was held on schedule on December 18 and produced South Korea’s first transfer of power to the opposition since independence in August 1948. The triumph 173

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of Kim Dae Jung was historic. Born in the politically marginalized South Cholla Province and persecuted over a quarter century for populist social and economic ideas, Kim Dae Jung personified the deep sense of anguish (han) that had developed among the masses during South Korea’s turbulent course of modernization. His election became a moment of catharsis for the hitherto politically excluded sectors of South Korea. The hegemony of Kyongsang Provinces, established with Park Chung Hee’s seizure of power in May 1961, finally ended, and a new era of change was ushered in. Yet this shift of power did not destabilize South Korea politically. On the contrary, Kim Dae Jung became South Korea’s de facto president on December 19 and had his own “Hundred Days of Reform” before being sworn into office on February 25, 1998. A transition committee prepared for his effective control of the state bureaucracy by January and issued a list of a “hundred agendas” on February 12. A commission on state organization dismantled South Korea’s powerful Finance and Economy Board (FEB) for its financial mismanagement in 1997 and on February 16, 1998, reestablished a system of checks and balances within the economic bureaucracy by placing monetary, financial, and budget powers in three different institutions, one of which was the newly created Financial Supervisory Commission (FSP). Similarly, a tripartite commission on labor politics prepared a new law recognizing employers’ right to lay off workers in times of economic difficulty, which was enacted on February 14 (see Chapter 5). And an economic emergency council oversaw South Korea’s negotiation for debt rescheduling, and its renewal of $24 billion in private foreign loans at 2.5 percentage points higher than the London Inter-bank Offered Rate on January 9, with government guarantee, ending the worst moment of financial crisis. The potentially uncertain days of power transition had become a period of structural reforms. South Korean democracy looked stronger after December 1997 than before. It survived the shock of financial crisis, achieved a peaceful shift of power to South Korea’s once most repressed political force, and cleared the way for the implementation of a rapidly assembled program of emergency measures and structural reforms to reestablish market confidence. This triple success was possible only because the electoral process had become for South Korea the final arbiter of struggles over political power and state resources. Kim Dae Jung won by only 1.5 percent over Lee Hoi Chang of the Hannara, or Grand National Party, but even this narrow margin of victory (with a mere plurality of 40 percent) did not undermine his authority to promulgate far-reaching reforms from the very beginning

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of his term. Haunted by the specter of a minority president facing a recalcitrant National Assembly controlled by Hannara, South Korea’s powerful press called for a period of “political honeymoon” and rallied behind Kim Dae Jung’s reform. The weak power base of Kim Dae Jung ironically became a source of strength. The press virtually silenced Hannara with its call for uniting behind South Korea’s newly elected president to build a more viable national financial system. The Presidential Election The year 1997, however, looks less like a triumph of democracy when one analyzes the presidential election campaign. All political parties seriously misrepresented or distorted the issues. An overwhelming majority of voters consistently identified economic recovery as South Korea’s top priority throughout 1997 (see Table 7.1). Kim Dae Jung and Lee Hoi Chang became entrapped in a quagmire of negative campaigning, focused on exposing each other ’s moral faults. Kim Dae Jung’s political party, the National Congress for New Politics (NCNP), accused Lee Hoi Chang’s son (Lee Chong Yeon) of being a draft evader in July.4 Lee Hoi Chang’s New Korea Party (NKP, the forerunner of Hannara) in turn accused Kim Dae Jung of leftist sympathy when a former adviser of his (Oh Ik Jae) showed up in Pyongyang in August and openly declared his political defection.5 Then in October Hannara secretary general Kang Sam Jae charged Kim Dae Jung with illegally raising a political fund of 108.6 billion won (roughly $80 million) since 1987 and made public information on withdrawals and deposits of 37.8 billion won in 402 bank accounts as hard evidence of his illicit financial dealings.6 The persistent negative campaigning drew anger and frustration from South Korea’s voters. Neither Oh Ik Jae’s defection in August nor the disclosure of Kim Dae Jung’s “slush fund” in October significantly altered voter preferences. The public was critical of Lee Hoi Chang as well as Kim Dae Jung and only hardened its general mistrust of politicians. The exception was a growing public outcry over Lee Chong Yeon’s exemption from military duty. The issue came close to destroying his father ’s candidacy, which had been built on a promise of moral rejuvenation of South Korea. As shown in Table 7.1, however, by August 21 even this issue became secondary; only 2.4 percent identified it as the most critical issue facing South Korea’s voters in 1997, whereas 61.5 percent thought economic recovery was the most critical issue. This refocusing of the campaign was a product of two forces. First, as shown

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Table 7.1 Most Critical Issue in the 1997 Campaign As Identified by South Korean Voters August 21

%

Economic recovery 61.5 Change of government 12.7 Generational change in leadership7.9 Unification 3.8 Regional fissures 3.6 Questionable ideologies of candidates 3.2 “Draft evasion” by Lee Hoi Chang’s son 2.4 No response 4.9

November 1

%

Economic recovery Price stability Helping small and mid-size firms Financial instability Political stability Regional fissures

53.2 9.3 2.2

Others No response

10.8 11.0

2.0 6.9 6.0

Source: Munhwa Ilbo, various issues.

in Figure 7.1, by August 21 Lee Hoi Chang had lost all he could lose from the public scrutiny into his son’s personal life. After falling 28 percentage points between July 23 and August 21, his level of popular support finally showed signs of stabilization. Certainly this was no comfort for NKP since it meant Lee Hoi Chang (at 15 percent) had become a distant third in popularity, trailing behind Governor Rhee In Jae of Kyong’gi Province (a “wild card” also of NKP) by a margin of 9 percent and barely keeping ahead of Seoul mayor Cho Soon, who garnered 14 percent in a survey conducted on August 21. The second factor was the uneasiness caused by a series of business failures. Of South Korea’s largest thirty business conglomerates (chaebol), seven went bankrupt in 1997 alone, while Ssangyong and Hanhwa (South Korea’s sixth- and ninth-largest chaebol) began a painful program of downsizing that resulted in a long series of company mergers and sales. The financial trouble shook business confidence and precipitated a thorough reshuffling of strategic industries. The signs of a crisis were visible well before South Korea’s banks and investment houses experienced a “meltdown” in midNovember 1997. The failure of Hanbo in January and Kia in July particularly alarmed South Koreans and caused a sense of crisis within policymaking circles. However, the widespread perception of economic crisis failed to alter electoral processes. The “party platforms” resembled more a list of wishful thoughts than a concrete program of policy action to overcome the economic crisis. For South Korea’s small- and midsize companies, Lee Hoi Chang offered annual fiscal and financial

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Figure 7.1

Public Support for Presidential Candidates

50 45 40

♦

Percent

35

♦

♦

30

♦

♦

25 20 15 10 5

X

X

0 7/23

8/12

♦

X

X

X

X

9/4

10/2 10/18 11/1 11/16 12/18 Date Kim Dae Jung Lee Hoi Chang X Kim Jong Pil Rhee In Jae Cho Soon

Source: Munhwa Ilbo, various issues.

assistance of 7 trillion won (about $6 billion). Rhee In Jae, a young self-styled reform candidate who had formed the New Party for the People (NPP), called for raising a large stabilization fund to deter the spread of business failure. Kim Dae Jung was more theoretical; his vision for South Korea was “an economy driven jointly by large and small-sized companies.” As a set of policy tools, he proposed spheres of specialization for each sector; tight constraint on the monopoly powers of chaebol; an expansion of tax deductions; and liability insurance funds for small business.7 However, Kim Dae Jung failed to elaborate his ideas in detail. Much of his economic platform synthesized concepts and theories amassed by South Korea’s academic circles since the early days of socioeconomic modernization. When he pledged financial assistance, he was as evasive as his rivals on how the funds were to be raised in the context of a full-blown liquidity crisis. The press accused all candidates of making “empty promises.” The party platforms on South Korea’s real agenda in 1997—financial instability—were no different. When interest rates on notes issued by private firms reached nearly 25 percent by December 9

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and South Korea’s stock price index fell from the monthly average of 740.5 in August to 376.9 by December 2, Rhee In Je promised an interest rate of 7.0 percent and a stock price index of 3,000. The other candidates were no more convincing. Kim Dae Jung and Lee Hoi Chang became masters of fudges, omissions, and fibs when pressured to disclose their position on financial issues.8 Kim Dae Jung would “strengthen South Korea’s central bank after reforming protectionist barriers and regulatory regimes.” Lee Hoi Chang promised “a dismantling of entry barriers and an establishment of transparent and responsible business governance structures.” The rhetoric of reform was clothed in complex economic ideas, but these vague campaign pledges—all variations on the common theme of deregulation—hardly satisfied South Korea’s economically distressed electorate. When Kim Dae Jung and Lee Hoi Chang, in more courageous moments, did take concrete positions on major issues, the result was often disastrous. The Kia debacle was a case in point. South Korea’s eighth-largest conglomerate declared bankruptcy on July 15, 1997, and became a test case for South Korea’s resolve to put its house in order. Living off 8.5 trillion won borrowed from twelve large financial institutions and controlled by a militant dissident labor union since 1987, Kia was a microcosm of South Korea’s larger economy plagued with the three structural faults of overextended chaebol, inflexible labor markets, and insolvent banks. When Kim Dae Jung and Lee Hoi Chang ventured a formula for Kia, however, the rhetoric of reform disappeared. Whereas Deputy Prime Minister Kang Kyong Sik proposed a “market solution,” a code word for Samsung’s takeover of Kia followed by a concerted program of downsizing including massive layoffs, Lee Hoi Chang openly opposed any idea of sale in his highly publicized visit to the Sohari automobile plant on August 14. His formula was instead a “recovery through joint efforts of Kia’s workers and managers as the members of one family.” 9 Then on August 25, in a nationally televised talk, Kim Dae Jung opposed Kia’s divestiture of a subsidiary company operating in Kwangju, a central base of his political support.10 Kia management took these words as a sign of support for its policy of recovery through self-help and played a game of brinkmanship with its creditors to bring more favorable debt rescheduling. Kia chairman Kim Son Hong successfully refused to relinquish his control over the company until turmoil in South Korea’s financial sector forced Deputy Prime Minister Kang to place Kia under court supervision on October 23. The damage was already done, however. The three-month tug-of-war between Kim Son Hong and

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his creditors was interpreted by international capital as a sign of South Korea’s lack of resolve to reform and triggered a massive speculative attack on the won in September 1997. “Policy” hardly played a central role in the 1997 presidential election. The political parties evaded difficult choices on economic issues. In fact, party platforms were a mere formality, a list of wishful thoughts hurriedly assembled only days before an election for media use, then shelved away until another election approached. In ordinary times, the parties’ lack of policy commitment was not too dysfunctional for South Korea’s economy since there was always the state bureaucracy to provide policy leadership and administer a path to growth. However, 1997 was not a normal year. President Kim Young Sam had become a lame duck after his son was found guilty of illicit activities in March (see Chapter 5) and failed to restrain the centrifugal forces unleashed by the coming of the presidential election. Moreover, South Korea’s bureaucracy itself had changed since Kim Young Sam merged the Economic Planning Board and the Finance Ministry into a “superministry” (FEB) in December 1994. The merger eliminated a system of checks and balances carefully constructed within South Korea’s economic bureaucracy in 1961 and obstructed a timely change of policy in 1997. Too confident of his ability to solve South Korea’s financial woes but also fearful of precipitating a panic, Kang Kyong Sik’s FEB refused to release critical information while trying out a series of ad hoc policy measures. The monopolization of information backfired. Even as foreign exchange reserves dwindled down to crisis levels, South Korean banks, companies, and consumers—unaware of the extent of the crisis—failed to modify their economic behavior.

REGIONALISM AND MORALISM The Three Kims The real stuff of South Korean electoral politics lay outside the policy realms, in the forces of regionalism and moralism. They set the basic contours and parameters of electoral struggle. Success in policy debates was only a “jab” in the long struggle for power; by contrast, regionalism and moralism could make or break a political career in South Korea. The presidential election of 1997—particularly its extreme volatility—cannot be understood apart from the tensions and dilemmas produced by these twin forces under South Korea’s simple majoritarian system of presidential election.

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The central political figure in all this was Kim Dae Jung. Once South Korea’s electoral struggle shifted from a systemic conflict between democracy and authoritarian developmentalism toward strife over regional hegemony, as a result of the successful inauguration of electoral democracy in June 1987 (see Chapter 3), Kim Dae Jung found himself caught in an uneasy situation. Kwangju and Cholla Provinces provided him a secure vote base, giving him 92.6 percent of their vote in December 1997. Cholla’s unswerving political loyalty automatically made Kim a major contender in South Korea’s presidential elections. However, the region accounts for only about 12 percent of the total electorate, and the very unity of Cholla voters drove off others, defeating his presidential bid in 1987 and 1992 (see Table 7.2). Kim was a dark horse even in the 1997 presidential competition, unless he could forge an alliance with a rival regional boss. After three unsuccessful bids for power, history finally seemed to be on Kim Dae Jung’s side in 1997. The change in his personal fortune was, however, more the making of his rivals than his own. The presidency of Kim Young Sam had raised Kim Dae Jung’s chance for victory by unwittingly undermining the coalition of three major regional forces—North Kyongsang, South Kyongsang, and Chungchong Provinces—that had elected Kim Young Sam himself in 1992. Major political figures of North Kyongsang had been forced into “retirement” in 1993 for illicit financial activities and abuses of authority. In March 1995 Kim Jong Pil of Chungchong rebelled against Kim Young Sam’s policy of “generation change,” a code phrase for neutralizing the power ambitions of both Kim Dae Jung and Kim Jong Pil, and set up his own United Liberal Democrats (ULD). By 1997 the ruling New Korea Party had become a personal vehicle for Kim Young Sam despite the survival of North Kyongsang forces as its bijuryu (minority faction). Named the Minjong’gye after its historical origin as Chun Doo Hwan’s Democratic Justice Party, this faction failed to produce a presidential contender of its own in 1997, which frustrated North Kyongsang Province’s hope for regaining the hegemony it had lost in 1992 (with the election of Kim Young Sam, from South Kyongsang Province). The Minjong’gye’s power ambition was undermined by its lack of political legitimacy. Morally tarnished by its unswerving support for Chun Doo Hwan’s repressive rule before 1987, Minjong’gye could hardly have one of its members join South Korea’s presidential race in 1997. Yet its bosses opposed any idea of strengthening the faction’s position by recruiting fresh “rising stars” from North Kyongsang, for this could

4.8 14.1 8.2

49.8

Kwangju City N. Cholla S. Cholla

Chaeju 18.6

94.4 83.5 90.3

2.4 9.1 4.5

2.6

11.0 12.4

8.8

32.6 21.3 22.3

27.1

KDJ

4.5

0.2 0.8 0.3

2.6 2.6 2.7

2.1

13.5 45.0

5.4

8.2 9.2 8.5

8.1

KJP

40.0

2.1 5.7 4.2

64.7 73.3 72.3

59.6

35.2 38.3 36.9

41.5

36.4 37.3 36.3

42.0

KYS

32.9

16.1

1.2 3.2 2.1

15.7 6.3 11.5

9.6 12.5 9.2 95.8 89.1 92.2

19.4

23.3 23.9 25.2

34.1

18.0 21.4 23.1

16.3

CJY

7.8

28.7 26.0 28.5

15.5

37.7 31.7 32.0

33.8

KDJ

December 1992

8.8

0.4 0.8 0.6

8.2 6.6 5.5

11.7

11.2 9.4 6.7

6.9

6.4 7.9 6.9

6.4

PCJ

40.6

97.3 92.3 94.6

12.5 15.4 13.7 15.3 11.0

45.0 37.4 48.3

23.8

44.9 38.5 39.3

39.7

KDJ

36.6

1.7 4.5 3.2

72.7 51.4 61.9 53.3 55.1

29.2 30.8 23.5

43.2

40.9 36.4 35.5

38.2

LHC

20.5

0.7 2.1 1.4

13.1 26.7 21.8 29.8 31.3

24.1 29.4 26.1

30.9

12.8 23.0 23.6

18.9

RIJ

December 1997

1.4

0.2 0.4 0.2

1.2 6.1 1.5 1.2 1.7

1.2 1.3 1.0

1.0

1.1 1.6 1.0

1.2

KYG

Source: Central Election Management Committee. Notes: a. Taejon votes were included in South Chungchong Province’s in 1987, before it became a “special city” with an independent local government of its own. b. The votes of Ulsan City residents were counted separately only in 1997. Before it become a “special city,” its votes were counted as a part of North Kyongsang Province’s votes. Abbreviations: 1987 Election. RTW: Rho Tae Woo, Democratic Justice Party; KYS: Kim Young Sam, Unification Democratic Party; KDJ: Kim Dae Jung, Peace Democratic Party; KJP: Kim Jong Pil, New Democratic Republican Party. 1992 Election. KYS: Kim Young Sam, Democratic Liberal Party; KDJ: Kim Dae Jung, Peace Democratic Party; CJY: Chung Joo Young, National Party ; PCJ: Park Chan Jong, New Party. 1997 Election. KDJ: Kim Dae Jung, National Congress for New Politics; LHC: Lee Hoi Chang, Hannara Party (Grand National Party); RIJ: Rhee In Jae (New Party for the People); KYG: Kwon Young Gil, The People’s Construction Triumph 21 (labor candidate).

26.8

0.5 1.5 1.2

28.2 56.0 51.3

28.2 16.1

26.1

66.4 32.1 41.2

46.9 26.2

Taejon Citya N. Chungchong S. Chungchong

24.3

59.3

Kangwon

29.1 30.0 27.5

70.7

30.0 39.4 41.4

Seoul City Inchon City Kyong’gi

28.0

KYS

Taegu City Ulsan Cityb N. Kyongsang Pusan City S. Kyongsang

36.6

RTW

December 1987

Valid Votes by City and Province, 1987–1997

Total

Table 7.2

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have threatened what was left of their once formidable political influence, namely, their reputation as bosses of North Kyongsang.11 The electoral game of 1997 accordingly proceeded differently from South Korea’s previous presidential races in two critical ways. The largest and historically most powerful province, North Kyongsang, was deprived of a candidate of its own and remained alienated from the NKP led by Kim Young Sam of South Kyongsang, while Kim Jong Pil of Chungchong broke away from Kim Young Sam and formed his own political party. These feuds offered Kim Dae Jung a chance of victory. Given his virtual monopoly on Cholla votes, Kim Dae Jung could win if he could forge an alliance with a disgruntled Kim Jong Pil and secure a major share of Chungchong votes while the two Kyongsang Provinces split their votes.12 These calculations resulted in a series of bold political maneuvers. After two years of an intense courtship, Kim Dae Jung succeeded in forming an electoral alliance with Kim Jong Pil on November 3 through a program of power sharing.13 In return for Kim Jong Pil’s withdrawal of his candidacy, Kim Dae Jung pledged a government of “cohabitation” in which the ULD would choose the prime minister and share cabinet posts equally with the NCNP. To allay Kim Jong Pil’s fear of being dumped by his allies again after the election, as he had been by Kim Young Sam in 1995, Kim Dae Jung also promised to strengthen prime ministerial prerogatives over selection and dismissal of ministers as an interim measure and then to establish by December 1999 a “pure” parliamentary system of government, in which the president would become a ceremonial figure, chosen indirectly by an assembly vote. In his more generous mood Kim Dae Jung even agreed to have the ULD choose the first president and prime minister under the new parliamentary system.14 Then on November 13 Kim Jong Pil resigned his ULD leadership post, and a week later Park Tae Joon of North Kyongsang Province made a comeback from his five years of “exile” in Japan by assuming Kim Jong Pil’s post as ULD president. The press called this a “DJT coalition” after the first initials of the three septuagenarian leaders. The DJT coalition was a political gamble for Kim Dae Jung. He had found a formula for coalition formation, a task exceedingly difficult in South Korea since its 1987 constitution established neither an office of vice president nor a fixed tenure for prime minister. However, because Kim Dae Jung’s formula was based on a promise of dismantling South Korea’s presidential system of political rule, it also drew harsh criticisms from some circles of society who charged Kim with subverting the 1987 constitution. This drove off

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many potential supporters and hardened the resolve of his foes. The sight of Kim Dae Jung flanked in mass rallies by his “oppressors” from the era of developmental authoritarianism was seen by his foes as a lack of moral integrity and principle. Critics also made age a campaign issue. The three septuagenarian coalition leaders were denounced as “ghosts” of South Korea’s distant past, unfit to lead it in a new world of globalization. Nevertheless, the coalition delivered one key goal. With Kim Jong Pil’s backing, Kim Dae Jung won 43 percent of the vote in Taejon and Chungchong Provinces on December 18, compared to the 28 percent of the vote he had carried in these areas in 1992, when Kim Jong Pil endorsed Kim Young Sam. The Failed Moral Crusade The coalition did not clinch the election for Kim Dae Jung, however. As had been feared by NCNP strategists, Kim Dae Jung’s standing among Kyongsang voters hardly improved in November. Instead, surveys showed a steady decrease in his popularity in this area (Table 7.3). In the first half of November, Kim’s support fell in Taegu and North Kyongsang Province from 20 percent to 8 percent and in Pusan and South Kyongsang Province from 17 percent to 14 percent. These cities and provinces made up 28.3 percent of South Korea’s electorate in 1997, a figure that caused much anxiety for Kim Dae Jung. The combined electorate of Kwangju/Cholla and Taejon/Chungchong fell short of the Kyongsang region by 6.6 percent, or 2.1 million voters. Defeat was likely unless his rival region became internally divided and split its vote more or less evenly. As in Kim Dae Jung’s successful courtship of Kim Jong Pil, it was the political failures of others that paved the way for his own “success” in splitting North and South Kyongsang Provinces. The leading figure in this drama was Lee Hoi Chang. The candidacy of Lee Hoi Chang originally began as a reaction against two faults of South Korean party politics, regionalism and “money politics.” Lee had been a voice of conscience in South Korea’s Supreme Court before 1987, dissenting from key court rulings on civil rights cases; an uncompromising leader of a moral crusade against corruption in South Korea’s military and state bureaucracy in 1993 while heading an increasingly activist Audit and Inspection Board; and also a champion of bopchi (rule of law) when he resigned as prime minister in 1994 to protest the “unconstitutional usurpation of power” by President Kim Young Sam. These personal images won Lee wide admiration for his moral rectitude and a large pool of political followers within civil society. Given this

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Table 7.3 The Volatility of Regional Support for Candidates (percentage change in popular support, November 1–23, 1997) Major Cities and Regions

Kim Dae Jung

Nationwide Average Central Region Seoul Inchon and Kyong’gi Taejon and Chungchong Eastern Region Kangwon Taegu and North Kyongsang Pusan and South Kyongsang Western Region Kwangju and Cholla Southern Region Chaeju Island

Lee Hoi Chang

Rhee In Jae

–0.1

14.9

–4.8

–4.7 0.3 2.9

13.4 7.6 5.5

–15.0 –12.1 –2.8

7.5 –11.2 –2.5

21.2 27.1 9.1

–13.6 –25.7 –8.1

–2.5

2.1

–3.8

–14.0

17.9

14.9

Source: Munhwa Ilbo, various issues.

image, it was natural that his presidential candidacy became a function of two closely interrelated political factors: the worsening legitimacy crisis of Kim Young Sam and the concurrent rise of Kim Dae Jung’s prospect for a political comeback. Lee Hoi Chang in a sense became a “relief pitcher” for the NKP in its game of “generation change,” repeatedly being called upon to endow the tattered party with new moral stature among South Korea’s voters. The triangular dynamic first appeared in January 1996 when Kim Young Sam’s campaign of historical rectification (yoksa baro seugi) seriously backfired. The jailing of Chun Doo Hwan and Roh Tae Woo in November 1995 and December 1995, respectively, on charges of military mutiny, subversion, and corruption was seen as an act of moral hypocrisy and betrayal by Kim Young Sam in certain quarters of society, since it was his merger with the Democratic Justice Party that had won him the presidency in 1992. To regain its moral clout as a force of reform, the NKP brought in Lee Hoi Chang as one of its “advisers” in January 1996 and made him chairman of its Election Committee in February. The strategy apparently worked, resulting in NKP’s unexpected victory in the National Assembly election held on April 11. The party won 139 seats, whereas the NCNP secured seventy-nine and the ULD fifty. A decisive opportunity for Lee Hoi Chang, however, came a year later. Discredited by an assembly hearing on his son’s illicit political

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activities, Kim Young Sam again turned to Lee Hoi Chang for help. The former judge became chairman of the NKP in March 1997 and quickly established himself as the front-runner in its presidential primary.15 The choice was a reluctant one for President Kim Young Sam; after all, it was Lee Hoi Chang who had seriously damaged Kim’s popularity by throwing away prime ministerial power in 1994 as a protest against “new civilian authoritarianism.” But with his personal enmity for Kim Dae Jung still fervent, Kim Young Sam could do nothing but choose Lee Hoi Chang, by then the best hope for beating Kim Dae Jung in December 1997. President Kim’s preferred choices could hardly match Lee Hoi Chang in popularity. Former Prime Minister Lee Hong Ku was discredited by the political fiasco over labor reform in December 1996, and Rhee In Jae was judged to be too much of a protégé of Kim Young Sam to qualify as the NKP’s presidential candidate. The candidacy of Lee Soo Sung was equally discouraging, but for a different reason. After rising for a month and a half at a steady rate, his public rating suffered an irrecoverable blow in May when he performed dismally in nationally televised “debates.” He received 10 percent of popular support in a survey conducted on June 28, which was only four-tenths of what Lee Hoi Chang garnered.16 The candidacy of Lee Hoi Chang thus won overwhelming approval from NKP delegates at the party’s July 21 convention. The first round of voting gave 41 percent to Lee Hoi Chang with Rhee In Jae dragging behind with 15 percent. Despite the latter ’s alliance with three other defeated contenders, Lee Hoi Chang increased his level of support by 19 percent in the second round. The public—impressed by South Korea’s first presidential primary put out by the NKP—also rallied behind Lee Hoi Chang. On July 21 and 22, four major newspapers showed Lee Hoi Chang leading in public opinion polls by margins of 12 percent to 14 percent over Kim Dae Jung in a three-party race, and Joongang Ilbo put Lee ahead by 22 points. A hypothetical two-party race (with Kim Jong Pil withdrawing in favor of Kim Dae Jung) produced little change. Four newspapers forecast Lee Hoi Chang’s victory by a margin of 13 percent to 17 percent. Only one reported the race as close.17 The NKP had apparently succeeded in making 1997 a political contest between regionalism (Kim Dae Jung) and moralism (Lee Hoi Chang) and, in doing so, unwittingly denied its own past. Lee Hoi Chang’s candidacy was a negation of Kim Young Sam’s historical legacies as much as it was a challenge to Kim Dae Jung and Kim Jong Pil. Despite their mutual enmities, the three Kims were politicians of a similar kind, products of the same era, relying on money

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politics and regionalist prejudices to mobilize votes and build highly personal political factions. The impressive public support for Lee Hoi Chang on July 21, surpassing 49 percent in three national surveys, expressed a rejection of South Korea’s old way of doing politics by a large segment of society. The political contest, however, changed fundamentally when the NCNP and ULD jointly accused Lee Hoi Chang’s son of having evaded the military draft in 1991. The accusation practically destroyed Lee’s claim of moral superiority over Kim Dae Jung and brought down his popularity; by one account his rating fell 18 percent in the eight days after July 23 and spiraled down to 14 percent by September 4, 1997. However, Lee’s loss was not Kim Dae Jung’s gain. The latter’s support also fell from 32 percent on July 31 to 26 percent on August 12. The personal political fortune of Kim Jong Pil was even more bleak. A military coup leader in 1961, as well as a prime minister for Park Chung Hee during South Korea’s brutal authoritarian Yushin era, Kim Jong Pil could hardly vie for presidential power in a democratic South Korea. His public support fell to 3 percent by August 21 and fluctuated thereafter between 3 percent and 6 percent until he pulled out from the race to launch an alliance with Kim Dae Jung on November 3. The immediate beneficiaries of Lee Hoi Chang’s personal ordeal were instead Governor Rhee In Jae of Kyong’gi and Mayor Cho Soon of Seoul. Even before publicly declaring their presidential ambitions, Rhee In Jae and Cho Soon respectively garnered 17 percent and 16 percent of voter support in a national survey. The entry of Rhee In Jae was particularly beneficial for Kim Dae Jung, since it would certainly bring a rift between North and South Kyongsang voters in December.18

A GAME OF PARTY MERGERS The Politics of Betrayal The second “condition” for Kim Dae Jung’s victory was finally materializing. The Democratic Party (DP) chose Cho Soon as its candidate on September 12. Rhee In Jae followed, formally declaring his entry a day later and establishing the New Party for the People (NPP) with a few loyal followers of Kim Young Sam on November 4. Their entries precipitated a complex game of party mergers, which produced a different set of challenges and opportunities for each leader. For Kim Dae Jung it was a mostly negative political game, preventing Lee Hoi Chang from allying with Rhee In Jae. Kim Dae

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Jung’s victory depended on Rhee In Jae and Lee Hoi Chang each remaining a strong enough contender to obstruct pressures for a political merger that would unite the Kyongsang vote behind one or the other of them. For Lee Hoi Chang, leading a party formed through a merger of Kyongsang and Chungchong forces in 1991, in contrast, the game was a more positive one of coalition formation. His political bases closely overlapped those of Rhee In Jae, who hailed from Chungchong Province and was backed by a segment of Kim Young Sam’s Minjugye, a faction within the NKP that originated from his Unification Democratic Party (1987–1990). Meanwhile, Cho Soon came from Kangwon Province, another central region of South Korea. Because all three were candidates from South Korea’s smaller central provinces, party merger became an essential part of Lee Hoi Chang’s campaign strategy.19 The calculations of Cho Soon and Rhee In Jae were very different. Rhee In Jae hoped to force Lee Hoi Chang’s early withdrawal, a possibility raised by the continued hemorrhage in Lee Hoi Chang’s support from 18 percent on October 12 to 11 percent on October 25. More important, Rhee In Jae’s youth (late forties) argued against his own withdrawal. Even if only one-fifth of South Korea’s electorate sided with him on December 18, this would make him a major presidential contender five years later, and public opinion polls between August and late November consistently showed him with more than 20 percent of public support. Cho Soon’s election strategy was more passive. The former mayor of Seoul gave up any pretense of being a major contender and searched for a senior coalition partner as his support steadily fell (to an average of 6 percent in October) after he announced his candidacy on September 12. Trailing far behind Rhee In Jae in support and troubled by the unpredictability of Cho Soon’s political moves, Lee Hoi Chang launched a series of counterattacks on two very familiar fronts. The first was a highly negative moralistic campaign drawn against Kim Dae Jung’s alleged leftist ideological sympathies and illicit fundraising. The second was a regionalist campaign modeled after Kim Young Sam’s successful bid for presidential power five years earlier, an electoral strategy of isolating Kwangju and Cholla Provinces by playing on the other regions’ common prejudice and fear of Kim Dae Jung. To build up his image in North Kyongsang Province, Lee Hoi Chang recommended an immediate pardon of Chun Doo Hwan and Roh Tae Woo on September 1 and brought in members of Kim Yun Hwan’s North Kyongsang–based Minjong’gye into key party posts two days later.20 To lure other candidates into an alliance against Kim Dae Jung, on September 22 he even publicly proposed

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a “French-style” system with a strong prime minister as a possible alternative for South Korea by 1999.21 As a part of his politics of “reintegration” and “reconciliation,” Lee Hoi Chang also chose Taegu as the site for his installation as NKP president on September 30. The public outcry over his son’s alleged evasion of the military draft in 1991 had apparently transformed Lee Hoi Chang; by September he was practicing what he had preached against only two months earlier, namely, a negative campaign based on ideological prejudice, moralistic denunciations, and narrow regionalism. These counterattacks failed. In fact, Lee Hoi Chang’s support declined after almost every one of these initiatives. After making a slow but steady recovery to 18 percent by September 21, 1997, his support resumed a downward spiral to 11 percent by October 25.22 In particular, the disclosure of detailed information on Kim Dae Jung’s deposits, withdrawals, and transfers of money backfired. Only 46 percent believed Lee Hoi Chang’s information, whereas 67 percent criticized his disclosure as “inappropriately timed.” Moreover, only 18 percent saw his act as a constructive and legitimate effort to test the moral integrity of public figures, and 69 percent charged Lee Hoi Chang with pursuing a negative campaign only to “scar Kim Dae Jung.”23 Furthermore, since the NKP could have secured such detailed information on personal financial records only with help from South Korea’s internal revenue service and financial supervisory institution, many voters were persuaded by Kim Dae Jung’s claim that he was a victim of a political conspiracy relentlessly waged against him since his first bid for presidential power in 1971.24 When Lee Hoi Chang formally charged Kim Dae Jung with “accepting bribery” before the Public Procurator ’s Office on October 16, Lee’s support plunged 7 points more, whereas Kim Dae Jung gained 2 points. The voters were apparently turned off by Lee Hoi Chang’s recklessness. By November 4, when Kim Dae Jung launched his “DJT” coalition, and the following day, when Rhee In Jae formed his own NPP, defeat looked certain for Lee Hoi Chang. However, the month of November produced another dramatic reversal of political fortune; Lee Hoi Chang’s support rose by 15 points, surpassing Rhee In Jae’s (who lost 5 points), and moving to within 5 percent of Kim Dae Jung’s. This sudden change in public mood was brought by a brief convergence of Kim Dae Jung’s and Lee Hoi Chang’s campaign strategies. Alarmed by the steady increase in Rhee In Jae’s popular support, Kim Dae Jung joined Lee Hoi Chang in delegitimating the NPP as a political force secretly financed by followers of Kim Young Sam. The presence of major Minjugye leaders closely associated with Kim Young Sam in the NPP

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lent credibility to the accusation and dramatically reversed Rhee In Jae’s public standing. The name “Minjugye” had become a symbol of moral bankruptcy and administrative incompetence, the twin causes of a financial meltdown descending upon South Korea, and any identification with it was the political kiss of death. By depicting Rhee In Jae as Kim Young Sam’s “real” choice, Lee Hoi Chang finally realized three long-sought political goals: he successfully alienated a large number of voters from Rhee In Jae, placed himself clearly against a now discredited Kim Young Sam, and gained a reservoir of goodwill from North Kyongsang Province.25 The attack was swift. Publicly depicting himself as a victim of a political conspiracy,26 Lee Hoi Chang promised on November 6 a critical investigation of economic mismanagement if elected and engineered Kim Young Sam’s withdrawal from the New Korea Party that Kim himself had created. The Victory of Regionalism The visible change of public mood in November 1997 was also a product of Lee Hoi Chang’s success in coalition formation. As Kim Dae Jung made public his alliance with Kim Jong Pil on November 3, Lee Hoi Chang launched a search for political allies of his own, and on November 21 he ended up merging the NKP with Cho Soon’s DP. The marriage rested on a lopsided political deal. In return for his support, Cho Soon became president of the newly established Hannara Party, or Grand National Party, and his small DP, with only one-fifteenth of the NKP’s National Assembly seats, acquired a third of voting rights on the fifteen-member steering and planning committee of Hannara. Moreover, Lee Hoi Chang “guaranteed” Cho Soon’s tenure as Hannara president for over two years and “implicitly promised him a central role in choosing Hannara Party’s candidates” for South Korea’s sixteenth assembly election scheduled for early 2000. This was a deal the DP could hardly refuse; with barely 5 percent support on November 1, Cho Soon had been searching for a graceful exit by making Lee Hoi Chang and Rhee In Jae bid for his endorsement. Lee Hoi Chang reaped three benefits as well. His candidacy was given a new aura of moral legitimacy through its association with Cho Soon, a former mayor with a long record of reformist activism and a public image of integrity. The party merger also made Cho Soon’s native Kangwon Province a stronghold for Lee Hoi Chang. The sight of Cho Soon and Lee Hoi Chang embracing each other, moreover, precipitated a sense of isolation within Rhee In Jae’s

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camp and visibly curtailed his chance of beating Kim Dae Jung. This last factor proved fatal for Rhee In Jae, since for many South Korean voters the election had become strictly a negative game by November, a search for a man who could beat Kim Dae Jung. For such voters, Lee Hoi Chang’s successful courtship of Cho Soon was a sign to dump Rhee In Jae in favor of Lee Hoi Chang. The bandwagon effect was especially pronounced in the eastern coast region (see Table 7.3), where voters had traditionally harbored distrust and hostility toward Kim Dae Jung.27 Opinion surveys were disallowed after November 23 (for fear of their influencing the voters’ choices on December 18), but the trend in voter preferences apparently continued until election day. The actual vote for Lee Hoi Chang was 8 percent higher than his support level on November 23, whereas Kim Dae Jung finished with a gain of 3 percent and Rhee In Jae a loss of 3 percent. Nevertheless, the impressive comeback Lee Hoi Chang made after November 1 proved insufficient to deny victory to Kim Dae Jung, who won by 1.5 percent (391,817 votes) in what proved to be a fiercely competitive, intensely volatile, and highly uncertain contest. Kim Dae Jung owed his victory to a fortuitous combination of events: the series of business failures erupting after January 1997; the televised assembly hearing on illicit activities of Kim Young Sam’s son in March; the controversy over Lee Chong Yeon’s alleged evasion of military conscription in July; the ill-conceived negative campaign strategy of Lee Hoi Chang between July and October; the division among Kim Dae Jung’s political foes fanned by Rhee In Jae’s entry into an already crowded presidential race in September; Kim Dae Jung’s successful courtship of Kim Jong Pil in November; and, last, the visible meltdown of South Korea’s financial institutions beginning in mid-November. Given Kim Dae Jung’s slim margin of victory, the absence of any one or two of these factors could have produced a very different result, namely, Lee Hoi Chang’s election. Nevertheless, two were more fundamental than others for Kim Dae Jung’s triumph. First, Rhee In Jae frustrated Lee Hoi Chang’s political ambitions by winning more than 1 million votes in Pusan and South Kyongsang Province while splitting almost evenly (26.1 percent for Rhee In Jae to 26.9 percent for Lee Hoi Chang) the substantial stock of Chungchong voters who had become profoundly alienated from Kim Jong Pil as well as Kim Dae Jung through years of political turmoil. Second, Lee Hoi Chang’s moral crusade flopped. A large pool of voters were waiting for a moral rejuvenation of South Korean politics. They constituted a new “antithesis,” alienated from the money politics and regionalist prejudices that tra-

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ditionally dominated South Korean politics and waiting for a “reformer” who would transform South Korea’s electoral democracy into a responsive, law-based, accountable system. For such voters Lee Hoi Chang initially seemed an ideal choice. The former judge projected an image of moral rectitude; personified the principle of the rule of law; and, as a son of Chungchong, was detached from the long history of rivalries between Kyongsang and Cholla Provinces. However, this great hope many voters held for Lee Hoi Chang was transformed into a deep sense of betrayal when his son was accused of being a draft evader. This force of moralism helps to explain not only Lee Hoi Chang’s tumultuous personal political trajectory but also the extreme volatility of voter preference that made instability a virtually systemic trait of South Korean party politics after 1993. Because party bosses and regulars had become morally compromised or tarnished by a long history of regionalist struggles and money politics, political parties required a continuous “blood transfusion” from civil society. Celebrities (myongsa) were recruited as spokespeople, and younger professionals were brought in as a force of reform to give the professional politicians an aura of moral legitimacy. This was especially true for the NKP, since its only party boss capable of building a large electoral coalition across regions—Kim Young Sam of Minjugye—was serving a single nonrenewable presidential term, and its chief opponent, Kim Dae Jung, was an old-timer steeped in the political practices and images of the past. Thus, the presidential hopefuls of the NKP with a long professional career in politics all fell by the wayside during its primary, whereas political novices and amateurs rapidly rose as the front-runners and dark horses. Lee Hoi Chang had been a judge for thirty years; Lee Hong Ku had served as a university professor in political science for twenty years; Lee Soo Sung had been a law professor before becoming prime minister in 1996; even Rhee In Jae had entered party politics only in 1987 and served a mere two terms as a national assemblyman before becoming governor of Kyong’gi in 1995. Yet these newcomers suffered as much as gained from South Korea’s search for a moral catharsis. Each went through a rollercoaster ride in public support. Lee Hong Ku was a front-runner (with Lee Hoi Chang) for the NKP presidential nomination until the controversy over labor reform derailed him. Briefly in April 1997 a flamboyant Lee Soo Sung became a wild card candidate against Lee Hoi Chang. Then the rise of a new political star, Rhee In Jae, was as remarkable as Park Chan Jong’s free fall in popularity in May and June. The masses were continuously shifting their support, rallying

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behind a new face, only to desert him and start anew their search for a political reformer, as alarmed foes and jealous rivals exposed or even invented character faults in him. The dominance of political novices and amateurs, as well as the frequent change of frontrunners for the NKP’s presidential primary, all followed from South Korea’s overriding quest for moral rejuvenation. This aspiration for renewal was repeatedly frustrated by the harsh realities of South Korean politics. Yet it refused to be defeated by the failures of a particular political leader. After Lee Hoi Chang’s campaign became paralyzed by the draft evasion controversy, the force of moralism briefly found its new hope in Rhee In Jae and Cho Soon. Only after Rhee In Jae was discredited and Cho Soon’s campaign floundered in October, did electoral politics return to its old logic of regional competition, as Lee Hoi Chang simultaneously courted Minjong’gye of the NKP and Cho Soon of the DP. This game of regionalist competition was one that Kim Dae Jung had been preparing for over two years. With Kim Jong Pil resolutely standing by his side and Rhee In Jae eating into Lee Hoi Chang’s base of support in Kyongsang as well as Chungchong Provinces, Kim Dae Jung’s prospects for victory sharply increased. For the first time in history it was South Korea’s governing political party, not the fragile opposition, whose support base was fragmenting into two blocs. This regionalist electoral map had been drawn through a series of unsettling transformations of the political leaders. Kim Dae Jung forged a pact with his former “oppressors,” Kim Jong Pil and Park Tae Joon. Lee Hoi Chang courted North Kyongsang by expelling his former boss Kim Young Sam from the NKP. Rhee In Jae—fearful of being perceived as a “marionette” in Minjugye’s alleged conspiracy against Lee Hoi Chang—made a frontal assault on its leader Kim Young Sam, whom Rhee In Jae had identified publicly as his political “mentor” and “father” only three months previously. Cho Soon also had his own share of political betrayal; elected mayor of Seoul with Kim Dae Jung’s support in 1995, he changed sides and endorsed Lee Hoi Chang.

THE INSTITUTIONAL VACUUM Forced Partisan Realignment The election of 1997 was a big letdown for South Korea. The parade of personal betrayals and negative campaigning became a source of cynicism and fanned a profound sense of anxiety in society. The end

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of the electoral contest did not, however, make South Korean party politics any less a malicious, volatile, and uncertain game of power politics. On the contrary, it slid ever deeper into a quagmire of political strife after Kim Dae Jung formally assumed the presidency on February 25, 1998. The majority Hannara Party drew the first shot when Kim Dae Jung nominated Kim Jong Pil of the ULD for prime minister on February 25. The Hannara leadership threatened a veto of this choice, and President Kim Dae Jung followed suit with his own declaration of war. The NCNP and ULD blocked an assembly vote of confidence on Kim Jong Pil on March 2 and pulled off a “coup” by having outgoing Prime Minister Koh Kon form a new cabinet with Kim Jong Pil as an “acting” prime minister a day later. The president, moreover, began investigating illicit activities of the Hannara Party committed during the election year, with the goal of inducing a sizable defection of assembly members to his NCNPULD coalition. The distribution of power within the National Assembly—in which Hannara held a majority (161) of the 290 seats then occupied, to seventy-eight for the NCNP, forty-three for the ULD, and eight for the NNP—had made Kim Dae Jung an easy target of political abuse, threats, and obstruction. The instrument that broke the majority position of Hannara was the Public Procurator’s Office. On March 20, 1998, the office arrested Kwon Young Hae—former director of the National Security Planning Agency (NSPA)—for conspiring in 1997 to discredit Kim Dae Jung as a “sympathizer” of North Korea. Then on May 18 former Deputy Prime Minister Kang Kyong Sik and Chief Economic Secretary Kim In Ho were arrested on charges of covering up the country’s financial difficulties during the critical month of October 1997.28 However, neither broke the Hannara Party. Even with some defections, it still remained a majority party with 148 assembly seats on June 3; the NCNP managed to add only seven more seats, and ULD fared even worse, gaining a mere four assembly seats.29 Then came the provincial elections on June 4, 1998, which showed a subtle shift in the power configuration. The elections produced what was by now a familiar regionalist division; the ULD and NCNP once again won all six governorships and mayoralties contested in Chungchong and Cholla Provinces, and the Hannara Party demonstrated its strong grip over Kyongsang and Kangwon Provinces by electing all six of its candidates for governor and mayor.30 Nevertheless, there were two changes. First, the disintegration of Rhee In Jae’s NPP as an electoral force caused a sizable shift of votes toward both ULD and Hannara in their respective home provinces of Chungchong and Kyongsang/Kangwon. Second,

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new information released on the alleged illegal activities of Kwon Young Hae’s national security agency and on Kang Kyong Sik’s economic mismanagement induced many traditional Hannara voters to refrain from voting. This second factor had a greater effect on the election outcome in Seoul, Inchon, and Kyong’gi Province—South Korea’s more urban melting pot that had frequently been a swing factor in elections and that “swung” again in 1998, this time toward Kim Dae Jung. Koh Kon of the NCNP became mayor of Seoul with 53 percent in a race where only 47 percent of registered voters turned out. Choi Ki Seon of the ULD benefited even more, winning election as mayor of Inchon with 53 percent when only 43 percent of the electorate voted. Im Chang Yeol of the NCNP likewise became governor of Kyong’gi Province with 54 percent, with only half the voters turning out. Encouraged by the ULD’s advances in Inchon and Chungchong Provinces, as well as the NCNP’s victories in Seoul and Kyong’gi Province, Kim Dae Jung launched a second round of legal investigations of the Hannara Party members’ questionable activities. The Public Procurator ’s Office inquired into financial subsidies and privileged loans received by failed business ventures of Kia, Chong’gu, and Kyongsong for abuse of power and graft by politicians and bureaucrats, which seriously demoralized Hannara. On June 9, 1998, the office announced its plan to investigate Kim Yun Hwan—a major leader of Minjong’gye—for receiving bribes from Chong’gu,31 summoned Lee Sin Haeng on June 12 on a charge of complicity in Kia’s clandestine network of lobbying, and pledged a “comprehensive reinvestigation” of Kyongsong’s political friends on August 4. 32 Then came two events that dramatically raised the political stakes. The procurator’s office subpoenaed a former head of the National Tax Administration Agency on August 31 for “extorting” campaign funds from business firms for the Hannara Party in 1997.33 And it arrested three obscure men on September 25 for having contacted North Korea to stir up a mock military incident to derail Kim Dae Jung’s presidential campaign, while bringing in a brother of Lee Hoi Chang as a “reference” in the case.34 The two investigations—launched immediately after Lee Hoi Chang’s reelection as Hannara president (Cho Soon had stepped down under intense pressure by Lee Hoi Chang)—brought a violent reaction from the Hannara Party, since each case had the potential to fatally wound Lee Hoi Chang himself. The investigations were an integral part of Kim Dae Jung’s carefully controlled program of party reshuffling, whose goal was to apply pressure strong enough to cause a sizable defection of Hannara

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assembly members, but not so strong as to precipitate a total system failure. Accordingly, most investigations were stopped before exploding into full-blown legal proceedings. After four months of investigation, the procurator’s office indicted only one assemblyman for illicit dealings with Chong’gu while acquitting eleven other political figures.35 In its inquiry into Kyongsong’s financial record, fifteen politicians and former ministers were questioned for two months, but only two were indicted.36 The remaining cases were similar. The investigation of Kia lost its momentum with the imprisonment of Lee Sin Haeng,37 and Lee Hoi Chang’s public apology for illicit fund-raising on November 438 made Kim Dae Jung less adamant in forcing the arrest of Suh Sang Mok, Lee Hoi Chang’s confidante accused of raising campaign funds through tax offices. Similarly in late October 1998, the Public Procurator ’s Office signaled its intent to end the investigation of Hannara’s contact with North Korea during the election year with the arrest of three minor figures.39 The carefully controlled investigations proved politically damaging, however. The defection of national assembly members accelerated. The NPP, with eight members, was absorbed by the NCNP on August 28,40 while a slow but steady inflow of former Hannara politicians gave Kim Dae Jung and Kim Jong Pil a joint majority in the National Assembly by September 7.41 When Kim Dae Jung more or less ended his second round of investigations in November 1998, South Korea was facing a significantly realigned power equation— 137 assembly seats for Hannara, 105 for the NCNP, and fifty-three for the ULD. The ruling coalition (NCNP and ULD) was perceived as a safe sanctuary for opposition assembly members, a place to hide and protect oneself from state prosecutors. That perception had caused a loss of twenty-four assembly seats by Hannara and a joint gain of thirty-seven seats by the NCNP-ULD coalition in the nine months since the change of power in February 1998. The Paralyzed National Assembly However, legislative politics suffered crippling damages as a result of renewed partisan bickering after February 1998. The National Assembly was reduced to a sikmul gukhwae, or a “legislature in a permanent coma,” throughout 1998.42 The six special assembly sessions called mostly by the Hannara Party between May and September became crippled by partisan strife; only one special session (summoned on August 3) secured the full participation of the NCNP and ULD.43 The rest even failed to set common agendas and schedules

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for deliberation. The paralysis was fully intended by the Hannara Party as a tactic to prevent the arrest of its members. Because the consent of a majority of the assembly members was required to arrest a legislator while the National Assembly was in session, Hannara continuously summoned special sessions with the expectation that the NCNP-ULD coalition would retaliate with the threat of boycott.44 The assembly was an arena for partisan bickering, not policy debates. The bill nominating Kim Jong Pil as prime minister was twice submitted for a vote in a special session summoned on February 26 and twice obstructed, first on February 26 by a Hannara Party boycott and then on March 2 when an army of NCNP-ULD members forcibly stopped the voting for fear of a defeat.45 The next session called on March 6 produced a similar deadlock. This time NCNP and ULD boycotted, frustrating Hannara Party’s plan of transforming it into a de facto public trial of Kim Dae Jung, who was charged with violating South Korea’s Constitution by forming a cabinet with Kim Jong Pil as an interim prime minister. For twenty days, the boycott prevented an assembly vote on supplementary budget bills of 73.8 trillion won. Finally under intense public pressure, the parties met on March 17 and characteristically moved quickly to pass the bills with minimal changes, an act of extreme irresponsibility given South Korea’s financial crisis.46 When a special assembly session was convened on April 8 for amending laws on provincial elections to prevent labor representatives from running, the political parties again became entrapped in a game of testing each other’s appetite for conflict; protesting vehemently against the ULD’s and NCNP’s “unethical” practice of jointly nominating candidates in hotly contested electoral districts, Hannara forced adjournment until April 14. Then it held the electoral reform hostage to dissuade Kim Dae Jung from engineering political realignment through the investigations into its past financial records and political activities. This linkage strategy was given up only on April 24— the last day of the special session—under intense public criticism.47 The regular session summoned as scheduled on September 11 similarly became paralyzed by partisan strife. After meeting for a few hours it was forced to adjourn for the next thirty-three days as the procurator ’s investigation of abuse of power and graft by national assembly members once again provoked a boycott by the Hannara Party. Then on October 9 Hannara reversed its position, unilaterally ending the boycott “without a condition,” upon which Kim Dae Jung held a “summit meeting” with Lee Hoi Chang as a “partner” of governance. The press welcomed these as gestures of “statesmanship.” The real motives behind restoring assembly politics were, however, different. Having engineered by then a defection

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of twenty-three Hannara assembly members, reducing it to a minority status in the assembly, Kim Dae Jung was slowly preparing himself for a different political task—passing a budget as well as reform bills prepared by state ministries and presidential advisers. The prospect for orderly and timely legislation was, however, low. Criticized severely for its repeated boycott of assembly sessions, Hannara Party had reversed itself only as a tactical move. Participation in assembly sessions was chosen over mass rallies only because it seemed a more effective way to embarrass Kim Dae Jung. The regular assembly session reconvened on October 13 became what a newspaper editorial termed a “colosseum” for destructive political battles, an arena more to publicize “moral faults” of Kim Dae Jung than to deliberate on policy.48 On November 26, 1998, with only twenty-three days left before its term expired, a total of 456 bills still awaited deliberation, and the government planned to submit another 195 bills.49 The National Assembly was guilty of dereliction of its own duty. In the middle of a full-blown financial crisis, which had caused a layoff of more than 1 million workers in the year since October 1997 (raising the unemployment rate from 2.1 percent to 7.3 percent), assembly members fell to squabbling over the NCNP-ULD’s proposal for holding a hearing on economic mismanagement during 1997.50 Deliberation on budget bills was low in their priorities. The political parties lacked both the technical expertise and the ideological commitment necessary to articulate a clear hierarchy of budgetary goals. Even when assembly members were forced to turn to the 1999 budget bill of 84.9 trillion won by the legal deadline set for budget making, their focus was on the political—not economic—aspects of the bill. The Hannara Party called for eliminating 2 billion won earmarked for a “Movement for Nation Building,” which it accused of being a vehicle to organize a new grand coalition for Kim Dae Jung.51 It also demanded a sizable cut in the National Information Board’s (the successor to the National Security Planning Agency) budget of more than 196 billion won.52 But the budget for economic reform and relief remained mostly untouched, to be passed hurriedly without Hannara Party members on December 9, a week after the regular session was legally set to end.

CONCLUSION The politics of reform depends on coalition building for success. Reform rarely succeeds without a broad political coalition to articulate goals and strategies as well as to mobilize public support. This is

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why political parties are critical players in any politics of reform. They constitute a central institution of political integration, an actor responsible for developing the basic political language or discourse by which to aggregate conflicting demands of society and, in so doing, transform political power into an instrument of ideas, values, and public policy. The politics of reform universally requires a powerful coalition, which in turn demands organizationally “broad” and ideologically “deep” modern political parties. South Korea lacks precisely this integrative institution. Essentially cadre parties with neither a distinctive ideological vision nor a densely organized network of linkages to social forces, its political parties are more a cause of than a remedy for its political woes. They are more an object of reform than its vehicle. Helplessly entrapped in a mean game of power politics devoid of ideological constraints as well as organized popular restraints, party politics has been responsible for South Korea’s moral decay and economic decline. The money politics erodes South Korea’s fragile moral fabric and weakens its once dynamic export machine, and regionalist agitation breeds prejudices, distorts issues, and obstructs the policymakers’ focus on policy. However, because they are political parties responsible for organizing elections, reform has ironically become their central agenda, which explains the extreme volatility of South Korean electoral politics. A party boss is a boss because he is a master of regionalist agitation and a skillful dealer in money politics. Yet he is expected by society to break with these old ways of politics and bring an ethical as well as economic renewal. This powerful force of moralism constitutes a new antithesis for South Korea, and it entraps party bosses in a serious dilemma and sometimes even in a hopeless no-win situation. For party bosses, rejecting the force of moralism is an act of political suicide, an outright betrayal of the hopes and desires of the masses. But to embrace it as their own agenda and the basis for a political career is dangerous, for it exposes them to charges of moral hypocrisy. The bosses negate the legitimacy of not only their political foes but also their own selves when they engage in moral discourses. They are criticized severely as men of no principle, projecting themselves as a force of reform when they are actually a cause of South Korea’s problems. Their dilemma is not just a personal dilemma but also a dilemma of their generation caught between two vastly different worlds—the old world of morally compromised and economically dysfunctional money politics, and the unsystematically imagined but electrifying new vision of a transparent as well as responsive democracy. The

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party bosses live in a transitional era, where a career is made through the old ways but judged by newly emerging norms. This is difficult in any situation. The South Korean party leaders, however, have hardly played a constructive role in alleviating tensions and contradictions arising from the transition. They have been exploitative and abusive of transitional political difficulties, exposing each other’s moral faults and hypocrisy to make personal electoral gains instead of joining forces together to rebuild South Korea’s disintegrating political institutions. The presidential election of 1997 was a mere game of negative campaigning that tarnished the moral legitimacy of all party bosses. Strife continued through 1998 as South Korea’s party bosses fought for majority status in the National Assembly. Herein lies the tragedy of South Korea. Today electoral democracy is consolidated. Even a peaceful transfer of power has been effected. Yet its party politics has failed to make significant progress. The political parties remain organizationally weak and ideologically shallow, entrapped in an opportunistic game of mergers and dependent on regionalist agitation and money politics for survival. This harsh reality of party politics deepens South Korea’s sense of anguish. However, beneath frustration and agony also lies a fervent desire for renewal, which refuses to be defeated by the failures of a particular leader. This hope for change—coupled with South Korea’s current financial difficulties that forced a more transparent business governance structure on the chaebol—is what will eventually trigger an escape from South Korea’s basic faults, regionalism and money politics. Until then, however, moralism will be a source of political uncertainty, creating few heroes and producing many more villains, who strengthen systemic instability with their fall.

NOTES 1. This was a dramatic escalation from November. Then only 1,469 business firms failed to make payment on matured bills. Finance and Economy Ministry, Economic Trends and Statistical Data, December 1997. 2. Joongang Ilbo, November 22, 1997; December 4, 1997; Donga Ilbo, December 4, 1997. 3. Donga Ilbo, November 21, 1997; December 4 and 30, 1997; Joongang Ilbo, November 27, 1997; December 5 and 29, 1997. 4. Munhwa Ilbo, July 19, 1997; July 29, 1997; and August 4, 1997. 5. Munhwa Ilbo, August 16, 18, and 19, 1997. 6. Munhwa Ilbo, October 7 and 10, 1997; Joongang Ilbo, October 21, 1997. 7. Han’gyorae sinmun, “The Economic Platforms of Presidential Candidates,” news.hani.co.kr/97elect.

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8. Joongang Ilbo, December 3, 1997. 9. Joongang Ilbo, August 15, 1997. 10. Joongang Ilbo, August 26, 1997. 11. When Lee Soo Sung, a former prime minister born in North Kyongsang, joined the NKP on March 4 and instantly became a dark horse in its coming presidential primary, Kim Yun Hwan—a leading boss of Minjong’gye—moved swiftly to heighten his support for Lee Hoi Chang, who identified Chungchong as his ancestral home. 12. Han’gyorae sinmun, September 21, 1997. 13. See Munhwa Ilbo, March 10, 1997; May 14, 1997; July 11, 1997; September 29, 1997. 14. Munhwa Ilbo, October 31, 1997. 15. Joongang Ilbo, March 12, 1997. 16. Donga Ilbo, March 25, 1997; Han’gyorae sinmun, May 11, 1997; June 28, 1997; Hankuk Ilbo, May 29, 1997; Joongang Ilbo, May 14, 1997; Monthly joongang win, March 12, 1997; Munhwa Ilbo, February 22, 1997; Sisa jonol, January 26, 1997. 17. Surveys conducted by Munhwa Ilbo, July 22, 1997; Kookmin Ilbo, July 21, 1997; Hankuk Ilbo, July 21, 1997; Joongang Ilbo, July 21, 1997; and Donga Ilbo, July 21, 1997. 18. Han’gyorae sinmun, September 7, 1997. 19. Han’gyorae sinmun, August 13, 1997; Hankuk Ilbo, August 14, 1997. 20. Joongang Ilbo, September 3, 1997. 21. Joongang Ilbo, September 22, 1997. 22. Han’gyorae sinmun, October 26, 1997. 23. Han’gyorae sinmun, October 13, 1997. 24. Munhwa Ilbo, October 16, 1997. 25. Munhwa Ilbo, October 22, 1997. 26. Rumors of Kim Young Sam’s conspiracy against Lee Hoi Chang had been circulating widely since Rhee In Jae launched his candidacy on September 13. See News Plus, October 23, 1997. 27. Chosun Ilbo, November 23, 1997. 28. Joongang Ilbo, May 18, 1998. 29. Joongang Ilbo, April 3, 16, and 29, 1998; May 3 and 6, 1998. 30. Joongang Ilbo, June 5 and 6, 1998. 31. Joongang Ilbo, June 9, 1998. 32. Joongang Ilbo, August 4, 1998. 33. Joongang Ilbo, September 1, 1998. 34. Joongang Ilbo, September 25, 1998. 35. Joongang Ilbo, October 3, 1998. 36. Joongang Ilbo, October 1, 1998. 37. Joongang Ilbo, September 4, 1998. 38. Joongang Ilbo, November 5, 1998. 39. Joongang Ilbo, October 26, 1998. 40. Joongang Ilbo, August 28, 1998. 41. Joongang Ilbo, September 7, 1998. 42. Joongang Ilbo, July 23, 1998. 43. Joongang Ilbo, August 3 and 4, 1998. 44. Joongang Ilbo, July 24, 1998; August 21, 1998; September 2, 1998. 45. Joongang Ilbo, February 26, 1998; March 3, 1998. 46. Joongang Ilbo, March 5, 7, 17, and 26, 1998.

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47. Joongang Ilbo, April 9 and 25, 1998. 48. Joongang Ilbo, November 3, 1998. 49. Joongang Ilbo, October 11, 1998; November 19 and 26, 1998. 50. Finance Economic Ministry, Economic Trends and Statistical Data, December 1997; December 1998. 51. Joongang Ilbo, November 25, 1998. 52. Joongang Ilbo, November 26, 1998.

8 Continuing Democratic Reform: The Unfinished Symphony David I. Steinberg

South Korea is a democratization anomaly. It now conforms to the institutional requirements of a democratic state as usually defined by Western political scientists and has done so since 1987, but its attitudes toward the institutions that comprise democracy are singularly circumscribed by traditional social and cultural norms and mores. The challenges to democratic reform and deepening in South Korea are concentrated in those traditional cultural factors because such elements affect attitudes toward democratic institutions and thus their functioning. That South Korea is now a pluralistic society there is no doubt; there is also little argument that this pluralism will continue and grow parallel to an expanding economy, except under the most egregious and exceptional international debacles that would invalidate most predictions.1 Pluralism has continuously expanded, and by the June 29, 1987, decree, considerable political liberalization had already informally come into play.2 The roots of this situation lie in a complex of factors, including rising incomes and the growth of the middle class, urbanization (with the resultant loss of government autocratic control over urban institutions and populations), higher standards of education, and greater access to international information.3 Over time, these continuing changes are likely to ameliorate those values and norms that undercut the democratic process. The long-range prospects are thus quite hopeful. The short term is more ambiguous. Democracy is normally measured through institutions and judged by their performance. This is true not only in much of the academic literature, but also in the popular press. If fair, multiparty 203

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elections are held, voter participation is relatively high, and there is open debate about at least some societal issues, then it is said that a state is “democratic” (e.g., Taiwan in 1996) or has “returned to democracy” (e.g., Haiti). This approach tends to be simplistic for the reasons discussed below, although it could be argued that the habitual functioning of democratic institutions, even if initiated for pretense or propaganda and although corrupted through misuse, can lead to their eventual rooting and growth.4 The institutional bases for democratic governance lie within a broad societal spectrum. They include an extensive electorate, free and fair elections, a multiparty political system, a vital legislature, an independent judiciary, an open press and media positively affecting transparency and responsibility in governance, and a civil society that is free to engage in advocacy roles. Democracy also implies the promotion and protection of individual freedoms and the prevalence, acceptance, and predictability of legal norms, called in the West the “rule of law.” Many South Korean institutions associated with democracy now function far better than they once did. The electorate is universal for its age group, the legislature is a forum for vigorous debate, and civil society is alive and well. Political parties compete and change with kaleidoscopic speed. The prospect of public outrage makes it virtually inconceivable that elections could be withheld for long. The media and press have more freedom than ever before in South Korean history, even if they are usually quite circumspect, and even the judiciary, which in the history of the republics until 1987 was completely under executive command, now—occasionally—finds against the government. Obviously, institutions are patently necessary. There are also other good, even if insufficient, reasons for concentrating attention on institutional growth and maturity alone. There is a general outcry for statistics, which an institutional approach is more capable of supplying than are abstract or qualitative methodologies. Thus, we can measure the electorate and turnout and votes, can conduct exit polls, and otherwise appraise performance. This provides credibility to analyses and, indeed, for the analysts themselves. However, one limitation of an institutional approach to democratic analysis is its generally static nature. The democratic process is dynamic and constantly evolving, and any analytical approach should therefore reflect this sense of dynamism even if it may not be able to measure it. Democracy goes beyond the establishment of representative institutions and the holding of elections. It involves the changing attitudes and expectations of the populace toward

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such institutions and—more fundamentally—their basic concept of power and the degree of tolerance that they are prepared to exhibit toward its exercise. These latter elements in turn affect how democratic institutions unfold and operate.5 South Korea has passed the point of justifying autocratic or authoritarian governance, although debates do exist on the past era of Park Chung Hee that saw both political repression and economic expansion. Today in South Korea more attention is paid to the problem of whether rights are collective or individual and what this means in a society essentially homogeneous in culture but with perceived regional differences. In a policy statement by the then Foreign Minister Han Sung-joo, the Kim Young Sam government explicitly endorsed the universalistic approach to human rights issues, perhaps in part to differentiate itself from the repression in North Korea. For many years, Kim Dae Jung has advanced the same universalistic view. There are important and systemic issues that relate to the future of democracy in South Korea and factors likely to impede such change. Yet the major accomplishments of the past decade, some of which are still emerging, must impress even the most cynical observers. I examine those positive changes before becoming immersed in issues that impede democratic consolidation.

THE PROGRESS OF DEMOCRATIC REFORMS The magnitude, extent, and limitations of the impressive democratic reforms instituted in South Korea were evident in the person and the presidency of Kim Young Sam, a former dissident once under house arrest. His rise to the presidency and the toleration of his ascendancy by the previous power elite(s) demonstrated the growing maturity of the political process in South Korea. The very fact that he was elected and could serve widened the avenues of political change to a degree that many would have questioned prior to his presidency. If Kim Young Sam’s election represented an important transitional and generally positive stage in South Korea’s political growth, the election to the presidency five years later of Kim Dae Jung—a democratic dissident who had once been sentenced to death by the military and subjected to an assassination attempt— was even more remarkable. Furtherance of democracy in its more abstract and fundamental formulations and accretion of power and prestige in ad hominem terms cannot always be separated. They may be inextricably linked

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under certain circumstances, so what may be (politically) good for the individual may be good for the country as well. So it is not only the election of a civilian dissident to the presidency that is important, but ironically it is also what he has done to secure power for himself and his party that has contributed to expanding the bases for eventual democratic governance. This marks the ascendancy of civilian rule.

THE RETREAT OF THE MILITARY Perhaps foremost and most comprehensive among the accomplishments of Kim Young Sam was the retreat of the military from the ramparts of power. President Kim was the first completely nonmilitary person to serve as president since 1961. The diminution of the role of the military was accomplished with few ripples of unrest, although not without some distrust. Presidents Park, Chun Doo Hwan, and Roh Tae Woo became “civilianized,” wearing mufti but bearing the marks, reputation, and relationships of their long military careers. President Kim was different. The military’s return to the barracks was more complex than the single act of the president, although he deserves credit for his role in the process. Although President Kim had some top military leaders tried and convicted of corruption in the taking of bribes for both promotions and contracts and thus shook up the command system, a series of forces had been set in motion that had begun to limit military authority. The period from the 1960s to the 1980s was the military era in more than simple power terms. It was a time in which social mobility through military channels was pronounced. The modicum of mobility that existed in South Korea was through the military because education was expensive and the army provided for free educational opportunities for those poor and rural.6 By the 1990s, that primacy had eroded. Business became the prime avenue for mobility, and the interest of the elite was in marriage of children into business concerns, not into military command structures, which had once been popular. Although the verbal pugnacity of the North Korean government may not have diminished and may even have increased somewhat, the end of the Cold War reduced the public’s psychological dependence on the military. However, this attitude vacillates as relations with North Korea warm or cool. Under Kim Young Sam, Hanahoe (literally, “the One Society,” or figuratively, “Our Group”), the secret military cabal that formed the core of the elite military establishment and in which Chun Doo

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Hwan and Roh Tae Woo played important roles since its inception in 1964, was dismantled.7 It had provided the unity that was so evidently lacking in other elements of South Korean society. Its members had assumed a wide array of important positions. In contrast to some other countries, such as Thailand, Burma, China, and Indonesia, the military in South Korea had no economic interests or control over major economic institutions. Although the generals in South Korea had power over and commanded the macroeconomic decisionmaking process, they held no microlevel economic monopolies or important commercial, industrial, distribution, manufacturing, service, or informational controls. The South Korean military seemed more concerned with national power, and their corruption, where it existed, was concentrated on military procurement and the promotion process, not directly in business as in many other states. The arrest and trials of former presidents Chun and Roh in late 1995 and in 1996 for the mutiny, or coup, that overturned the government on December 12, 1979, and for the subsequent declaration of nationwide martial law (in a sense another coup) on May 17, 1980 (the former a contributing cause and the latter a precipitating cause of the Kwangju massacre), were simply the denouement of a pattern that was already in process. Along with both Chun and Roh, sixteen other generals, holding before their retirement a total of fifty stars, were charged. Most had been associated with Hanahoe. On August 26, 1996, Chun was convicted of mutiny and treason as well as corruption and sentenced to death, whereas Roh was given a twentytwo-and-a-half-year sentence on the same charges. Both were heavily fined to the amount of the bribes (several hundreds of millions of dollars) they were said to have received. Seven of the last eight ministers of defense over the preceding ten years were indicted for bribery, corruption, and treason connected with the 1979 coup or were dismissed.8 These actions were accepted with grumbling but without incident. The civilianization of the South Korean polity must be accounted as a major achievement of democratization during Kim Young Sam’s presidency.

THE CHAEBOL NEXUS The state-business relationship is a more complex, continuing phenomenon, in part because it is a major force in the problem of corruption in South Korean society and in part because a new pattern is slowly evolving and is still unresolved. Yet there was modest

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progress on this score as well during the Kim Young Sam presidency, then more dramatic change under Kim Dae Jung, after the November 1997 financial crash revealed the vulnerability of South Korea’s corporate structures. In contrast to many other developing societies in Asia, the business community, which grew exponentially during the period when the military was in control, did not vie with other elites for political power. This is in sharp contrast to the Philippines and Thailand, for example, where in especially the latter, provincial businesspeople of Chinese extraction used a legislative cloak to provide status and prestige and where the military had both institutional and personal business interests. There were very few individuals in the South Korean National Assembly who could primarily be identified by a business label, although many may have had business interests. This ambiguity may have been because of both positive and negative factors related to the comprehensive state control over institutional credit since the coup of 1961, but it may also be related to the lack of social prestige associated with the business community, until relatively recently, due to the traditional Confucian canon denigrating merchants, together with the positive association of government with the literati.9 A close relationship with the government gave the chaebol unprecedented opportunities to expand and profit, and conversely, to have split with the state would have meant denial of access to subsidized loans by which expansion was achieved (since few chaebol invested with their own assets), forcing them onto the informal market where interest rates were much higher and thus making them uncompetitive in both local and international markets. Only in the late 1980s did the first member of a chaebol (Hyundai) family run for the National Assembly as an independent. Since then, the former chairman of Hyundai formed his own political party, won 11 percent of the seats in the 1992 National Assembly elections, and ran but lost in the presidential election of 1992, receiving 16 percent of the vote. As the state’s control over bank credit weakened, thereby diffusing the sources of funds available to the chaebol, and as nonbanking financial institutions proliferated, the government resorted to other formal and informal means to control the business sector. The first was the threat or actuality of tax audits of all or parts of the conglomerates, from which there was no legal appeal. The second was the informal but virtual requirement for businesses to donate to the government for whatever activities the state deemed to be appropriate. When such donations did not meet government

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expectations as to size (e.g., Kukje chaebol donations to the Ilhae Foundation, President Chun’s favorite project and planned retirement occupation), the business could be forced into bankruptcy. Whether these massive donations were used for special favors and were thus bribery as the Kim Young Sam government asserted, or whether they were informal tithes to those on high and ubiquitous as former President Roh testified, is less important than the evident and well-known nexus between the government, as represented by the chief executive, and all the chaebol. Within this context, the “real-name” bank account system, promulgated in August 1993, was an important reform. It required the use of a personal identification number (like a social security number in the United States) to open an account. It effectively limited (although did not eliminate) the institutional or personal power of the elite to hide wealth and avoid taxation. Through such legislation, the donations and corruption of former presidents Chun and Roh became known, for the transfer of funds to accounts in fictitious names was now impossible (although they could still be transferred through accounts of relatives or other willing accessories). This legislation and other attempts to limit the chaebol, which are envied, respected, and feared at the same time, were popular, but the symbiotic relationship between the government and business had been so close that President Kim, who at first was more confrontational with these conglomerates, became more conciliatory following his trip to Europe in 1995. In the last two years of his term, he took many business leaders with him on his international travels. As the South Korean economy declined in 1996, he needed increased exports to counter the wave of imports prompted by South Korea’s participation in the World Trade Organization and its entry into the Organization for Economic Cooperation and Development (OECD). In the end, President Kim Young Sam did not press the more far-reaching reforms of chaebol financing and corporate governance that many had called for, and it fell to the Kim Dae Jung government to push an agenda for more fundamental chaebol reform, with the more intense public and international demand for reform generated by the economic crisis.

ELECTIONS The local elections of 1995, the National Assembly elections of 1996, and the presidential election of December 1997 have indicated a growing maturity of the process and far greater stringency of regulations

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that have improved the system. There are now important laws limiting campaign expenditures and the length of electioneering, and there seems little doubt that the three elections were conducted in a fairer manner than ever before. The Central Election Management Committee, constitutionally mandated and composed of nine members, three of whom are nominated by each branch of government, has become more powerful and independent as the autonomy of its nominating sources has expanded. Although some 10 percent of the more than 5,000 candidates for local office in the 1992 campaigns were investigated for irregularities, only a small number were actually punished or brought to trial. Soon after the April 11, 1996, National Assembly elections, 913 people were booked with violation of election laws, of whom ninety-seven were elected lawmakers, including forty-four from the government party, ten from Kim Dae Jung’s group, and eleven from that of Kim Jong Pil.10 The National Assembly elections, in which the government lost its majority but later regained it by a small margin through the careful wooing of independent and opposition legislators, indicate several factors that demonstrate the effectiveness of the process as well as some of its problems. The races in perhaps one-third of the seats had been too close to predict, and there is evidence that the North Korean incursions into the demilitarized zone (DMZ) swung the results in favor of the government in perhaps seven to ten seats in the Seoul metropolitan area and in the northern part of the republic, where voters seemed to want stability rather than innovation. New faces did well, capturing about two-thirds of the seats of those directly elected, but regionalism was apparently still quite strong (see Chapters 3 and 7). Overall, the election campaigns were conducted in a manner giving marked credit to the society and illustrating the progress that has been made in South Korea in electoral reform and maturity. The reforms have had an effect at the “retail,” or local, level of electioneering and are expected to have important and positive repercussions on the “wholesale,” or central, level as well over time. The blatant buying of votes, which had been prevalent in the past, is far reduced, and legislation is in place to restrict it. Private citizens’ watchdog nongovernmental organizations also monitor the process of electioneering and vote counting. More problematic has been the financing of campaigns by corporate and other donations. The admission of former presidents Chun and Roh of acceptance of massive funds, much of which went into the political process, provided confirmation of something that was well known to the elite and assumed by the populace, although the magnitude may have

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been astounding. President Kim Young Sam’s refusal to discuss the funding of his 1992 presidential campaign (although he asserted he never personally received funds) confirmed the popular impression of illegal contributions.11

POLITICAL CHANGE AND REFORM UNDER KIM DAE JUNG In December 1997 South Korea held the most free presidential election it has undertaken since the formation of the Republic in 1948, resulting in the first peaceful transfer of power to an opposition political party through the elective process in South Korean history, and an event even quite rare among all Asian nations.12 The new administration of President Kim Dae Jung, inaugurated in February 1998, has attempted to reform the government’s policies internally and externally. To what degree modest government reorganization will prove effective is still questionable. Whether Kim Dae Jung’s new “sunshine” policy toward North Korea—which denies interest in unification (the code word for absorption of the North by the South) and instead advocates peaceful coexistence and expanded, friendly relations between the two states—will result in a lessening of tensions is still unclear. The Kim Dae Jung administration declared its intention to sever the close, almost incestuous, ties between the state and the chaebol and to reform the South Korean economy and rationalize the financial sector, which had been the source (with government connivance) of inappropriate lending that resulted in a debt-equity ratio for most of the major corporations that was internationally staggering. It has promised to eliminate corruption and has liberalized some aspects of South Korean society. It has called for reform of the National Security Law and has allowed the formation of labor unions by teachers, which the South Korean government had adamantly opposed before the United Nations Economic and Social Council in 1992. Another reform—permitting the participation of organized labor in electoral politics—was approved prior to the 1997 presidential elections. However, labor did poorly at the polls, perhaps because Kim Dae Jung, with his populist philosophy and following, preempted the labor candidate. The 1997 election brought a significant change in political and administrative leadership. Since the elections in 1963, those from the Cholla provinces (known as the Honam area) of the southwest had been denied political power and positions and deprived of a reasonable percentage of new investment and infrastructure. Per

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capita income was lower and business failures higher than in comparable areas of the country. The people of the Cholla provinces (and many from that area who have migrated to Seoul and other cities), from which President Kim Dae Jung hails, have essentially voted for him almost as a bloc, the intensity of that support increasing the more Kim Dae Jung was seen as persecuted and the more that discrimination took place. Now that this group has reached power, there has been an evident “affirmative action” program to place loyal members of both the Kim entourage and those from Honam in positions of authority. Many South Koreans who had been at the center of power under a series of different leaders now find themselves on the periphery for the first time.

ISSUES IN THE PROCESS OF DEMOCRATIZATION A variety of issues and questions continue to bedevil the substantial progress that South Korea has made toward democracy. They range from the most abstract to the most practical of considerations. Some argue that South Korea lacks two historical factors that helped formulate democracy in Europe: religious and class differences. Further, the argument continues, democracy was titularly induced, the rhetoric without the reality, without bases in the society: “Capitalism and liberal democracy were alien ideas whose institutions were to be created, rather than conserved by innovative actions, but the political elites defined their task as that of conserving what did not yet exist.”13 Here, however, we will concentrate on a set of different issues related to the democratization process. The Attributes of Power The most fundamental of the democratic issues facing South Korea cannot be quantified and is complicated even to conceptualize. Yet it is the base problem from which many hydra-headed manifestations spring—the concept of power. Many in traditional societies, including important residual elements still prevalent in South Korea even as it has spectacularly developed and modernized, regard power as finite and personalized. If power is conceived of as limited, then the sharing, delegation, compromise, or decentralization of power becomes a zero-sum game, always with a loser of such power and the prestige associated with it. To the contrary, an approach premised on the infinite nature of power, on which modern

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concepts of administration are based, could mean that sharing or decentralization may become a positive force by increasing power at all levels to all parties. If power is viewed as finite, it is also personal. Thus factionalism, the reluctance to compromise, the unwillingness to apologize or admit error, and the tendency to regard information as a source of power are all results of such an inchoate but nevertheless important premise.14 The hierarchical nature of South Korean society reinforces the tendencies to control personally and, conversely, to abstain from delegation wherever possible. This tendency appears not only in personal relations but in institutional ones as well.15 Power is a critical variant in the academic literature, but it is singularly absent in the foreign aid materials on furthering democracy and democratic programming, simply because it defies statistical analyses. Defining the issue may be more art than science, but that does not negate its importance in the South Korean context. Many of the characteristics typical of the political system or society more generally are caused or exacerbated by this personalization of power. The history of factionalism in South Korea; the strong, some would claim almost autocratic, presidential system; the identification of political parties with their leaders, rather than with a program; the lack of institutionalization and training of new leaders in the political party process; the centralized control over peripheral areas, even under the present local government system and its long delays in reaching its present ambivalent status—these all may be traced in part to unarticulated but nevertheless real concepts of the finite nature of power.16 Lest we assume that the personalization of power is a particularly political phenomenon, we should look at the chaebol, most of which are still controlled by families and, within that context, the most senior members of those families. Civil society reflects the same phenomenon—strong, personalized leadership of advocacy and other private organizations, including private universities. The strengthening of civil society may be regarded as a democratic good, but there should be no idealization of these groups’ function, for the same forces that affect the bureaucracy and other institutions also affect nongovernmental organizations. The private sector, either profit or nonprofit, is no panacea against the virus of traditional power concepts. The attributes of status and thus certain types of power within the family are also subject to the same set of concepts. The concept of power and control of information leads to the search for orthodoxy and ideology, which is not simply a product of

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the warlike situation on the peninsula, although this greatly exacerbates the situation and defines various of its parameters, but rather is historically pronounced and is apparent in South Korea’s educational system.17 So citizens are required to turn in North Korean propaganda leaflets that they might find on the ground to prevent “confusion.” Deviant political views, whether between government and opposition, within factions of the same party, or between different positions on the part of North Korea and South Korea, are said to be “impure” or involve “ideological pollution,” expressions indicating that the search for orthodoxy is important to the leadership.18 So it becomes difficult for authority to admit error, making compromise onerous although not impossible. Newspapers normally do not print retractions; the government does not admit mistakes. This is reflected in the courts, where over 90 percent of those tried are convicted. Authority does not articulate fault. If in dire circumstances mistakes must be admitted, they are personalized and individuals will resign, but institutions are rarely reformed. This system of personalized power is reinforced by the strongly hierarchical nature of South Korean society, emanating from its preConfucian origins. It is reflected, for example, in its language. Korean is not normally linguistically egalitarian. One might consider also that as South Korea adapted Chinese institutions to the South Korean milieu, it did so in ways that strengthened its hierarchical social structure. So the yangban social system, the examination system, marriage regulations, and other elements of a Confucian society were adapted and designed for the self-perpetuation of the South Korean elite to a degree unknown in China, and perhaps these were more virulent in South Korea because of the relatively small size of the elite. Although Japan has had a strongly hierarchical system as well, it had a heritage of feudalism, where individual loci of power developed somewhat autonomously from the center and the court. This did not happen in South Korea to any significant degree. So hierarchy in Japan was mitigated by feudalism. Hierarchy alone need not be an impediment to democratic growth, as we have seen in England and elsewhere, but combined with this emphasis on personalized power, it has had a strong and authoritarian influence on past South Korean society.

THE PRIMACY OF THE PRESIDENT South Korea has a strong presidential system, which even under democratic institutions tends to function in an autocratic manner.

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There has been much debate in South Korea during the past decade whether a parliamentary system with a presidential figurehead and a strong prime minister might be more suited to democratic growth. Such a system, it is argued, is more responsive to immediate political changes because a parliamentary vote of no confidence can force an election without waiting for the statutory five years under the present system. The intellectual debate on which approach would be better suited to South Korea and to democratic deepening has been obscured by charges of the potential use of the parliamentary system to perpetuate the rule of any government party. It is said that when Kim Young Sam joined the government’s Democratic Liberal Party (DLP) in January 1990, he did so on the understanding that he would advocate a parliamentary system (and thus keep the party in power), and some accuse him of reneging on that promise. So the one specific platform issue in the 1996 National Assembly elections, brought forth by Kim Jong Pil and his United Liberal Democrats (ULD), was the possible change to a parliamentary system, which was also a key plank in the ULD’s successful electoral alliance with Kim Dae Jung’s National Congress for New Politics (NCNP) in the 1997 presidential election. Certainly the merging of three parties into the DLP in 1990 was designed to perpetuate single (government) party dominance of the legislature on a previous Japanese model and indeed was so articulated. The South Korean presidency seems to be treated with an aura usually reserved for royalty in an earlier era. That the president was beyond the reaches of the legal system seems until recently to have been the modus operandi of the Blue House.19 The trials of former presidents Chun and Roh indicate how far along in the political process South Korea has progressed, although some consider the prosecutions to have been personally vindictive.20 An outsider gets the impression that internal dissent within the Blue House is treated with great circumspection, and few seem willing to challenge any president directly. In any democratic society, direct confrontation may be avoided through third-party debate, such as that regularly occurring in the press. Although there is no question that the press and media are far more free than at any point in South Korean history, there are at least evident self-imposed limits that restrict what is reported; how stories that are critical, especially of the president and his entourage, are phrased; and how much emphasis they are given through placement in the newspapers. That South Korean presidents seem to regard themselves as above the law was demonstrated again in November 1996, when former President Choi KyuHa refused to testify in the Chun/Roh treason and mutiny trials because he said it would set a bad precedent for future presidents.

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CORRUPTION President Kim Young Sam’s first two years in office were perceived as constructively reformist. In addition to instituting a “real-name” bank account system as well as a similar law mandating that real estate holdings be registered in the names of the actual owners and indicting and retiring some senior members of the armed forces in connection with procurement irregularities and bribes for promotions, he forced the senior officials of his administration to declare their assets as well as their family’s and dismissed many whose financial growth was inexplicable. These actions were well received. Political corruption, brought into public scrutiny in 1995 in cases remarkable for their egregious, personalized nature rather than their existence, is systemic. No accusation, proof, or conviction on a specific case of bribery or favoritism on the part of anyone exposes the roots of the issue. South Korea is a culture where power is personalized; where parties exist to retain or acquire power for their leaders and—through them—their entourages; where party programs are essentially indistinguishable or absent; and where there is a marriage, albeit sometimes stormy, between the state and the business conglomerates, the chaebol, with much of the media as maids of honor. Payments by business to individuals or parties either in or out of power are endemic and twofold: they are informal taxes on doing business and insurance of good relations with future leaders. In a sense, they are tithes—institutional offerings to secular organizations for divine intervention from those on high. Corruption becomes endemic under such circumstances. Big business has not thus been a part of what in the West would be considered “civil society,” defined in the South Korean context as those institutions autonomous of governmental control. In a culture where innocent gift giving is deeply ingrained, the extension of the custom to pervasive corruption is difficult to erase, although the jailing of culprits is likely to prove popularly purifying—the higher the individual, the greater the emotional purge. Thus the arrest of Roh Tae Woo, Chun Doo Hwan, and others was cathartic. Yet the fundamental issue will remain unresolved without more basic, structural reforms. Most South Koreans believe that their officials are corrupted to some degree: 44 percent of those surveyed rated more than half of their civil servants as corrupted, and 62 percent said more than half of elected officials were so tainted.21 South Korea has generally been regarded as a state where corruption was significant but essentially institutional, not “sultanistic” (in the sense of massive personal accumulation by leading officials).

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Funds were provided to build institutions in which the leadership was interested such as political parties, the “Ilhae Foundation” of Chun Doo Hwan, or special charities. They were also used for personal gain, but the problem was certainly viewed as different in magnitude from that of Ferdinand Marcos or Mobutu Sese Seko. This analysis has now been shown to be inadequate. In the past, political donations, also known as “voluntary contributions,” were discreetly distributed. They had been estimated as about 22 percent of chaebol profits. Roh kept them, however, and even received interest on loans of some of them, and is said to have invested in real estate with other portions. President Chun is said to have kept several hundred million dollars as well as liberally disbursing some of them to his entourage. President Roh’s daughter had previously been found guilty by a U.S. court of illegally importing $200,000 (via Swiss bank accounts), but there was scarcely a ripple in the muddy South Korean media sea at that time, although later that issue figured prominently in the press. The overall magnitude of corruption, to a South Korean populace that seems willing to accept limited personal use of such funds, was outrageous. After all, the definition of corruption is culturally determined, and each society sets its own limits on the use of the term. As the South Korean expression indicates, “The arms bend inward” (that is, take care of your own). Former President Roh claimed that receiving such funds was virtually inevitable given the established custom in South Korea, although he did not excuse his own actions. In a sense, he was quite accurate because the problem began in the First Republic and was pervasive thereafter. The fate of South Korea’s presidents has been singularly tragic (Rhee Syng Man was exiled; Yun Po-sun deposed; Park assassinated; interim president Choi Kyu-ha irrelevant and manipulated by Chun; and Chun disgraced, living in a remote Buddhist temple, and later sentenced to prison, along with Roh). Rhee and Park, however, were known to be particularly abstemious in terms of personal wealth, and Yun came from a wealthy background—all contrasting with Roh and Chun. President Kim Young Sam, already facing political dilemmas of great moment before this scandal, was deeply stung. He claimed personally to have received no funds from President Roh since entering office, but charges of illegal overspending by the government party in the 1992 election campaign circulated widely in the press. Many consider the issue of whether the president personally received funds as irrelevant. Some say that party financing was carried out by Kim Young Sam’s son; the press is generally very discreet on this issue. Kim Dae Jung, in a move clearly designed to

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conduct damage control, immediately admitted receiving $2.6 million from former President Roh as a gift without strings, while Kim Jong Pil remained silent amid pervasive rumors of his wealth. In March 1996, President Kim Young Sam was hit by another scandal, this time among the Blue House staff itself, when a longtime aide was indicted for bribery after his activities were revealed by an opposition politician. Rumors abounded concerning others in the Blue House as well. Further scandals at various levels of the administration were reported monthly in the press, and two members of his cabinet resigned because of corruption issues, one because his wife was charged with receiving bribes. Even more devastating to President Kim’s credibility on the corruption issue was the indictment of his own son and confidants in a scandal involving illegal loans to the bankrupt Hanbo Steel Corporation. The capacity of the chaebol to provide such large amounts of money for political and personal purposes is more easily understood when one considers that the total assets of the thirty-largest chaebol in 1995 were about $300 billion, or over three-quarters of the gross domestic product (GDP), although one also has to note that the underground economy is estimated at up to 20 percent of GDP. The four largest chaebol, although employing only 3 percent of the workforce, accounted for about one-third of all sales in South Korea and almost 60 percent of all exports. In 1991, the aggregate sales of Samsung, the largest chaebol, equaled the total national budget. Their subsidiaries and magnitude have been likened to an octopus enveloping the nation. They simultaneously excite admiration, envy, and concern. One essential issue for South Korean society is the degree to which uncontrolled or even ineffectually curtailed corruption in the political process will create distrust of democratic procedures and undercut the faith in democratic institutions and deepening. There is widespread public interest in limiting corruption, and future leaders who can demonstrate a clean record and crusading zeal on this issue are likely to be very popular. Conversely, a regime regarded as corrupt will see diminished political legitimacy.

THE JUDICIARY The traditional role of law and the judiciary in a Confucian state was to enforce punishments, and it was seen as the weapon of an administration against those who were obviously guilty of circumventing societal norms. Although that attitude is evolving quite

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rapidly, until recently the courts and the whole judicial process were subservient to the executive branch. Only since the political liberalization have the courts begun to feel even a modicum of autonomy. No case was brought before the Constitutional Committee, the highest tribunal on such questions and now replaced by the Constitutional Court, in the fifteen years of its existence before 1987. That the judiciary is still strongly influenced on important issues by the recommendations of the executive is evident. In no instance has this been more evident than in 1995, when the courts first found that they had no jurisdiction to rule on the constitutionality of a successful coup (December 12, 1979), and then a few months later, when the president decided to take on the heritage of former presidents Chun and Roh, the court reversed itself. The need for international law to form a basis for trade and investment has strengthened the position of the legal profession from its previous, limited role. Law schools have been the normal recruitment channel into the bureaucracy and the foreign service, as well as for prosecutors and judges, but today there are many more lawyers, and their influence on domestic as well as international affairs is strikingly greater. Over time, one may see the growth of the independence of the judiciary, but the process is still likely to be slow, indeed, slower than other institutional changes in the society. Law continues to be viewed primarily as a method of control rather than an independent arbiter of rights. As South Korea is forced to open its services under World Trade Organization and OECD regulations, the legal profession will become more international as the local monopoly is broken, and law may become more important in the society. Although the popular reputation of South Korea is of a contentious and emotional society compared to its Confucian neighbors, it is essentially nonconfrontational in legal terms, so the pattern has been for little direct confrontation between individuals through the legal system or between individuals and the state. In marked contrast to the Western tradition where the judiciary becomes the arbiter of such direct challenges, the South Korean situation creates a different concept of the role of the judiciary and law, making it less autonomous. This traditional attitude is changing, as more citizens now protest to protect their rights, of which they are more conscious. An independent judiciary forms the very core of democratic governance, for it is the only method, short of awaiting an election or violence or revolution, for a citizen to have redress for actions taken by the state or others that are predatory or discriminatory. Of

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all institutions of government, the South Korean judiciary has demonstrated the least autonomy from the control of a strong executive.

HUMAN RIGHTS AND CIVIL SOCIETY There is no question that human rights have vastly improved in South Korean society since political liberalization in 1987. Yet, in spite of the government’s public pronouncements to the contrary, there are significant limitations on those rights, as generally understood in a universalistic context, and at the same time a broad public acceptance of a greater role for government in areas in which the privacy of individuals in other societies might be protected. The most important legislation is the National Security Law and its antecedents and related legislation. This law dates virtually to the beginning of the republics, and although it has been changed and amended and more recently circumscribed by a Supreme Court decision, its breadth allows the prosecution of any individual engaging in antistate activities, which include spying for, having unauthorized contact with, or holding attitudes favoring, supporting, or advocating North Korea as well as criticizing South Korea. The law, which is now employed sporadically as the government wishes, may be so interpreted that advocating its elimination, as North Korea does, could be grounds for incarceration under that very law. Less than 2 percent of those arrested under this law are tried for spying, most instead for making some public gesture in demonstrations or writing that is interpreted as favoring the North. The level of incarceration under this law has not, surprisingly, diminished since political liberalization. Between 1980 and 1992, 2,330 persons were arrested under this act, of whom 1,095 were incarcerated from 1988, after liberalization. In 1993, 105 were arrested; in 1994, 389; and through November 1995, 269. In August 1996, thirtyeight students who demonstrated in Yonsei University were also arrested and charged under this act.22 The conviction rate is over 99 percent. Books may be banned on such grounds as praising, encouraging, or abetting antistate organizations; denigrating the capitalist system; inciting class warfare; or critiquing South Korean history from the perspectives of radicalism, dependency, socialism, and so on. Civil societies, those organizations of a voluntary, professional, or associational nature autonomous of government, were not allowed to develop to any significant degree before 1987. They now have flourished, and South Korea has become a pluralistic society. Advocacy

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organizations monitor such subjects as the environment, women’s rights, elections, consumer issues, and the media, but South Koreans are said to feel insecure about joining human rights groups, which exist and are active but remain far smaller than many of the other nongovernmental organizations.23 At the same time, the role of the government overall in the society has been pervasive, and not simply in the well-known and researched field of economics. Residual Confucian paternalism is operative, and respected by the people who tolerate and in some cases seek governmental controls. Everything from sumptuary laws to edicts on daily life are enacted or enforced without public hearings, with the unstated assumption that the state knows best. Conformity of action and orthodoxy of views are thus pressed by the state, accepted by a wide range of the people, and in general supported by the media.

THE MEDIA The mass media are more independent than they have ever been in the history of South Korea. They are ubiquitous, with sixty-eight daily newspapers, about 6,000 magazines and journals, and more than fifty television channels, including those on cable. The press, especially, is highly influential, and South Korea is a nation of newspaper readers. In spite of important advances in press freedom, a variety of factors impinge on the operation of a press autonomous of government and other vested interests. The days when representatives of the Korean Central Intelligence Agency (KCIA) sat in editorial offices and censored news on the spot are over. The state exercises substantial influence on the media through the National Security Law and other legislation and through the personal and hierarchical relationships central to South Korean life. This encourages conformity on important issues, as does chaebol ownership of some of the media and their extensive authority through their massive expenditures on advertising. The expansion of the newspaper pages, which had been rigidly controlled by the government, perhaps accidentally increased the power of the chaebol. A few years before this change, advertising income ranged from 30 to 50 percent of newspaper revenues; today advertising is about 90 percent, mostly from the chaebol, which also directly own four of the leading newspapers. There is little, if any, investigative reporting in South Korea. Some 97.8 percent of political news, 76.5 percent of social news, and 75.5 percent of economic news are said to be press releases by the

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government or other interested parties. Newspapers actively seek unanimity of views rather than a distinctive approach to stories or scoops. Self-censorship seems a major element in the operations of all the media. One newspaper, Hangyerae, is of a different stripe, founded after political liberalization in 1987 and owned by its staff. It is the most liberal of the major dailies. Because of all of these factors, the media as a whole are not considered independent enough to be counted as part of civil society.24

LOCAL GOVERNMENT Since the coup in 1961, elected local government was prohibited. All local administration was centrally controlled by the Ministry of Home Affairs, which also controlled all the police. The charge at that time that local government was corrupt may have been true, thus providing the objective rationale for eliminating elected local officials, but the military’s concern to exercise complete administrative control at all levels mattered most. It also demonstrates the deleterious effect corruption may have on the democratic process. Although elected local government was stipulated in the revised constitution of 1987, it was only partly and belatedly introduced in 1992 (with unpaid provincial advisory councils) and further expanded in 1995 to its present form of elected governors of provinces, elected mayors of major and smaller cities, county administrators, and councils at all levels down to city wards. The local elections of June 1995 were conducted under the most stringent election laws ever promulgated in South Korea and by all accounts were the fairest ever seen. The result was a resounding defeat for the government party, the DLP. Of the positions of nine governors, the mayor of Seoul Special City, five mayors of metropolitan cities (over 1 million in population), 875 metropolitan and provincial councilors, and 4,541 city, county and ward councilors, opposition and independent candidates won in a majority of the races. The Cholla provinces, as expected, went to Kim Dae Jung’s party (at that time, the Democratic Party), whereas the Chungchong provinces were won by Kim Jong Pil’s group (the United Liberal Democrats). Seoul was swept by the opposition with the election of Cho Soon (economist from Seoul National University, former deputy prime minister, and governor of the Bank of South Korea) as mayor, along with twenty-three of the twenty-five wards of the city and 124 of the 133 seats on the metropolitan council. Of fifteen governor and special city/metropolitan city mayoral slots, the government won

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five, the opposition seven, and independents two. The government suffered a disastrous defeat. Further, and more important for the longer term, is that now there are local officials, locally elected rather than appointed by the center. Some are independent and some affiliated with national parties, and many seem to aspire to national office through the National Assembly. The political parties will of necessity become somewhat more decentralized as elected officials have local bases that the center cannot destroy, and the central party structure will have more difficulty in arbitrarily choosing candidates for local office. The prospects for greater pluralism within the political party structure are thus very good. In the long run, this development is likely to be highly positive for the democratization process. Some at the local level say that in the process of devolution of some authority, the provincial administration has become irrelevant—it is simply another bureaucratic level through which requests have to pass from cities and counties to the central administration, but the provinces have no real role anymore. Further, the election of mayors of smaller cities and county chiefs has eliminated an important source of bureaucratic and social mobility because these posts were usually filled from below although appointed from above; thus the newly elected incumbents are sometimes at odds with the bureaucracy that they head but cannot control. Although the elections were widely touted in the press and overseas as providing local autonomy, that optimism seriously misstates reality. Local organizations, whether provincial, county, city, or ward, depend on their higher administrative unit for financing (in some cases two-thirds of their funding). Further, the sources of coercive power (e.g., police) and the judiciary are centrally controlled, as are public school teachers beyond the primary level and officials of various ministries. Regulations as to the roles of local government in some areas are still unclear or unformulated, and central officials from the Ministry of Home Affairs still play important, pivotal roles in the process, even appointing lower-level officials.25 For every elected mayor or governor, the Ministry of Home Affairs has appointed a deputy. Growth in local autonomy moves the process of pluralism forward, but there should be no illusions as to the arrival of the local democratic millennium. The periphery remains largely controlled by the center. Insofar as locally elected and responsive government is considered a cornerstone of democratic governance, South Koreans need to give continuing attention to strengthening this institution through training and broadening of their generally limited experiences.

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POLITICAL PARTIES, ENTOURAGES, AND THE NATIONAL ASSEMBLY One of the most obvious manifestations of the personalization of power lies in the political party process. Although political parties are necessary to the effective functioning of democratic political systems, the present and past operations of political parties in South Korea demonstrate that they perform not as exponents of varying views of public policy but rather as the vehicles of those in command to expand their personal roles in wielding authority. Political parties and their designations in South Korea change with a rapidity reflecting the role of the leader, not the principles on which the party is based, because such principles are rarely evident. There is no public record of individual legislator voting patterns because it is assumed that all members of a party will vote with its leader as a bloc. (A modest exception was a few crossover votes in the debate on entry into the OECD in November 1996). The political party almost always serves as a way for its leader either to obtain or retain power. It is normally created by its leader or in a few cases inherited (President Roh) and then changed to reflect the interests of its leader and ensure the predominance of his faction. President Kim Young Sam, who was associated with ten different political parties during his political career, inherited a renamed party on which he attempted to put his personal imprimatur, forcing out other elements from that party into a new configuration, remaking the party in his own image, and then renaming it to improve its public appeal. There have been more than 100 political parties in South Korea since independence. This phenomenon has been consistent since South Korean independence in 1948. The left wing has been denied the legal capacity to form parties under various permutations of the National Security Law and other legislation. Labor was not allowed to enter the political process until 1997, but even if their participation had been allowed, they would not likely have escaped the factional-entourage syndrome prevailing in the society. The entourage phenomenon is not, of course, unique to South Korea. But the proportional representation system in the National Assembly, in which forty-six National Assembly seats are assigned by party based on the percentage of the votes received by that party in the general elections, gives it a special fillip. The leader can reward loyal followers by nominating them for these postings. Thus, those so chosen have no political base (although they may have substantial name recognition and are often chosen with that in mind),

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were not directly elected, but were appointed by the party leader and thus must rely completely on him for their rewards. It has been charged that this system has been abused in the past, for a “safe” proportional seat (i.e., one that is near the top of the party’s ranked list) is said to cost enormous amounts in campaign donations. The real issue may not be corruption, however, but rather that the choice of those to fill proportional representation seats concentrates even more power in the hands of the party leader, thus further diminishing the democratic nature of the party system. Because of widespread popular and press cynicism regarding these legislators, they are alone in having no government pension system. This entourage system discourages continuity in platforms or in the training of future party leaders. So at any given point the party is a reflection of its leader, and should the situation change, a new party may be similarly constructed. Although a real multiparty system does exist, it discourages the coherent discussion of enduring public policy issues and does not promote the stability of the political system. It is little wonder that the public regards many of the politicians as self-serving and devoted to their own aggrandizement, not to the public interest. Public opinion polls in the past have found little differentiation among political parties in the public’s mind.26 The multiparty system in South Korea is inadequate either as an expression of popular needs or as a forum for public policy debate, and thus in its present operative mode inhibits democratic growth.

REGIONALISM Regionalism within the homogeneous South Korean culture has been evident since historical times. It was suppressed under the Japanese colonial period, the U.S. military government, and subsequent autocratic rule. Thus, its flowering is in part a product of its past and its suppression and a reflection of political liberalization. Its virulence may be attributed to political discrimination, heightened and focused by the Kwangju massacre of 1980. In the 1990s, the political parties have become more regionally focused. The origins of the leader determine the location of the strength of the party, demonstrating the importance of personalism as much as regional differences. So Kim Dae Jung is overwhelmingly strong in the Cholla provinces and to a degree in Seoul (to which many from the Cholla provinces have migrated); Kim Young Sam has been paramount in Pusan and South Kyongsang Province;

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Kim Jong Pil is the favorite son of the Chungchong provinces. (Previously, Park Chung Hee, Chun Doo Hwan, and Roh Tae Woo all came from Taegu and had a North Kyongsang regional base.) Although each party has recognized the limitations of regional focuses and loyalties, because under such a system no party can win a majority of the votes (although it could win a majority of the seats), and although each party has tried to broaden its base of support, regional identification remains a primary determinant of voting behavior (see Chapters 3 and 7). The freeing of the political system from the constraints of authoritarian control has allowed regionalism to develop, and it reflects to a degree the perceived advantages to be gained from a favorite son winning an election and the accumulated resentment and grievances (han) of past discrimination. Regionalism thus reflects the personalization of power. The 1996 National Assembly elections exhibited this regionalism, with the power bases of Kim Young Sam, Kim Dae Jung, and Kim Jong Pil remaining virtually solid. In the Seoul metropolitan area (including neighboring Kyong’gi Province), where regionalism is not so apparent because of mixed in-migration, for the first time the government party was able to capture a majority of the seats. The degree to which regionalism will continue to be important following the natural generational transfer of political power is an unanswered question. Whether national issues can transcend regional ones in the near term is problematic. Regional loyalties are strong, certainly stronger than party affiliation, religion, and class. The degree to which social equity will be perceived in income distribution, civil service appointments and positions, and in other aspects may in part determine whether the issue becomes less contentious. Reliance on regionalism undercuts effective national debate on national public policy issues essential to democratic governance. If economic and social discrimination is perceived to diminish, then regionalism may begin to play a reduced role in political life, although it is likely to remain an important attribute of the concentric circles of loyalties emanating from the family, clan, school, and other associations.

SOCIAL EQUITY AND DEMOCRATIZATION During its period of rapid economic expansion, South Korea was known as having relatively equitable income distribution, which was attributed to the agrarian reform and redistribution of Japanese assets in the late 1940s and early 1950s and the destruction of the

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Korean War that, in effect, induced a generalized and shared poverty. Income disparities, however, began to rise as rural incomes fell behind urban workers’ incomes, creating a push factor that continued to expand the urban populations pulled in to take advantage of jobs in new growth sectors. The government has attempted to improve rural incomes through heavy subsidization of producer paddy and other farm prices and the encouragement of high-value specialty crops.27 Yet over one-third of rural incomes come from offfarm sources, including both part-time employment and remittances from family members in the urban sector. Although two-thirds to three-quarters of the population consider themselves to be members of the middle class (55 percent would be more accurate by World Bank standards), there has been growing dissatisfaction with the apparent affluence of the wealthy compared to workers and other elements of the population. Even though studies in the past have indicated that workers in chaebol concerns are better off than those in small firms, there is little question that labor has been controlled and manipulated to ensure continued expansion of exports and to keep South Korea internationally competitive. As Chapter 5 indicates, some institutional reform of labor was finally achieved in the late 1990s, but historical grievances and tensions remain, and these have been aggravated by economic crisis and the huge increase in unemployment that has resulted. The social and potential political impacts of the financial crisis are noteworthy. Although statistics are not yet fully available, there has been an evident rise in income disparities and a disintegration of much of the middle class since November 1997. According to government statistics, unemployment hovers under 2 million, or about 7.5 percent of the labor force, but this number is probably understated. Consumption is down, and even the most sacred of family expenditures on children’s education has been cut. The full impact of these events will not be felt for some time, but they may be highly significant. An unemployed intellectual elite is emerging of some 300,000 persons, in a meritocracy where college and postgraduate degrees have been the universal path to economic and social success. The government has been urgently attempting to build (for the first time in South Korea) a social safety net for the unemployed. On the surface, the election of Kim Dae Jung to the presidency and the economic crisis seem to indicate major shifts in South Korea’s power structure. But underlying these events are continuities manifested in the responses both to political change and financial crisis that may be even more important for understanding South Korean political culture and predicting the future of its

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democratic institutions. These continuities involve concepts of power, the role of the state, and popular attitudes toward governance. The basic concepts of power and authority have shown little evidence of change since the December 1997 election—they are more primordial in nature and evolve only slowly. Power is still highly personalized, and leadership continues to brook little criticism. Loyalties are more important than programs, and even if one individual may not look upon the exercise of power as a zero-sum game, the entourages around leaders are more conservative and manifest more traditional attitudes toward authority. A loyal opposition is still an oxymoron, and the National Assembly continues to squabble over any issue, demonstrating that jejune political attitudes still prevail in that important body. These attitudes toward power have a direct relationship to the role of the state. Although one of the continuing cries from the South Korean government has been that the state must withdraw from control over the private sector (a concept that is crucial to reforming the Asian economies hit so hard by the financial crisis), the role of the state has, necessarily in some cases, increased. To salvage bankrupt financial institutions, the state has had to take over the operations of many of them and has been attempting to dictate to the chaebol the extent and types of reforms they must undertake and the types and numbers of industries and sectors in which they may be involved. The state has mandated that their debt-equity ratio must be reduced to 200 percent by the year 2000, from figures three to ten times that amount. One could argue that the role of the government has increased at this time, although its nature is obviously different than in the past. But the power of government should not be underestimated; the control of the banking system has given the state the most financial power it has had since the Park Chung Hee period (1961– 1979), when the government had a complete monopoly on institutional credit. The administration can withhold credit from organizations and institutions that do not do its bidding, and there are extensive, if anecdotal, indications that the press, which is heavily indebted, has been subject to such pressures. In the first year of President Kim Dae Jung’s term, there was very little criticism of the regime, although it grew rapidly thereafter. President Kim had called for a political “honeymoon” period of a year, and many in South Korea felt he had the best chance of any political leader to deal with the financial crisis because he had the greatest credibility with the labor unions. The present administration is not completely a new broom, even though many in the previous administration may feel this way. Kim

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Dae Jung is constrained in implementing many of his policies by his conservative coalition with Kim Jong Pil’s ULD. Although popular sentiment supports revising or eliminating the National Security Law, it has not yet been done because of conservative opinion. Political surveillance continues for other reasons as well. The president’s more conciliatory policy toward North Korea is subject to criticism, furthered by the provocative remarks and actions of the North Koreans themselves. In spite of promises to move toward a parliamentary system of governance, which requires a two-thirds vote in the National Assembly to amend the constitution, a continuing, strong presidential system is likely to remain in place for a considerable period. The scandals linking the chaebol and government shocked the masses of the populace, not because political donations were unknown, but because the magnitude of the funds and their personal use pointed out the growing disparities between the labor force— whose wages had been encouraged by the government to remain as low as possible through targeted increases—and industry, which can afford to donate hundreds of millions of dollars to individuals and political parties. The growing availability of funds has shaped not only politics but social perceptions. Until the 1997 economic crisis, relative affluence meant an upsurge in conspicuous consumption, which was ubiquitous even though it was continuously derided in the press. South Korea is a “brand-name society,” in which only the most famous or expensive of goods and services are appreciated. Although the government complains about consumption expenditures on luxury imports, expensive locally produced goods create the same effect—which is to increase class differentiation, envy, and potential political dissatisfaction, especially in periods of relative economic downturn. The dangers to democratic deepening may eventually come from class cleavages, which to date have been kept to a minimum. If equity as perceived by the populace does not improve, it could lead to cynicism about the political process and growing polarities of political power.

THE PROSPECTS FOR DEMOCRATIZATION Three aspects of the prospects for democratization over the medium term—the next five to ten years—merit particular attention. Two are internal: one involves the question of attitudes toward power and how these will evolve, and the second concerns institutional development and change. How these will interact is probably the most

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important of the questions to be asked. The third issue is that of external influences on the society and what effects these might bring forth. Popular Perceptions Attitudes toward democracy and the process of democratization have shifted markedly in a positive manner since political liberalization. Democratic perceptions have risen from 27.4 percent in 1988 to 61.6 percent in 1994, and although only 20 percent of the population believed South Korea was institutionally and culturally democratic in 1988, that figure had risen to 61 percent in 1994.28 Yet researchers note a more complex pattern of attitudes toward democracy. In 1994, 84 percent said that more democratization was needed, but only 36 percent were willing to allow labor to participate in the political process and 35 percent to lower the voting age from twenty, the current limit, to eighteen. Only 15 percent were fully committed to expanding democratic politics.29 One year after the onset of the economic crisis (in October 1998), a survey by the inveterate and most established pollsters on South Korea—Professors Doh Chull Shin and Richard Rose—found that most South Koreans believed the main cause of the crisis was incompetent politicians (63 percent), compared to 4 percent who attributed the failure to democratic institutions (28 percent said both were responsible, however).30 Significantly, 38 percent of the people believed that the replacement of military government by elected governments contributed least to the crisis. In addition, 63 percent felt that economic reforms had to be pursued even if it meant significant personal hardships, and closing down debt-ridden banks and enterprises was believed to be the most effective means to deal with the economic problems. Although democracy may not yet have weathered all the storms of the crisis, the survey found 36 percent of the population to be consistently pro-democracy, whereas 26 percent are pro-authoritarian government. Half the respondents (51 percent) wanted a democratically elected president to handle the economic crisis, whereas 44 percent thought that a “dictator like Park Chung Hee” could sort out the problems best. Yet a much larger majority—some 69 percent of those polled—strongly believed that elections and voting were the best means of choosing a government (16 percent were either fearful of or cynical about that method). When asked whether democratic or authoritarian institutions were best for South Korea after

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the economic crisis, 36 percent were favorably inclined toward democracy, whereas 25 percent were less favorably inclined. Only 31 percent favored reinstituting authoritarian institutions. Encouragingly, there is particularly widespread support in South Korea for the idea of democracy (apart from its practice). Fully 85 percent favor democracy in principle (at least somewhat); only 7 percent flatly oppose it. About 81 percent believe that the South Korean political system should be made more democratic. People overwhelmingly believe the country will continue along a more democratic path, and they seem to believe that the political situation has significantly improved and that political corruption has decreased, although the implications are that more needs to be done. Faith in democracy seems to exist more in theory than in reality. When asked to choose, 65 percent felt that economic development was more important than democratization (8 percent put democracy above everything; 26 percent believed both were equally important). Further, 81 percent believed that reducing economic inequality was more important than expanding political freedom (16 percent). The social science research available on attitudes toward power, differentiated between the younger and older groups in the population, indicate little significant difference except among the most youthful adults polled; that is, most regard power, in the opinion of the surveyors, as rather traditional and personalized (although South Koreans in their twenties are more often committed to democracy).31 This result does not imply that political attitudes necessarily will remain static, but if a simple transfer of power from one generation to another is assumed to solve the question of how power is conceived and exercised, then this research indicates that changes in the basic concepts of power and their translation into politics may not come as completely or as quickly as some optimists may hope. South Korean society has a tendency toward orthodoxy in both behavior and in thought that undercuts the democratic process, built as it is on the free exchange of ideas. After Chosun Dynasty rigidities, Japanese colonial suppression, the military government era, and the authoritarianism of the republics, this is a pervasive phenomenon, only now under attack in intellectual circles. Yet it prevails in education, in government, and throughout much of the society. Its recent rationale lay in the North Korean danger, but its genesis is much deeper. Although diversity is titularly acknowledged as often as possible, it is rarely regarded as inherently desirable and worth strengthening. Much of this attitude in inchoate form

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underlies the problems in democratic movement, which became apparent in the August 1996 confrontation between students at Yonsei University and the police. Radical students demonstrated in ideological accord with some North Korean positions, and in the aftermath President Kim Young Sam called for a new ideology to be infused into the school system to prevent other such subversive ideologies. Neither side was prepared to consider that democracy depends on the exchange of views with a degree of civility, so apparently lacking in this instance.32 Survey research provides a snapshot at one point in time. Attitudes and especially values may change slowly, but they do evolve and are modified by age, experience, and the pattern of unfolding events. Thus we should not be too pessimistic in our analysis. In particular, there is an intellectual danger in attributing to Confucianism and its related values the problems associated with nondemocratic forces today and to project these attitudes into the future. As we first learned that reliance on textual (biblical) Christianity did not explain the rise of capitalism, and as we later learned that the Confucian denigration of merchants and commerce did not prevent the remarkable economic growth of post-Confucian societies, so we should not conflate status-oriented, hierarchical, paternalistic, and orthodox attitudes in the Confucian Four Books and their myriad commentaries, the neo-Confucianism of Chu Hsi and his South Korean disciples, with later social structures and norms. All societies seek to accommodate conflicting views and often succeed. A strength of South Korea has been its pragmatism. Institutional Change Institutions are evidently evolving in spite of the retention of traditional attitudes. However, as yet rather little has changed in the basic nature of the party system. A major cause of the slowdown in the democratization process is the operation of the political party system, which still remains highly autocratic in nature. The opening of politics reflects opportunity, but it also indicates that traditional, personalized power remains and is perhaps more obvious on the political scene. One author, writing in 1994, stated that the political party system, while advocating democratization of the military and “anti-democratic government agencies,” over the past six years has failed to transform the multiparty system in South Korea into a truly democratic party system. As during the period of authoritarian rule, South Korean parties do not

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have broad and reliable ties to the vast majority of the mass citizenry. . . . The South Korean prospect for a fully democratic party system is highly uncertain.33

What gives hope for the near term is that as the institutions of democratization play out their roles, which may—democratically speaking—by some measures fall somewhat short of idealized operations, their functioning may well influence changes in the traditional attitudes that social scientists still find prevalent in the society. The evolution of institutional function can affect the expectations of the populace and their leaders for these institutions and the process itself and, indeed, the more fundamental values on which these institutions and processes rest. Thus, we may expect the gradual shift toward a deepening of the democratic process and the strengthening of the institutions on which it rests. It is significant that the government party had the first open nominating convention in South Korean history in July 1997, although it was not planned to be such. It may be a very positive model for future political conventions. Foreign Influences In the current period of heightened South Korean nationalism, it may seem ironic to discuss the potential role of foreign organizations and institutions on the political process in South Korea. Yet foreign attitudes and institutions do count for something in the South Korean political equation. The days when the imprimatur of the United States was important for perceived political legitimacy may be over, but residual attitudes related to foreign powers still affect the political process. It is no accident that the South Korean leaders still wish to have visits by U.S. presidents and other foreign heads of state and to have extensive press coverage of their White House visits.34 Conversely, political regimes in South Korea now must appear to stand up to what the South Korean press calls U.S. “demands.” It is significant, however, that attitudes are quite different when segmented by age, with the younger population (twenties to thirties) far more skeptical of the United States.35 It is also apparent that the specter of social chaos in South Korea in the 1987–1988 period before the Olympics, when the world’s attention was to be focused on South Korea, was an important factor that helped prompt the political liberalization of June 29, 1987. South Korean leaders effectively use foreign travel and visits by distinguished foreign dignitaries to increase their own political legitimacy at home, as well as to conduct foreign and economic policies.

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South Korea entered the OECD in late 1996. Since then, its policies have been subjected to much greater scrutiny. It will need to pay attention to criticism from this and other international organizations should restrictions on rights or other democratic procedures be evident. Most apparent is the field of labor, where the International Labour Organization (ILO) has already been strongly critical of South Korea’s policies. These organizations will support social change and the deepening of democracy as well. South Korea has succeeded in co-hosting with Japan the World Cup in 2002. Then the world will once again focus on South Korea, and the state will try to ensure that whatever warts remain on the body politic are small and benign, and, if possible, cosmetically obscured. This is not to say that foreign influences may not produce negative attitudes toward foreign intervention. In the wake of the financial collapse of 1997, there has been strong nationalist resentment of the International Monetary Fund (IMF) for what many South Koreans perceive as international imposition of excessively severe austerity measures. Resentment has also been apparent with regard to international pressure for trade liberalization, especially with regard to agricultural commodities. The United States has borne the burden of such criticisms (although other countries have benefited from the effects of these actions), but, significantly, Japan has been exceedingly cautious about pushing its entry into the South Korean market. The United States may be expected to take criticism even as its tacit approval of the process of democratization may be sought. This ambivalence toward the United States is not unusual and should be expected. It is a corollary to South Korea’s continuous expansion of its global economic role while relying on the United States for its security relationship. The influence of North Korea (if considered “foreign”) could continue to be important either positively or negatively. In the past, North Korean incursions into the DMZ seemed to swing votes toward the government, as people voted for stability to maintain the country’s remarkable economic gains.36 In the midst of economic crisis and hardship, economic issues have clearly become the paramount focus of people’s lives. However, there is little indication, either from public opinion surveys or political behavior, that South Koreans overall want to give up democratic governance in favor of authoritarian controls. In spite of the dire economic situation that has so heavily affected the state and the people, progress has been made toward solidifying democracy both as a principle and even in practice. The glass seems more than half

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democratically full, but obviously more is needed to quench a democrat’s thirst.

NOTES The views expressed in this chapter are solely those of the author and do not necessarily represent those of any institution. 1. These include an invasion by North Korea, a precipitous collapse of North Korea with a massive flow of refugees south, or a worldwide recession leading to a collapse of the international trading system, since exports in 1992 were 26.1 percent of gross national product (GNP), in contrast with 7.5 percent of GNP in the United States. Any of these scenarios could lead to a temporary military takeover to save the state, martial law, garrison command, or other restrictions on the political process and some loss of other freedoms for that period. 2. On June 29, 1987, in the face of massive and continuous popular demonstrations, the designated government-party candidate for the presidency, Roh Tae Woo, announced a sweeping political liberalization, including the direct election of the president, freedom of the press, fewer restrictions on human rights, and greater freedom for labor. This led to a revised constitution, the presidential elections of December 1987, his election as president, and the formation of the Sixth Republic. 3. For a discussion of these issues, see David I. Steinberg, “South Korea: Pluralizing Politics,” in Larry Diamond, Juan Linz, and Seymour Martin Lipset, eds., Politics in Developing Countries: Comparing Experiences with Democracy (Boulder: Lynne Rienner, 1995). 4. It may be argued that the elections throughout the early republican years, no matter how corrupt or manipulated, or perhaps because they were so patently inadequate, created expectations of far more fair polls and thus eventually contributed to positive change. 5. Doh Chull Shin and Kwang Woong Kim, in their paper “President Kim Young Sam’s Model to Consolidate Korean Democracy: Its Distinctive Features and Notable Consequences” (Midwest Political Science Association, April 1996), divide democratic consolidation into two features, each with two components: institutional (separated into the degree and quality of performance) and cultural (attachment to democracy and detachment from authoritarianism and particularism). 6. See David I. Steinberg, The Republic of Korea: Economic Transformation and Social Change (Boulder: Westview, 1989). 7. See the Korea Herald, March 6 and 9, 1996. 8. Korea Times, October 22, 1996. 9. Even today, the role of the chaebol in providing extensive public service funds through their foundations is sometimes interpreted as a means to acquire Confucian respectability. This phenomenon is true not only of Korea and not only of post-Confucian societies. 10. Korea Times, April 14, 1996. How many will actually be indicted and from which party are unclear at this writing. 11. The joke in Seoul is that the bride and groom at a wedding ceremony do not directly receive the money that all guests are expected to bring, but money is definitely given.

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12. For a study of the elections, see David I. Steinberg, “Korea: Triumph Amid Turmoil,” Journal of Democracy (April 1998). For a pre-election analysis of election issues, see the essays by Chaibong Hahm, Robert A. Scala pino, and David I. Steinberg in The 1997 Korean Presidential Elections (New York: Asia Society, “Asian Update,” November 1997). 13. Kim Byung-Kook, “A Journey Without a Vision: Politics of Democratic Consolidation in Korea,” paper presented at the National Endowment for Democracy Conference on Democracy, Washington, D.C., March 1996. One could argue that class solidarity never was allowed to develop under Japanese colonial rule, the U.S. military occupation, and all the republics. 14. It should be understood that the finite-infinite spectrum is an ideal construct, and no institution or individual should be considered to be completely at either end. The practical issue is this: it is more difficult for societies that view power as finite to engage in the dialogue, decentralization, delegation, and sharing of authority than one with different premises, but the place on the spectrum of an individual or institution is in constant flux. Thus, this point should not be interpreted to imply that any society or elements within it may not gradually change the premises and evolve into quite a different entity. 15. The classic study of this phenomenon in traditional societies is B. Anderson, “The Concept of Power in Javanese Culture,” in Claire Holt, ed., Culture and Politics in Indonesia (Ithaca: Cornell University Press, 1972). 16. Although the absence of parties with platforms on the left was a product of security laws, not ideological formulations. 17. See David I. Steinberg, “Human Rights and Civil Society in Korea: The Influence of Orthodoxy and Ideology,” Sasang (December 1996), Seoul (in Korean). 18. It is significant that mainstream Korean newspapers search for essential uniformity in reporting important news stories and do not wish to be regarded as different from the other major presses, whereas in the United States the search would be the reverse—to scoop the other presses and be considered as different and, thus, required reading. 19. In 1995, when the press pointed out that the president inadvertently violated a campaign law, the immediate response of a spokesperson for the Blue House was that the law should be changed, not that the president should stop. It is significant that former presidents Chun and Roh are now referred to in the Korean press without the normal honorifics that would be expected from their previous positions. 20. See the Far Eastern Economic Review editorial of April 4, 1996, for example. 21. Shin and Kim, “President Kim Young Sam’s Model.” 22. Park Won Soon, The National Security Law: Instrument of Political Repression in South Korea (Los Angeles: Korea Human Rights Network, 1993). Cited in David I. Steinberg, “The Republic of Korea—Human Rights, Residual Wrongs, New Initiatives,” Asian Perspective (December 1996), Seoul. 23. For a study of civil society, see Su-Hoon Lee, “Transitional Politics of Korea, 1987–1992: Activation of Civil Society,” Pacific Affairs 66, no. 3 (1993): 251–367. 24. David I. Steinberg, “The Media: A Major Actor in Civil Society?” Paper presented to the conference “Foreigners’ Perspectives on Korean Society,” Seoul, June 15, 1996.

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25. About 54 percent of those polled believed that local provincial or county assemblies were not absolutely needed at this time. Shin and Kim, “President Kim Young Sam’s Model.” 26. In 1994, 72 percent of those polled said all political parties were essentially the same, and 69 percent said that the parties served the interests of their leaders. Doh C. Shin, quoted in Steinberg, “South Korea: Pluralizing Politics,” p. 413. 27. The government heavily subsidizes the producer paddy prices paid to farmers for their crop at four to five times the world market price and also subsidizes the urban consumers’ price through the Grain Management Fund. In November 1996, the legislative debate (before the presidential elections of 1997) was between the government, which determined that a 3 percent increase was all it could afford in light of the economic downturn and the current account deficit, and the opposition, which wanted about 8 percent. 28. Doh Chull Shin, “The Democratization of Korean Politics and Culture in Progress and Repose: Public Opinion Survey Findings, 1988–94,” paper presented at the Korean International Studies Association conference, July 1995. 29. Ibid. 30. Doh Chull Shin and Richard Rose, “Responding to Economic Crisis: The 1998 New Korea Barometer Survey,” Studies in Public Policy 311, University of Strathclyde Center for the Study of Public Policy, Glasgow, 1998. 31. This commitment varies by education and gender: 37.3 percent of males are so committed, compared to 27.3 percent of females. Collegeeducated interviewees were 47.6 percent committed, compared to 17.5 percent of those with an elementary education, 23.6 percent of those with a middle school diploma, and 30.4 percent for those with a high school diploma. Doh C. Shin, “The Mass Public and Democratic Consolidation in Korea,” paper for the American Political Science Association, September 1994. 32. See Korea Times, David Steinberg’s “Stone Mirror” column, September 3, 1996. 33. Doh C. Shin, “Political Parties and Democratization in Korea: The Mass Public and the Democratic Consolidation of Political Parties,” paper presented to the International Political Science Association, Berlin 1994. See also Sung Chul Yang, The North and South Korean Political Systems: A Comparative Analysis (Boulder: Westview, 1994). Compare the 1967 comment, “There were no parties which shared concrete policies and platforms from choice. Rather, the personal background, consanguinial regional connections of individual candidates played a vital role in all campaigns.” Kim Kyu-taik, cited in David I. Steinberg, “The Republic of Korea: Pluralizing Politics,” p. 411. 34. Even in 1996, should the United States have publicly criticized a Korean regime, this would have probably undercut the political credibility of that government in the eyes of the older portions of the population. The United States can also unintentionally destabilize regimes. The excessive U.S. economic reform demands on the Chang Myon government in 1960– 1961, after Rhee Syng Man’s economic obstinacy, and Chang Myun’s inability to meet such demands and popular aspirations at the same time, contributed to its overthrow by the military. See David H. Satterwhite, “The Politics of Economic Development: Coup, State, and the Republic of Korea’s

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First Five-Year Economic Development Plan (1962–1966),” Ph.D. diss., University of Washington, 1994, pp. 328–329. 35. The Joongang Ilbo survey found that the United States was regarded as friendly by 72.2 percent of the older group (fifties to sixties) but only one-third of the younger group. Similarly, only 4.2 percent of the older group regarded the United States as hostile, whereas only 16.7 percent of the younger group trusted it. In another survey (National Strategy, August 1995, translated in Korea Focus, July–August 1995), 21.5 percent of the younger population, compared to 9.2 percent of the older population, believed the United States was hostile to Korea. 36. Personal communication with Ahn Chung-si, Seoul National University, on the results of polls taken before and after the North Korean incidents.

The Contributors

Larry Diamond is senior research fellow at the Hoover Institution, coeditor of the Journal of Democracy, and codirector of the International Forum for Democratic Studies of the National Endowment for Democracy. He is the author of Developing Democracy: Toward Consolidation and Promoting Democracy in the 1990s. Among his recent edited books are Democracy in East Asia and Democratization in Africa (both with Marc F. Plattner), The Self-Restraining State: Power and Accountability in New Democracies (with Andreas Schedler and Marc F. Plattner), and Consolidating the Third Wave Democracies (with Marc F. Plattner, Yun-han Chu, and Hung-mao Tien). Hyug Baeg Im is associate professor of political science at Korea University and a member of the Presidential Commission on Policy Planning. He is the author of Market, the State and Democracy: Korean Democratic Transition and Theories of Political Economy (1994, in Korean). His recent publications include “Democracy and Capitalism: The Best Possible Partners?” “Politics of Democratic Transition from Authoritarian Rule in South Korea,” “Globalization and Democratization: Boon Companions or Strange Bedfellows?” and “From Affiliation to Association: The Challenge of Democratic Consolidation in Korean Industrial Relations.” Byung-Kook Kim is professor of political science at Korea University, where he teaches party politics, methodology, and international political economy. His major publications include Dynamics of National Division and Revolution: The Political Economy of Korea and Mexico; State, Region, and the International System: Change and Continuity; 239

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CONTRIBUTORS

and Korean Politics. Kim received an award for Distinguished Publication on Liberal Democracy and Market Economy by the Federation of Korean Industries in 1995 and was decorated with the National Medal of Dongbaekjang in 1998. Song-min Kim is currently a visiting research fellow at the Institute for Korean Unification Studies, Yonsei University. He also served as a visiting research professor at the Institute of East-West Studies, Yonsei University. He has recently published The Politics of the TwoLevel Game: U.S.-Korea Agricultural Trade Negotiations and several scholarly articles on the political economy of South Korea and East Asia. Hyun-Chin Lim is professor of sociology and international studies at Seoul National University. Formerly, he was director of the Institute for Social Development and Policy Research at Seoul National University and worked as an adjunct editorial writer for Korea Daily. He is an editor of the Korean Social Science Journal and a member of the editorial board of Contemporary Sociology (published by American Sociological Association). He has widely written about dependency, development, and democracy in East Asia and Latin America from a comparative perspective and is currently working on the IMF’s structural adjustment programs in Korea and Mexico. Among his authored books are Dependent Development in Korea, Modern Korea and Dependency Theory, The Third World Development, and Korean Development in a Global Age. Chung-in Moon is professor of political science at Yonsei University. Prior to joining the faculty of Yonsei University, he taught at the University of Kentucky, Williams College, and the University of California at San Diego. He has published fifteen books and over 140 articles in edited volumes and such scholarly journals as World Politics, International Studies Quarterly, World Development, and Journal of Democracy. His most recent publications include Democracy and the Korean Economy (edited with Jongryn Mo) and The Kim Dae Jung Government and Sunshine Policy (with David Steinberg). Kyoung-Ryung Seong is associate professor of sociology at Hallym University and a member of the Presidential Commission on Policy Planning. He is the author of Political Sociology of Regime Changes and On Reforming the National States. His recent articles and book chapters include “Delayed Decentralization and Incomplete Consolidation of

CONTRIBUTORS

241

Democracy: The Case of Korean Local Autonomy,” “Massive Unemployment and Social Disorganization: A New Face of High Risk Society,” and “A Federalist Approach to Inter-Regional Cooperation and National Reunification of Korea.” David Steinberg is director of Asian studies, Georgetown University, and Senior Consultant to the Asia Foundation. He previously was representative of the Asia Foundation in South Korea, Distinguished Professor of South Korean Studies at Georgetown University, president of the Mansfield Center of Pacific Affairs, and a member of the Senior Foreign Service, Agency for International Development, Department of State. He is the author of many works on South Korea, Burma, and development in Asia, including The Republic of South Korea: Transformation and Social Change and The Future of Burma: Crisis and Choice in Myanmar.

Index

Accountability, 23; chaebol, 161–162; delegative democracy and, 34–35; of military, 54–56; vertical and horizontal, 51(n50) Activism, 88–91 Agricultural sector, industrialization of, 75–78 Authoritarianism, 2, 70; civil society and, 87–89; democratic transition patterns of, 23–26; economic performance under, 140–146; economic policy of regimes, 139; interest groups, 96; labor and, 111–115; labor under Park and Chun, 115–117; public attitude toward, 231; state corporatism, 119–120; statesupported interest associations, 107(n16); Yushin Constitution, 74–75 Authoritarian prosperity, 141 Autonomy: of global firms, 40–42; of local governments, 104–105, 223; as a result of authoritarianism, 139 Baek Ki Wan, 112 Bank for International Settlement (BIS), 160 BIS. See Bank for International Settlement Bossism. See Party bossism

BPB. See Budget and Planning Bureau Buddhism, 66–67 Budget and Planning Bureau (BPB), 164 Burma, 207 Campaign issues, 175–176, 176(table); age, 183; campaign funds, 236(n19); coalitions and betrayals, 189–192; party mergers, morality, and mudslinging, 183–189; party roles, 237(n33); public support for presidential candidates, 177(fig.) CCEJ. See Citizens’ Coalition for Economic Justice CCPDS. See Citizens’ Coalition for Participatory Democratic Society Central Association of Farmers’ Cooperatives, 94, 96 Central Election Management Committee, 210 Chaebol (family-controlled conglomerates), 16, 45, 132; bankruptcies among, 148, 153; corruption, 218; economic crisis and reform, 160–163, 166–167, 176–178; enhancing competitiveness, 152–153; government affiliations, 207–209; KCTU and, 124; labor organization, 123; labor 243

244

INDEX

reform, 125–126, 129, 134; media involvement, 221; power and status, 213; public service funds, 235(n9); state monism and, 120– 122; union involvement, 112, 126 Chaeya dissidents, 112, 117, 122–124, 135(n1) Chang Myon, 73 Chile, 31 Choi Kyu-ha, 217 Cho Soon, 176, 186–192, 222 Christianity, 66–67 Chun Doo Hwan, 2, 59, 89; arrest and trial, 31–32, 184, 216; corruption, 209–210; demise of regime, 24–25; Democratic Justice Party, 180; economic performance under, 144(table), 145; fate of, 217; military involvement, 54–56, 206–207; pardoning of, 187; regional party support, 226; response to economic crisis, 121; social power structure, 116; state corporatism, 107(n16); structural reforms, 162 Chung Tae Soo, 132 Citizens’ Coalition for Economic Justice (CCEJ): committee democracy, 96; corruption control, 93–94; expansion of, 91; hierarchy, 108(n18); influence and control, 106(n9); loss of leadership, 108(n23); membership patterns of, 101, 102(fig.) Citizens’ Coalition for Participatory Democratic Society (CCPDS), 94, 107(n14) Civil rights, 23, 53–56 Civil society, 18, 21; consolidation and, 13–15, 51(n62); control of military, 31–32; corruption, 216–218; democratic institutions and, 203–205; democratization and, 87–89, 108(n17); effect of social norms on economic performance, 143; evolution of, 89; expansiveness of, 106(n7); founding of civic organizations, 90(fig.); in government leadership, 206; growth and

strength of, 95–98; human rights, 220–221; institutional and mobilizational, 37–38; internal weaknesses, 98–102; membership patterns of CCEJ, 102(fig.); need for development of, 36–38; obstacles to consolidation, 104; organization of, 68–69; post–1987 growth and organization, 90–95, 106(n9); power and status of, 213–214; relationship with economy, 105(n1); social welfare, 38–40; special interest groups, 92; state corporatism, 120; strengths and weaknesses, 102–105; support of economic reform, 163–165 Class system, 7, 212; class solidarity, 236(n13); irrelevance of in party politics, 67–69; labor’s dilemma during economic crisis, 114; urban-rural gap, 74–76 Coalition building, 98, 179–183, 197–198 Coalitions, 58–59, 79, 109(n27); DJT coalition, 182; DP-NKP coalition, 189–192; NCNP/ULD merger, 59, 164; party mergers, 57(fig.); party mergers during 1997 campaign, 186–192 Confucianism, 29–30, 50(n35); anthropocentric familism, 7, 10, 63–67, 79; as cause of turmoil, 62–63; concentric circles of selfidentity, 65(fig.); conflict with democracy, 49(n32), 50(n34); as political thought, 65–66; postConfucianism, 29–30; regionalism in party politics, 79; religious tolerance and, 49(n30); rhetoric of democracy, 71–72 Consolidation, democratic, 46; conceptualization of, 3–6; conditions for, 8–9, 22–23, 26–32, 45–47, 47(n7), 47(n9); democracy vs. developmentalism, 69–73; obstacles to, 32–43, 104; transition and, 47(n10); two features of, 235(n5) Constitutionalism, 35–36 Corporate sector, 129; bankruptcies, 171(n27); causality of economic

INDEX

crisis, 153; corporate performance, 152; economic collapse under Kim Young Sam, 147–150; labor reform negotiations, 130–131. See also Chaebol Corporatism, societal, 119(fig.), 133 Corporatism, state, 114; authoritarianism, 119–120; Chun Doo Hwan, 107(n16); civil society, 120; decline of, 94–95; interest intermediation, 119(fig.); Park Chung Hee, 107(n16); social welfare involvement, 108(n20) Corruption, 216–218; campaign funds, 235(n11), 236(n19); chaebol involvement, 208–210; corruption control measures, 93–94; election control, 222; political influence and the economic collapse, 154 “Crises of failure,” 23–24 “Crises of success,” 23–24, 69–73 Culture, political, 9 Daewoo, 161 Debt restructuring, 161, 167 Decentralization, 105 “Declaration for Democratization.” See June 29 declaration Democracy, 4, 53, 80(n2); civil society and, 87–89; commitment to, 47(n7), 47(n9); committed vs. superficial support, 19(n11); by committee, 96; delegative democracy, 19(n13), 34–35, 99–100; democratic changes, 169(n2); economic performance under democratic regimes, 140–143, 146, 156–158; future outlook of, 17–18; institutions of, 203–205; Korean perception of, 11, 70–71; labor militancy under, 122–124; low institutionalization of, 98; minimal and pluralistic institutionalization of, 19(n14); public attitude toward, 5–6, 19(n12), 230–231; as a result of economic development, 139; stability during economic crisis, 173–175; standards of measurement, 6–7; success of Kim Dae

245

Jung’s economic reforms, 162– 167; vs. developmentalism, 69–73 “Democracy with guarantees,” 25 Democratic Justice Party (DJP), 180, 184 Democratic Korea Party (DKP), 57(fig.) Democratic Liberal Party (DLP), 57(fig.), 58–59, 124, 215 Democratic Party (DP), 57(fig.), 58, 112, 189, 222 Democratic Republican Party (DRP), 57(fig.) Developmentalism, vs. democracy, 69–73 DJP. See Democratic Justice Party DKP. See Democratic Korea Party DLP. See Democratic Liberal Party Doxa (existence principle), 63 DP. See Democratic Party DRP. See Democratic Republican Party Economic crisis, 53, 147–150; business failures, 199(n1); causality relationships, 150–156; effect on democracy, 173–174; effect on small vendors, 113; Koreans’ perception of cause, 230; labor reform, 133; political impact, 227 Economic indicators, 118(table); Gini index of income distribution, 149; under Kim Young Sam, 148(table); trade specialization index, 150–151, 172(n32) Economic performance, 171(n19); economic indicators, 118(table), 148(table), 149–151, 172(n32); influencing democratization, 140–143; macro- vs. microeconomy, 147–148; by regime type, 143–150, 144(table), 168–169 Economic Planning Board, 179 Economic reform: under Chun, 145; as election issue, 175–179; under Kim Dae Jung, 158–162; policy swings under Roh, 146; “realname” financial transactions, 93, 156–157, 209, 216

246

INDEX

Economic regulation, 152, 159–160 Economy: 1997 collapse (See Economic crisis); crises of failure and success, 23–25; effect of North Korea on, 42–43; effect on democracy, 5; effect on stability, 1–2; ethnicity and, 27; export markets, 116–117; globalization, 40–42; inconsistent management under Kim, 154–155; labor strikes, 125–126; major economic indicators and wage trends, 118(table); organization of labor, 111–115; per capita GNP, 107(n10); politicization of, 170(n9); public attitude towards, 234; regional disparity, 109(n24); relationship to democracy, 14–16; relationship with civil society, 105(n1); research and development and technological innovations, 152, 172(n36); restructuring after collapse, 134; social welfare, 38–41, 96, 108(n20), 133; state monism, 117–122; structural reorganization of, 43–45; urbanrural gap, 74–75; wage gap, 127(table), 229 Elections, 2, 46, 109(n27), 235(n4); coalition building, 179–183; defeat of labor candidates, 112; as democracy indicator, 53–56; during economic crisis, 173–174; electoral competition, 12; electoral support for specific leaders, 61(table); factors affecting, 10–11; Koreans’ perception of electoral democracy, 70–71; lack of issues, 69; local governments, 193–194, 222–223, 237(n25); low institutionalization of, 32–34; maturing process of, 209–211; 1997 campaign, 175–179, 176(table); 1997 results, 190; prohibitions on labor involvement, 116; public support for presidential candidates, 177(fig.); radical social movement, 38; regionalism and, 99, 226; regional support in 1997

election, 184(table); role in consolidation, 22–23; South Korean perception of democracy and, 11; valid votes, 181(table); weakness of parties, 58–59 Environmental issues, 93(fig.), 106(n5), 107(n11) Ethics and values, 28–30. See also Confucianism; Religion Ethnicity, 10, 26–28, 28 Europe, Eastern, 46; delegative democracy, 19(n13); democratic transition patterns, 23–24 Export competitiveness, 150–153, 155–156 Export markets, 116–117, 227 Export promotion, 77, 121–122 Fair Trade Law, 161 Familism, anthropocentric, 10, 63–67, 79 FEB. See Finance and Economy Board Federation of Korean Trade Unions (FKTU): bipolar union representation, 124; formation of, 115–116; labor reform under Kim Dae Jung, 159; labor revolt, 111; organizational weakness, 128–130; state recognition of, 94; tripartite committee, 159 Finance and Economy Board (FEB), 174, 179 Financial sector: causality of economic crisis, 153; overborrowing and overlending, 44; reform under Kim Dae Jung, 159–160 Financial Supervisory Board (FSB), 164 Financial Supervisory Commission (FSP), 134, 159, 174 FKTU. See Federation of Korean Trade Unions Foreign investment, 165 Free market, as function of liberal democracy, 141 FSB. See Financial Supervisory Board FSP. See Financial Supervisory Commission

INDEX

“Generation change,” 180 Gini index of income distribution, 149 Globalization, economic, 40–42, 52(n68), 133–134 Glocalization, 40, 52(n68) GNP. See Grand National Party Government, local, 193–194, 222–223, 237(n25) Government, state: causality of 1997 economic crisis, 153–155; consolidation, 30–31; decline of corporatism, 94–95; economic reform, 166–167; farm subsidies, 237(n27); public preference in, 5–6; role in democracy, 228–229; social welfare and, 39–40; statesociety relationship, 87–89; transition, 2 Grand National Party (GNP), 57(fig.), 163–164, 167 Hanahoe (military officer group), 31–32, 206–207 Hanbo Steel, 132, 153–154, 218 Hannara. See Grand National Party Han Sung-joo, 205 Human rights, 205, 220–221 Hyundai Group, 125, 161, 208 ILO. See International Labour Organization Im Chang Yol, 173 IMF. See International Monetary Fund IMI. See International Management Institute Income distribution, 149, 226–227 Indonesia, 207 Industrial integration, 121–122 Industrialization of rural population, 75–78 Information revolution, 41 Institutions, democratic, 203–205; changes under democracy, 232–233; civil society, 220–221; corruption in, 216–217; development of, 229–230; electoral system, 209–211; judiciary, 218–220; low level of institutionalization, 32–35; media,

247

221–222; political parties, 224; public attitudes toward, 230–231; weakness of, 9–11 Interest groups, 92, 102, 106(n9), 107(n16); effect on economic performance, 142; internal democratization, 96–97; organization of, 91 Interest intermediation: models of, 117–119, 119(fig.); state monism, 117–122, 136(n9) International community: effect on Korean politics, 237(n34); foreign investment, 44; influence on political process, 233–234; pressure for economic reform, 165 International Labour Organization (ILO), 127, 234 International Management Institute (IMI), 150 International Monetary Fund (IMF), 44–45, 147–148, 173–174, 234 Japanese colonialism, 76 Jin Nyum, 130 Judiciary, 218–220 June 29 declaration, 89–90, 235(n2) Justice Party (JP), 57(fig.) Kang Kyong Sik, 178 Kang Sam Jae, 131 KCIA. See Korean Central Intelligence Agency KCTU. See Korean Confederation of Trade Unions KDP. See Korea Democratic Party KFB. See Korean Federation of Businesses KFI. See Korean Federation of Industries Kia Corporation, 155, 178 Kim Chi Ha, 123 Kim Dae Jung, 10, 14; campaign stance, 178; civil leaders in government, 97; corruption, 217–218; democratic reforms, 205; DP-NKP coalition, 189–192; economic crisis, 174–175; economic restructuring, 45; election of, 32, 58–59; IMF bailout, 44; 1997 election results,

248

INDEX

190; party bossism, 33; party mergers during 1997 campaign, 186–189; party politics, 60; protesting Kim Young Sam’s labor reform, 131–132; reforms under, 131, 134, 158–167, 211; regionalism, 79, 180–183, 225; restructuring after economic collapse, 134; salvaging labor laws, 133; ULD coaltion, 229; urban-rural regionalism, 75 Kim Hyun Chol, 132, 154 Kim Jong Pil, 10, 183; corruption, 218; DLP formation, 58–59; labor reform, 131; 1997 election results, 190; party bossism, 33; post–election power struggles, 193, 215; protesting Kim Young Sam’s labor reform, 132; regionalism, 192; regional party support, 226; salvaging labor laws, 133; ULD formation, 180, 182; urban-rural regionalism, 75 Kim Son Hong, 178–179 Kim Young Sam, 215; campaign against, 183–186; campaign donations, 211; civil leaders in government, 97–98; civil society and, 14; coalitions, 60; coalition with Lee Hoi Chang, 185; conspiracy against Lee Hoi Chang, 200(n26); corruption, 217; delegative democracy, 34, 100; DLP formation, 58–59; economic crisis, 179; economic performance under, 144(table), 146–147, 148(table); election of, 2; human rights, 205; ignorance of economic policy, 154; IMF bailout, 44; military and, 26, 31–32, 206–207; party bossism, 33; party coalitions, 183; party fluidity, 60, 79; political parties of, 224; quality of life under, 149–150; reform policies, 53–56, 93, 114–115, 127, 205–206; regional party support, 225–226; salvaging labor laws, 133; structural reforms, 162; urban-rural regionalism, 75 Kim Yun Hwan, 187, 200(n11)

Koh Kon, 193 Korea Asset Management Company, 160 Korea Democratic Party (KDP), 57(fig.) Korea First Bank, 160 Korean Central Intelligence Agency (KCIA), 115, 221 Korean Confederation of Trade Unions (KCTU), 124, 127–133, 159 Korean Federation of Businesses (KFB), 129–130 Korean Federation of Industries (KFI), 129–130 Korean Federation of Student Associations, 91 Korean War, 28, 67, 76 Kwon Young Gil, 112, 132 Kwon Young Hae, 131, 193 Labor, 38; bipolar union representation, 124; challenging authoritarianism, 111–115; divisions in civil society, 15; in electoral politics, 211; foreign criticism of policies, 234; industrial linkages through export promotion, 119–122; labor reform under Kim, 127–128; major economc indicators and wage trends, 118(table); under Park and Chun, 115–117; postIMF bailout reform, 158–159; post–1987 militancy, 122–124; state monism and, 117–120; three prohibitions system, 116, 127–128, 130; unionization and labor disputes, 113(fig.); wage gap, 127(table), 229 Latin America, 34; delegative democracy, 19(n13); democracy and economic performance, 141; democratic transition patterns, 23–24; disintegration of civic groups, 103–104 Law. See Judiciary Lee Chong Yeon, 175 Lee Hoi Chang, 10; conspiracy against, 200(n26); DP-NKP coalition, 189–192; 1997 election,

INDEX

174–178, 183–189, 200(n11); Kim Dae Jung’s economic reform, 163 Lee Hong Ku, 131, 185, 191 Lee Soo Sung, 185, 191, 200(n11) Lee Suk Chae, 131 LG Semiconductor, 161 Liberal democracy, 140–141 Liberal Party (LP), 57(fig.) Market authoritarian state, 24–25 Marxism, 67 Media, 236(n18); civic organizations and, 94; environmental issues, 93(fig.); growing independence of, 221–222; support of Kim Dae Jung, 175 Mergers: chaebol restructuring, 161–162; insolvent banks, 160; party mergers, 57(fig.), 59, 186–192 Military, 4, 206–207; civilian control of, 31–32, 54–56; civil society and, 95; disorganizing labor, 115; draft evasion, 175, 186; loss of power, 2; post-election coalitions, 60; role in transition, 25–26; temporary takeover scenario, 235(n1) Ministry of Finance (MOF), 155, 179 Ministry of Home Affairs, 222 Ministry of Labor (MOL), 114 Minjong’gye. See New Korea Party Mobilizational civil society, 37 Modernization, 53, 99 MOL. See Ministry of Labor Money politics, 183 Monism. See State monism Moon Jong Su, 131 Moralism, 179–186, 191–192, 198–199 NADP. See National Democratic Party National Assembly, 11, 175; assignment of seats, 193, 224–225; chaebol involvement, 208; civil leaders in, 97; labor candidates, 112 National Association for Democracy, 91 National Association of Business Owners, 94

249

National Center for New Spirit Movement, 107(n16) National Center for New Village Movement, 107(n16) National Coalition for Environmental Movements (NCEM), 91, 106(n9) National Congress for New Politics (NCNP): coalitions, 164, 182, 215; election results, 184; history of, 57(fig.), 59; Lee Hoi Chang and, 175, 186; National Assembly seats, 193 National Council of Trade Unions (NCTU), 123, 124 National Democratic Party (NADP), 57(fig.) Nationalism, 26–28 National Party (NP), 57(fig.) National Security Law, 220 NCEM. See National Coalition for Environmental Movements NCNP. See National Congress for New Politics NCTU. See National Council of Trade Unions NDP. See New Democratic Party NDRP. See New Democratic Republican Party Neoconservatism, 39 New Democratic Party (NDP), 57(fig.) New Democratic Republican Party (NDRP), 57(fig.) New Korea Democratic Party (NKDP), 57(fig.), 58, 79 New Korea Party (NKP): 1997 election, 175–176, 185, 191, 200(n11); history of, 57(fig.), 59; Kim Young Sam and, 189; labor reform under Park, 129; tripartite committee, 129. See also Lee Hoi Chang New Party for the People (NPP), 57(fig.), 177 New Village Movement, 164 NKDP. See New Korea Democratic Party NKP. See New Korea Party North Korea, 1, 42–43, 117, 211, 234 NP. See National Party

250

INDEX

NPP. See New Party for the People OECD. See Organization for Economic Cooperation and Development Organization for Economic Cooperation and Development (OECD), 127, 224, 234 Outside Auditor Law, 161 Pacts, foundational, 25–26 Park Chang Jong, 191 Park Chung Hee, 44, 89, 121; economic performance under, 144, 144(table); economic strategies, 74–75; fate of, 217; military involvement, 206–207; regional party support, 226; social power structure, 115–117; state corporatism, 107(n16) Park Se Il, 127–128 Park Tae Joon, 182, 192 Parliamentarianism, 35, 215 Party bossism: decay of party politics, 78; as obstacle to democracy, 33, 99, 100–101; political reform and, 198–199 Party politics: civil society involvement in, 97; developmentalism and, 69–73; 1997 election, 10–11, 175–176; electoral democracy under Kim Young Sam, 53–56; establishment of civilian rule, 53–56; fluidity of parties, 56–61; function of, 224; history of parties, 57(fig.); importance of coalition building, 197–199; institutional shallowness of, 134; irrelevance of religion and class, 66–69; lack of ideological basis, 72–73; low institutionalization of, 32–34; obstacles to development of, 78; party mergers, 57(fig.), 186–192; political culture, 62–66; postelection power struggles, 193; public attitudes toward, 225, 237(n26); regionalism, 78–80, 225–226; urban-rural gap, 73–78 Party system, 224–225; autocratic nature of, 232–233; regionalism, 99

Peace Democratic Party (PDP), 57(fig.), 58–59, 79 People’s Party (PP), 57(fig.), 112– 113 Pluralism, 119, 119(fig.), 203–204 Pohang Iron and Steel Company (POSCO), 125–126 Poland, 26 Political society, 32–35, 56–61. See also Party politics POSCO. See Pohang Iron and Steel Company Post-Confucianism, 29–30 Power: assigning National Assembly seats, 224–225; attitudes toward, 229–231; chaebol, 208; in Confucian terms, 72; control of local governments, 222–224; corruption, 216–218; delegative presidency and, 34–35; effect of democratization, 228–229; finite-infinite construct of, 212–214, 236(n14); interest intermediation, 119(fig.); interest politics and, 136(n9); of Kim Dae Jung, 164, 167; Korean concept of, 12–13; military, 207; post-election struggle for, 193–194; transfer during economic crisis, 173–174 PP. See People’s Party Presidency: autocratic tendency of, 214–215; electoral support for specific leaders, 61(table); fates of various presidents, 217; party politics, 59–60 Presidentialism, 35–36 Public: alienation of labor militants, 123–124; attitudes toward democracy, 230; desire for moral reform, 190–192; dissatisfaction with economic policy, 155; 1997 election campaign, 175–176; loss of support for Kim Young Sam, 132; satisfaction with democracy, 19(n12); support for democracy, 5–6; support for Lee Hoi Chang, 185; support for presidential candidates, 177(fig.); support of Kim Dae Jung’s economic reforms, 163–164; weakening of labor power, 115–117

INDEX

Quality of life, 149 Radical organizations, 91–93 “Real-name” financial transactions, 93, 156–157, 209, 216 Reform, banking, 159–160 Reform, economic. See Economic reform Reform, labor: under Kim Dae Jung, 133–134, 158–159; under Kim Young Sam, 114–115; tripartite committee, 127–130, 159, 165– 166 Reform, moral, 183–186 Reform, political, 74 Reform, structural, 205–206; civil involvement, 98; politics of, 197–198; reorganization of civil society after 1987, 90–95 Regionalism, 79, 225–226; DP-NKP coalition, 189–192; as obstacle to democracy, 98–102, 105; party mergers, 187; power politics, 179–186; provincial elections, 193–194; reaction against, 183; urban-rural gap, 73–78 Religion, 7, 49(n25), 212; irrelevance of in party politics, 66–69; religious tolerance, 28–30, 49(n30). See also Confucianism Research and development, 150–151, 172(n36) Rhee In Jae, 10, 192; 1997 election campaign, 176–178, 185–189; labor disputes, 125; result of DP-NKP coalition, 190 Rhee Syng Man, 73, 89, 217 Roh Tae Woo: arrest and trial, 31–32, 184, 216; coalitions, 60; corruption, 209, 210, 217; DLP formation, 58–59; economic performance under, 144(table), 146, 171(n22); 1987 election result, 34; fate of, 217; institution of elections, 2, 25, 235(n2); military involvement, 206–207; pardoning of, 187; regional party support, 226; structural reforms, 124–125, 162 Russia, 103

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Samkeum (three prohibitions), 116, 127–128, 130 Samsung Group, 155, 161, 172(n36), 178 Seoul Bank, 160 Shamanism, 28–29, 66–67, 71 Singapore, 142 Societal corporatism, 133 Society. See Civil society; Political society South Korea Association of Civic Organizations, 91 Sovereignty: Confucianism and the individual, 64–65; globalization and loss of, 41 Spain, 24 Stability, political, 1–3, 5–6 State monism, 117–122, 136(n9) Structural reorganization, 43–44 Student protest, 91, 92, 232 Taiwan, 24, 142 Technological innovation, 151–152 Thailand, 207 Three prohibitions, system of. See Samkeum Trade specialization index, 150–151, 172(n32) Transition, democratic: consolidation and, 47(n10); influence of civil society, 89–90; military role in, 25–26; mode of, 23–26; by pact and transaction, 25; patterns in authoritarian regimes, 23–26; regionalism, 99; social organizations, 24; urbanrural issues, 75–78 “Transition through transaction,” 25 “Transplacement,” 25 Tripartite committee, 127–130, 159, 165–166 UDP. See Unification Democratic Party ULD. See United Liberal Democrats Unification, with North Korea, 42–43, 91, 211 Unification Democratic Party (UDP), 57(fig.), 79, 187 Unions, 15, 92, 111, 114; bipolar union representation, 124;

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INDEX

challenges of labor reform, 128; dissolution under Park and Chun, 115–117; negotiation for multiple unions, 128–131; organizational weakness, 128–129; post–1987 militancy, 122–124; reform negotiations under Kim Dae Jung, 159; unionization and labor disputes, 113(fig.), 125–126 United Liberal Democrats (ULD): DJT coalition, 182; economic reform, 164; election results, 184; formation of, 59, 180; history of, 57(fig.); local elections, 222; moral issues during campaign, 186; partisan realignments, 193 United States: influence on Korean politics, 233, 237(n34); Koreans’ attitude toward, 238(n35); as strong ideal, 62 Urbanization, of politics, 76– 78

Urban-rural gap, 11–12, 73–78, 227 Volunteerism, 96 Vulnerability, external, 42–43 Wage gap, 127(table), 229 War of movement, 8–9, 37 War of position, 9, 37 WEF. See World Economic Forum Welfare, social, 38–41, 96, 108(n20), 133 World Economic Forum (WEF), 150 Young Men’s Christian Association (YMCA), 105 Young Women’s Christian Association (YWCA), 105 Yun Po-sun, 217 Yushin Constitution, 74–75 Yushin period, 144 Zaire, 143

About the Book

Since its inception in 1987, Korean democracy has been an arena of continual drama and baffling contradictions: periodic waves of societal mobilization and disenchantment; initial continuity in political leadership followed by the successive election to the presidency of two former opposition leaders and the arrest of two former heads of state; a constant stream of party renamings and realignments; an extended period of economic success and then a breathtaking economic collapse; and a persistent quest for political reform within a political culture focused not on institutions but on power and personal relationships. This book sheds light on the dilemmas, tensions, and contradictions arising from democratic consolidation in Korea. The authors explore the turbulent features of Korean democracy in its first decade, assess the progress that has been made, and identify the key social, cultural, and political obstacles to effective and stable democratic governance. Larry Diamond is senior research fellow at the Hoover Institution and codirector of the National Endowment for Democracy’s International Forum for Democratic Studies. His most recent book is Developing Democracy: Toward Consolidation. Byung-Kook Kim is professor of political science at Korea University and a former member of the Presidential Commission on Policy Planning. His major publications include Dynamics of National Division and Revolution: The Political Economy of Korea and Mexico; State, Region, and the International System: Change and Continuity; and Korean Politics.

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