Transforming Korean Politics: Democracy, Reform, and Culture 0765614278, 0765614286, 9780765614285, 9780765614278

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Transforming Korean Politics

The editor and publisher of this volume gratefully acknowledge the generous support of the Korea Foundation. The opinions, findings, and conclusions or recommendations expressed in this publication are those of the authors and do not necessarily reflect the views of the Korea Foundation.

Transforming Korean Politics Democracy, Reform, and Culture

Young Whan Kihl

An East Gate Book ROUTLEDGE

Routledge Taylor & Francis Group

LONDON AND NEW YORK

First published 2005 by M.E. Sharpe Published 2015 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business

Copyright © 2005 Taylor & Francis. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Notices No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use of operation of any methods, products, instructions or ideas contained in the material herein. Practitioners and researchers must always rely on their own experience and knowledge in evaluating and using any information, methods, compounds, or experiments described herein. In using such information or methods they should be mindful of their own safety and the safety of others, including parties for whom they have a professional responsibility. Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

Library of Congress Cataloging-in-Publication Data K.ihl, Young W., 1932Transforming Korean politics : democracy, reform, and culture I Young Whan K.ihl. p.cm. Includes bibliographical references and index. ISBN 0-7656-1427-8 (cloth: alk. paper) ISBN 0-7656-1428-6 (pbk.: alk. paper) 1. Democratization-Korea·csouth)-History. 2. Korea (South)-Politics and government-1960-1988. 3. Korea (South)-Politics and government-1988- 4. Korea (South)Economic po1icy-1960- I. Title. JQ1725 .K9 2004 320.95195-dc22

20003021030

ISBN 13: 9780765614285 (pbk) ISBN 13: 9780765614278 (hbk)

Contents List of Tables and Figures Preface

IX

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1. Introduction: Ideas Matter in Korean Politics

Interplay of Ideas, Values, and Policy in the Era of Transition The Impact of Ideas on Policy: Modernization, Democratization, and Globalization From Tradition to Modernity: Sequence and Trajectories Conceptual Frame and Theoretical Baseline Conclusion

3 4 17 25 27 33

Part 1. Historical Context 2. Taking Culture Seriously: Confucian Tradition and Modernization The Cultural Legacy of Confucianism Political Doctrines and Practice of Korean Confucianism Modernization, Authoritarianism, and Democracy Paths to Modernization and Development Confucianism, Democracy, and Reformism Conclusion 3. Democratization by Launching the Sixth Republic of Korea (ROK) Democracy Movement and Democratic Transition Modernization Ideas Inspire Soldiers-Turned-Politicians Constitutional Crises of the Developmental State Democratic Opening and Political Change of 1987 Analyzing the Political Economy of Democratization Conclusion 4. "Reform Halfway Down?" Cultural Dimension of Democratic Consolidation Reforming Post-Confucian Society The Challenges of Democratic Consolidation via Reform Successive Waves of Democratic Reform: Positive or Negative Consolidation? The Rule of Law and the Court Trial of Former Presidents Structure, Culture, and Failed Reform Conclusion

39 41 44 49 54 56 59 62 63 70 75 82 88 99 102 104 106 109 128 133 142 v

vi

Part 2. Policy Patterns and Processes 5. Responses to Globalization: Sustaining Democracy Through Economic Reform Globalization Drive: Advanced-Nation Status or Disease? Effects of the 1997-1998 Asian Financial Crisis Is Globalization a Threat or an Opportunity? Negotiating Globalization Impacts: Clashing Styles and Approaches Globalization and Democratization in the Two Administrations Conclusion

149 151 157 161 163 170 180

6. Global Political Economy and the Korean State The Unraveling of Korea's Miracle Economy: East Asian Miracle Revisited Economic Crisis, Recovery, and Restructuring The Logic of a Competitive State in the IMF Era The Politics of Gridlock and Collective Action Conclusion

185 192 207 214 225

7. Foreign Policy and Democracy: From Nordpolitik to Engagement Constructing Foreign Policy in Democracy: Ideas and Interests Nordpolitik (or Northern Policy) and Democratization Engagement (or the Sunshine Policy) Toward North Korea External Impact of Engagement on Major Powers Conclusion: "Democratic Peace" and Korea's Future

228 229 240 248 255 260

183

Part 3. Future Prospects 8. New Democracy for Korean Society and Politics The Rise and Role of Civil Society for Democracy Korean Electoral Democracy in Action Assessing Institutional Change and Administrative Performance: The Policy Challenges and Leadership Responses Launching the Roh Moo-Hyun Presidency: Problems and Prospects Conclusion

289 297 305

9. Transforming Korean Politics? Conclusion Drawing Lessons from the Korean Experiment The "Asian Values" Discourse and Korean Culture Confronting Korea's Uncertain Security Future Conclusion: Security Dilemma and Democratic Rebirth?

308 311 319 325 337

269 271 278

vii

Transforming Electoral Politics Through Presidential Impeachment: An Epilogue What Happened? Why? Meaning and Significance of the Election What Lies Ahead? Future Prospects

343 343 345 348

Postscript

351

Notes Bibliography Index

353 369 391

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List of Tables and Figures Tables

1.1 The Role of Ideas and Policy Impact on Each of the Sixth ROK Administrations (1988-2008) 1.2 Institutional Basis of Electoral Cycles in the Sixth ROK (1988-2008) 1.3 Parliamentary Electoral Outcome and Party Strength in the Sixth ROK (1988-2008) 2.1 The Cultural Mores and Legacies of Confucianism 3.1 Korean Economic Performance, 1983-1987: Select Indicators 3.2 Korean Economic Performance, 1988-1992: Select Indicators 4.1 Korean Economic Performance, 1993-1997: Select Indicators 6.1 Korean Economic Recovery, 1998-2002: Select Indicators 9.1 Idea Types and Pathways

13 15 16 46 81 95 127 194 309

Figures

1.1 1.2 3.1 4.1

Interplay of Ideas, Values, and Culture on Policy Reconciling Ideas in the Korean State Interaction of Key Actors During the 1987 Political Change A Political Situation of Launching Reform Measures, 1995-1996 5.1 Constraints of the Nested Game Situation and IMF Conditionality in South Korea in 1998

10 12 86 137 171

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Preface This book offers an analysis of the themes that have been transforming Korean society and politics since the 1987 democratic opening. Transforming Korean Politics is admittedly ambitious as an enterprise, and ambiguous as a book title, because the endpoint-transformation--can never be attained with certainty. After a successful political transition away from authoritarian politics toward a new era of liberal democracy, South Korea's next challenge lies in consolidating its democratic gains and building durable political institutions. This will require full compliance with democratic norms by all of the major political forces and interest groups in civil society. This ongoing quest for democracy has not been easy for South Korea's Sixth Republic. This volume, the product of a decade-long study of South Korean politics and economics, is a follow up to my 1984 book, Politics and Policies in Divided Korea. The "regimes in contest" that characterized the political developments in divided Korea during the Cold War era in global politics have failed to bring about a system wide transformation to a newly integrated and reunified Korea. Both Koreas were victims of the global rivalry and ideological conflict between socialism and capitalism in Korea, as in East Asia, in the post-World War II era (Kihl1984: 231246). Instead of writing a sequel to my earlier book, as many have urged me to do, I have chosen to write only about the political process and dynamics of South Korea's democratic transition and institution-building in the present volume. This book begins with the question of how "ideas matter" in shaping the policy agenda of South Korean politics, and the ways in which democratic reform programs came to be influenced by Confucian cultural norms and values. The book delves into the political process and dynamic interplay of factors and forces that have shaped the emergence of four successive administrations in South Korea's Sixth Republic, from 1988 to 2004: those ofRoh Tae-Woo, Kim Young-Sam, Kim Dae-Jung, and Roh Moo-Hyun. I argue that the interplay of democracy, reform, and culture constituted the leitmotif of South Korean politics in the age of democratic consolidation. The democratic institution-building was by no means smooth or successful because these difficult undertakings were subject to two types of constraints. The first involved internal clashes over inherited values and acquired norms (Asian values versus the Western notion of transparency, for instance) as manifested by the rampant practice of"crony" capitalism and corruption scandals involving close family members and associates of the president. The second was a factor of externalities associated with South Korean politics, such as the Asian financial crises of 1997XI

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98 and the nuclear standoff between the United States and the DPRK (Democratic People's Republic of Korea, or North Korea). The book proceeds to examine the ways in which the new democracy has taken hold of South Korean society and politics, as shown by the 2002 double elections of local and presidential candidates with electoral campaigns involving political parties and interest groups. Will democracy endure in South Korean politics? I believe democracy will endure in South Korea when and if elections are perceived by the public, including civil society groups and individual voters, to be "fair and effective," and if the capitalist market economy continues to generate prosperity and wealth and to benefit society at large. Because of the complexities involved in managing the political and economic crises, South Korean society has in recent history struggled with the tasks of institution-building and establishing a "rule-of-law" tradition (S.S. Kim 2003: 38-44). In March 2004 South Korea's embattled President Rob Moo-Hyun was, for instance, subject to an unprecedented impeachment motion by the opposition-dominated National Assembly on the eve of the seventeenth general election on Aprill5, 2004. This political crisis in South Korea has led to the polarization of public opinion between anti-Rob conservatives and pro-reform liberal forces within civil society. A detailed account and analysis of the 2004 electoral politics is addressed in an epilogue to this book. It also examines the question of whether and how South Korea's new democracy will be able to consolidate itself in the remainder of2004, in light of the political controversy over President Rob Moo-Hyun's impeachment and the outcome of the seventeenth National Assembly election of April 15, 2004. Suffice it to say here that whereas the secondary opposition Millennium Democratic Party (MDP) in the National Assembly moved first and was later joined by the main opposition Grand National Party (GNP) to impeach the president, the impeachment measure was not well received by the media and civil society groups. They argued that an outgoing parliament should not have acted to impeach a president who had been elected by the direct and popular vote. During the weeks following the impeachment decision, various polls indicated support of Rob by an overwhelming three-to-one ratio. According to election law, the official campaign for parliamentary elections is allowed to run for only two weeks prior to the election date. Acting President Gob Kun announced that all the civil servants would maintain strict neutrality and impartiality during the forthcoming election. This was somewhat in contrast to the public stance of ousted President Rob, who argued that realignment of political forces was necessary in order to carry out his electoral promises and the mandate he had for reforming political institutions. This is why the Uri (Open and Participatory) Party that he had openly supported needed to win big in the upcoming seventeenth National Assembly election. This latest saga of presidential impeachment indicates more than a failure of political leadership, however. It is a reflection of deeper structural problems in

PREFACE

xiii

Korea's new democracy. It offers a dramatic demonstration of the problems of divided government. A government with both a popularly elected president and a popularly elected parliament requires close cooperation between the two branches of government in order to prevent a stalemate in conducting the business of government. Roh's penchant for taking a "principled stance" on the political reform agenda, reinforced by his high-risk style of confrontational politics instead of dispute settlement through give-and-take, has also contributed to the latest political impasse between the executive and legislative branches of government. Nevertheless, so long as the competing interests work within the institutional framework, democracy will be able to weather this latest storm and potentially emerge even stronger in South Korea. The domestic political upheaval associated with the presidential impeachment has also injected additional complexities in addressing the ongoing stalemate with North Korea. Nevertheless, among Goh Kun's first presidential duties was the convening of a meeting of foreign affairs and security-related ministers. "All politics are local," including South Korea's government transition as well as the politics of North Korea's nuclear standoff and the Six-Party Beijing Talks on North Korea held in August 2003 and February 2004. The impeachment of ROK president Roh Moo-Hyun took the DPRK by surprise and the ongoing discussions on inter-Korean relations were a direct casualty. North Korea announced plans to cancel the upcoming inter-Korean economic talks, citing concerns about the "political instability" in the South. The DPRK's official state press blamed the United States for the impeachment, referring to it as a "coup" to "install an ultra-right pro-U.S. regime." South Korea's new democracy must learn to confront Korea's "uncertain security future" relative to the nuclear crises and must also learn quickly how to navigate through the troubled waters of international diplomacy and the strained U.S.-ROK alliance. Anti-American sentiment was displayed during the 2002 presidential election by a segment of the Korean electorate, but during the 2004 election campaigns it was not a major campaign issue. The broad lesson of the 2004 political episode seems to be that an interplay of forces internal and external to Korea may lead, as during the era of the Hermit Kingdom of old Korea at the end of the nineteenth century, to political crisis and the tragedy of possible external wars involving outside powers. The two Koreas have proven, once again, that their fate is closely bound together by geopolitics and technologies capable of both good and evil. In writing this book I have been much indebted to several institutions and individuals. During my field research in South Korea in the late 1990s I spent my faculty improvement leave from Iowa State University visiting the Yonsei University Graduate School oflnternational Studies in 1997. This was followed by a sixmonth sojourn as visiting exchange professor at Sejong Institute in 1998. During the academic year of 1999-2000 I was a Fulbright visiting professor at the Ewha Woman's University Graduate School of International Studies.

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In all of these field experiences of research and teaching, I was an eyewitness to the unfolding political transformation of Korean society and politics. South Korea began to display a vibrant democracy with the enterprising spirit of a citizenry dedicated to building a free society in search of peace and prosperity. In the midst of the tear gas-filled streets of Seoul, I saw scores of Molotov cocktail-throwing radical students clashing with combat police on and off campus. I joined many other bystanders in praying for the return of civility and for the rule of law to prevail for the sake of liberal democracy. Looking over the ashes of a Yonsei University science building, set ablaze by the student leaders under siege by combat police, I hoped that the winter of despair would soon give way to a spring of rejuvenation and an eventual return to reflective and maturing democracy with justice and freedom. In researching for this project I have talked with and learned from various people, all of whose names cannot necessarily be included. I owe special thanks to many individuals whom I interviewed during my field trips. I hope that their confidence in me as a scholar has not been diminished as a result of my writing and the interpretations included in this book. Among many colleagues and friends, I would like to single out the following in special thanks for both their challenging questions and their support: C. Fred Alford, Auh Soo-Yung, Peter Beck, Victor D. Cha, Cho Paik-Jae, Han Bae-Ho, Im KyeSoon, Patrick James, Matthias Kaelberer, C.S. Eliot Kang, Young Hoon Kang, Eun-Mee Kim, Hong Nack Kim, Ilpyong J. Kim, SamuelS. Kim, B.C. Koh, ChaeJin Lee, Yong S. Lee, James M. McCormick, Richard Mansbach, Chung-In Moon, Patrick Morgan, Tony Namkung, Jae-Kyu Park, Robert Scalapino, Steffen Schmidt, Scott Sneider, David Steinberg, Dae-Sook Suh, Mary Ann Tetreault, Horace Underwood, Yoo Jang-Hee, and Ho-Sup Yoon. My thanks go to the following graduate student assistants: Benjamin Hagen, Seung Hee Jo, Patrick Kirby, Joe Oswald, and to Nancy Lee of the Korea Economic Institute. Thanks also go to those students, both at Iowa State University and in Korea, who took my introductory and advanced political science courses, International Politics, International Organization, Comparative Foreign Policy, Asian International Relations, Comparative Asian Politics, and a series of topical minicourses in political science. Let me extend my special thanks for their dedicated support to the members of the political science department of Iowa State University: Barb Marvick, Joyce Wray, and Darlene Brace. I would also like to give my thanks, for their display of professionalism in editorial guidance and copyediting of my book chapters, to the editorial staff of M.E. Sharpe: Patricia Loo, Angela Piliouras, and Amy Albert. Without the support and affection of my family members, including Christopher, Ann Myonghi, and my wife, Mary, this book would not have seen light in its present form. I would like to publicly acknowledge the special care and attention given by Mary despite her busy schedule and professional commitments as well as the academic responsibility of teaching and administration.

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I also need to acknowledge a number of institutions that assisted me directly or indirectly by honoring me with awards and financial support: Iowa State University for a faculty improvement grant in 1997; an Association for Asian Studies NEAC small grant in 1998; the Sejong Institute residential and travel grants in 1998; Arizona State University Center for Asian Studies for visiting professorship in 1998; Fulbright Commission for Exchange Professorship Award in 1999; Iowa State University for a foreign travel grant in 2000 and a research leave award in the spring 2004 semester. M.E. Sharpe is a recipient of the publication subsidy grant from the Korea Foundation in the production of this book. This was the third such prestigious institutional award to M.E. Sharpe for books on Korea and Korearelated subjects in recent years. None of the institutions or individuals affiliated with them are responsible for the opinions reflected in this book. I am solely responsible for any factual errors or misstatements contained herein. As a general rule, all Korean names are given in the text according to the McCune-Reischauer system of transliteration, with some stylistic modifications. Exceptions include individual names that are widely recognized and accepted in their idiosyncratic renderings, such as Syngman Rhee and Kim Il Sung. Other exceptions are certain place names, such as Seoul, and official terms like Juche. Otherwise, family names precede given names, and the given names are hyphenated (Kim Dae-Jung or Roh Moo-Hyun). As for the ordering of individual authors' names in the reference material, I have tried to follow individual preferences (e.g., B.C. Koh, Chae-Jin Lee, Ilpyong J. Kim, Dae-Sook Suh) if they are known to me. Finally, this book is dedicated to the memory of those who fought for the causes of democracy and freedom in Korea. April2004

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Transforming Korean Politics

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1 Introduction Ideas Matter in Korean Politics

While democracy is not yet universally practiced, nor indeed uniformly accepted, in the general climate of world opinion, democratic governance has now achieved the status of being taken to be generally right. 1 Amartya Sen, 1999 Winner of the 1998 Nobel Memorial Prize in Economic Sciences Advancing human development requires governance that is democratic in both form and substance. [These include:] representation, fair elections, checks and balances, and freedom of expression. 2 U.N. Human Development Report 2002 "Ideas matter in politics" because they are often a determinant of public policies (Goldstein and Keohane, 1993: 3). Historically, a certain set of ideas have led to "new thinking" which, in tum, acted as a catalyst for initiating drastic socioeconomic and political changes for a community of people, nation, and the world atlarge.3 Ideas are "transformative" when they become provocative by enticing leaders and elites to seek for a change in institutions, as happened in Korea's recent history. Several key ideas, like modernization, democratization, and globalization, have come to shape the system of beliefs and attitudes of the people in Korea, as the present chapter will show. Ideas can also become proactive by giving an alternative scenario that the people come to desire for the future. This book is about how and why several key ideas have come to play in transforming Korean politics in recent decades. The Korean people have lived under the authoritarian rule of government in relative poverty for many centuries. In the last decades of the twentieth century, however, the new notions of democracy and prosperity arose to capture the national imagination and to become the primary concern of the government leadership. The idea of modernization inspired the soldiers-turned-politicians during the authoritarian phase of Korean politics in the 1970s to initiate a program of socioeconomic development through industrialization. The democracy movement launched first by university students in the early 1960s, and then by opposition leaders in the 1970s, came to fruition in South Korean politics in the late 1980s. 3

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The emergence of democratization and modernization has thus played an important role in the transformation of the socioeconomic and political life of modernday Korea. The forces and ideas that underlie these processes have been key factors in shaping the government policies. The ways these ideas and forces have helped to influence the political dynamics and outcomes in South Korea, since its democratic opening in 1987, are the primary focus for analysis in this book. Both democratization and modernization emerged first as powerful ideas that, in turn, worked both intentionally and unintentionally to shape the actions and beliefs of political actors and the sequence of implementing government programs. Each of South Korea's Sixth Republic administrations since 1988 has played a significant part in the creation of the modern state of South Korea that is committed to both liberal democracy and a market-oriented economy. In 1987, the Republic of Korea (ROK, or South Korea) experienced what Samuel P. Huntington calls the "third wave" (1991). While the first wave of democratization began in Europe in the nineteenth century, the second began after World War II, and the third started in Portugal and Spain in 1974. This idea of democratization spread into the Mediterranean and beyond to Latin America and the AsiaPacific region in the 1980s. As Max Weber wrote almost a hundred years ago, "ideas and interests" play a major role in social life. 4 Ideas also shape politics, much as culture shapes economic and political developments (Gerth and Mills, 1958; Harrison and Huntington, 2000; Weber, 1946a). The program of Harvard University's Academy for International and Area Studies organized a symposium in 1999 and published its proceedings as Culture Matters: How Values Shape Human Progress (Harrison and Huntington, 2000). This line of inquiry on whether and how "culture matters" is both timely and promising in advancing the knowledge base of the socioeconomic transformation of the third wave of new democracies. This book builds on this theme by exploring the transformation of Korea in terms of movement toward democratization and modernization. This is undertaken against the backdrop, first, of traditional Korean culture and, second, of the pressures of the world economy. The complex interweaving of these forces and the ideas that shape them have been evident in each of the recent administrations; yet, an overall pattern of uneven progression and movement by fits and starts has emerged. While modernization was the driving force for the autocratic regimes that governed South Korea in the period following the internecine war, democratization gradually came to the fore in the period immediately preceding and following the assassination of President Park Chung-Hee in 1979. The impacts of the world economy and the forces of globalization overtook the country by 1997. Interplay of Ideas, Values, and Policy in the Era of Transition

A hundred years before the democratic opening of Korea, traditional Korean society was engulfed in an acute political conflict over the: issue of whether tc preserve

INTRODUCTION: IDEAS MATIER IN KOREAN POLITICS

5

or reformulate the Confucian social order and political system. The failures of the Choson dynasty (1392-1910) to confront the challenges within and outside the country in the age of imperialism led to the decline and eventual demise of the kingdom in 1910 (Kim and Kim, 1967; K. Kim, 1980). Modernization of Confucian social order and an open door policy, as advocated by the progressive reformist camp, was defeated by the conservative reactionary wing of the aristocratic Yangban elite, which were entrenched in court politics as advisers to the throne (Deuchler, 1993; Eckert et al., 1990; Palais, 1975). Social Origins of Class Formation Before 1945 Traditional Korea was predominantly an agrarian society with "family-sized tenancy" as the social unit of agricultural production. Tenancy was a major feature of village life during the Choson dynasty and continued to persist throughout the colonial period (1910-1945). This system of tenancy was only abolished after World War II by an enactment of land reform bills in 1949. Agrarian discontent and peasant activism played a major role in shaping Korea's recent history. The Tonghak movement begun in 1894, for instance, contributed to the outbreak of the Sino-Japanese War (1894-1895) over the control of Korea. Peasant radicalism in the post-World War II years in Korea was also a contributing factor in the origin of the Korean War ( 1950-1953), according to Bruce Cumings (1981). But, as a recent study shows, tracing the social origins of traditional Korea's path toward modernity requires studying earlier history, including "colonial modernity" and its socioeconomic consequences and political dynamics (Shin and Robinson, 1999). The Japanese colonial government carried out a cadastral survey from 1910 to 1918 and promulgated a land tax to raise revenue in 1914. According to this survey, 77.2 percent of the rural population was reportedly tied to the tenancy system by leasing all or part of its cultivated land. Tenant-related disputes escalated over time and across regions in colonial Korea. The twenty years from 1920 to 1939, for instance, witnessed 140,969 disputes involving 397,254 tenants, landlords, and agents (Shin, 1996: 54). Tenancy-related disputes ranged from a simple controversy over tenancy rights to more serious disputes over the interpretations of rent, land taxes, and others. The question of how to manage agrarian disputes became a major policy issue for the Japanese colonial government. This was also true for the subsequent U.S. military government ( 1945-1948) and for the early phase of the First Republic administration of Syngman Rhee (1948-1960). The social class structure in rural Korea was diverse and complex, but it consisted primarily of landlords, owner-cultivators, semi tenants, and landless tenants. There were some absentee landowners, like the Japanese during the colonial era, but most of the Korean landowners were involved in self-cultivation or management of the land. At least two types of landlords were recognized in the clas-

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sification scheme of the colonial government: (A) those who rented all of their land and (B) those who rented out most of their land but cultivated a small portion for themselves. Type A landlords have larger land holdings, but they were absentee landlords living in cities (Shin, 1996: 46). Yet, as anthropologist Clark Sorensen notes, "the majority of landlords, in fact, were small village residents;' or Type B (Sorensen, 1991: 43). Commercialization of agriculture took place during the 1920s as Korean farm products gained comparative advantage in trade. This primarily took the form of increased rice production in southern Korea and the export of rice from the colony to the metropolis in Japan from the 1920s to the 1940s. Two distinct phases of peasant protest existed in preliberation Korea. They were, as Shin Gi-Wook ( 1996) notes, land-tenant disputes (1920-1932, 1932-1945) and the Red Peasant Union movement (1930-1939). The colonial legacy of peasant protests, in short, was crucial in determining the rural political environment in Korea after World War II. It was responsible for agrarian reform in the South and for a somewhat more radical revolution in the North (Shin, 1996: 196). As Shin notes, "the constant challenge of landlords by tenants in the 1920s and 1930s paved the way for dissolution of the landlord class, and the 1930s red peasant union movements produced many key leaders" who were subsequently active in the post-World War II era (1996: 143). The landlords and the landed gentry were destroyed by the land reform introduced into South Korea in 1949 and the subsequent devastating effects of the Korean War. Some Korean landlords were induced, in the face of increasing tenancy-related disputes and the peasant protest movement, to divert capital from land to industry in preliberation Korea. Some of the former landlords were also able to switch from agrarian into commercial and business entrepreneurship, following the 1949 land reform. They became the new social class of capitalists in the post-Korean War years (Eckert eta!., 1990). The origins of the Korean working-class formation can be traced back to the colonial era, when Korea was made an integral part of the Japanese imperial scheme of building an empire in Northeast Asia through industrial mobilization. Korea provided a stepping stone to the Japanese expansion into Manchuria in the early 1930s and into northern China following the start of the Sino-Japanese War of 1937. A large-scale rural exodus took place in colonial Korea with a significant segment of the rural population leaving villages in search of nonagricultural employment elsewhere in Korea and even overseas in Manchuria and Japan. A large number of rural farmers in the southern provinces moved north to the central provinces near Seoul and to the northern provinces. Many of the migrant farmers flowed mainly into the industrial centers of big cities like Seoul, Pusan, Pyongyang, and Hungnam (S. Park, 1999: 132-133). Beginning in the early 1930s, industrial growth in colonial Korea changed the labor structure drastically. The change in employment from the agricultural sector to the nonagricultural sector was rapidly shifting, from 80.6 percent employed in agri-

INTRODUCTION: IDEAS MATTER IN KOREAN POLITICS

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culture in 1930, to 7 4. 8 percent in 1940, to 71 percent in 1945. This shift was due to a rural exodus with two destinations: one domestic and the other foreign. Within Korea, the shift concentrated on factory, mining, and construction work sites in the fast-rising industrial centers near the major cities of Seoul, Inchon, Pusan, Pyongyang, Chinanpo, Hungnam, and Chongjin. This led to rapid urbanization from 7 percent of the total population in 1935 to 13.2 percent by 1944. The Korean rural exodus and migration also extended to a larger labor market in Manchuria and Japan. From 1930 to 1940, according to one study, approximately 1.3 million workers found industrial employment abroad: 700,000 in Japan and 600,000 in Manchuria, which often paid more than the Korean labor market (S. Park, 1999: 135). As part of imperial Japan's war-time plan of forced labor mobilization, another 1 million Korean workers were compulsorily mobilized after 1939: 720,000 for industrial labor and 240,000 as civilian personnel in the Japanese military. The emergence of entrepreneurs and industrialists in Korean society has colonial origins, as most of them were the offspring of benign capitalism associated with the Japanese empire in Korea or empire-building abroad (McNamara, 1990; Eckert, 1991). With an expansion of Japanese investment in the colony, the Korean business class arose to compete with the Japanese in the areas of commerce, industry, and finance. Many of them were former landowners and landed gentry in social origin. 5 The story of the social origins of working-class formation in modern Korea after 1945 will continue in chapter 8, but the details on the rise of civil society and middle- and industrial-working classes will be resumed in subsequent chapters (see Chapter 9). In the meantime, we turn next to address the dynamics of democratic opening and transformation in Korean politics in the last fifteen years of the twentieth century.

The Era of Democratic Transition and Consolidation In the era of democratic transition and consolidation, Korean politics from the 1990s until today has been undergoing a historic transformation in the context of the clash of ideas and values. Korean society has been confronting and overcoming challenges both within and outside the country in the post-Cold War security environment. In the democratization era, the dynamics of Korean politics revolved around the question of democratic transition and consolidation. A new constitution was adopted by a national referendum on October 27, 1987, culminating in the presidential election on December 16, 1987, and the launching of the new Sixth Republic of Korea on February 25, 1988. This put an end to the long struggle of the prodemocracy movement against the authoritarian state from 1962 to 1987 andrestored full democracy to Korea. South Korea became one of the successful cases of economic development followed by democratic transition in Asian countries. A system of political democracy emerged from an interplay of elite machinations "from

8

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above" and mass movement in civil society "from below" by riding on the global third wave of democratization (Huntington, 1993; Kihl and Kim, 1988; S. Kim, 2000; Oh, 1999; Shin, 1999). In the end, the democratization of Korean politics in 1987 resulted from the dynamic interaction between the authoritarian state from above and the activated civil-society groups from below. But this was accomplished only after a long struggle because political change took place within the context of what Kim Sunhyuk calls the third democratic juncture (1984-1987) in the ROK constitutional history (S. Kim, 2000). The first democratic juncture (1956-1961) was a success, culminating in the April19, 1960, Student Revolution that overthrew the First Republic to usher in liberal democracy under the Second Republic (19601961). The second democratic juncture (1973-1980) failed to bring about political change toward full democracy, however, due to authoritarian repression led by the military junta. This was a temporary setback because the prodemocracy movement forged the successful alliance of "triple solidarity" groups in civil society, consisting of students, workers, and churches, that repeated itself to provide a working formula for a political movement during the third democratic juncture (1984-1987). What made the Korean case of democratization special during the third democratic juncture in 1987 was that the prodemocracy movement was able to broaden the basis of its political support. The movement was based and led by triple solidarity groups in civil society, as before. Yet, this time the solidarity groups were able to forge an alliance with certain national associations like the trade unions and to entice middle-class citizens to side with the cause of democratic transition. The Korean case of democratic transition was therefore broadly based, as compared to other Latin American and east European cases, in the sense of being guided not only by elite machinations "from above," but also by popular and civic sectors "from below" in the Korean society. "Civil society is the realm of spontaneously created social structures separate from the state that underlie democratic political institutions" (Fukuyama 1995a: 8). As self-organized groups and movements in society that are relatively autonomous from the state, the civil-society groups are capable of political activities in the public sphere "to express their concerns and advance their interests according to the principles of pluralism and self-governance" (S. Kim, 2000: 15). Defined as such, civil society is composed of, although not limited to, student organizations, trade unions, business associations, and religious groups. Other civic-minded groups, like human rights or women's movement groups, are also concerned about progressive social issues like protection of the environment and foreign guest workers. The civil-society groups have been activated in times of political and economic crisis that periodically befall modern democratic societies like South Korea since 1987. The successive administrations of South Korea's Sixth Republic (1988 on) include the tenure of four ROK presidents: Roh Tae-Woo (1988-1993), Kim

INTRODUCTION: IDEAS MATTER IN KOREAN POLITICS

9

Young-Sam (1993-1998), Kim Dae-Jung (1998-2003), and Roh Moo-Hyun (2003-2008). Each of these administrations has displayed varying degrees of political leadership by advancing campaign pledges during the presidential elections and putting forward public policies and programs of respective democratic reform agendas. Their respective political goals have been to build a powerful economic base for a prosperous civil society that will enhance Korea's position and status as a modernizing country. Giving an analytical focus to government policies, an approach taken in this book, raises questions regarding the level of analysis. An emphasis on the leadership role in policy making may play down, to some degree, the potential role of the mass public and public opinions in policy analysis. Although most public policies are formulated at the elite level, the role of the public and interest groups in civil society will also be reflected in the policy making for democracy, so as to make government actions and policies accountable to the public as voters. 6 There has been more policy continuity and consistency than disruption across the ROK administrations despite politically motivated denials by respective administrations. The Kim Young-Sam administration, for instance, inherited the legacy of promoting economic developments through liberalization reform that was the hallmark of the Roh Tae-Woo era (1988-1993). The attainment of economic recovery and democratic consolidation was the challenge confronting the Kim DaeJung administration, although it committed itself to go beyond democratization into deepening democracy and the democratic governance. In implementing the International Monetary Fund (IMF) imposed reform agenda following the 19971998 financial crises, the Kim Dae-Jung administration pledged to pursue the strategy of "parallel development of democracy and market economy." This was an ambitious undertaking, but the minority status of the ruling party in parliament hampered its realization. Fortunately, there has been no reversal in Korea of the third wave of democratization (Diamond, 1999). Some critics voiced sharp attacks on the Kim Dae-Jung administration for the alleged failure of democracy in South Korea in the second half of its five-year term in office. This negative appraisal of the political stalemate and gridlock in Korea's Sixth Republic under the Kim Dae-Jung administration, according to his critics in the political opposition, was a matter of grave concern for the future of the Korean democracy. The object of the criticism, however, was not so much the reversal of democracy, or the lack of democratic commitment on the part of the presidential leadership, as the alleged failure of democratic governance by the Kim administration. In the post-IMF era, the Korean state was subjected to severe criticism, especially for its slower growth and for restructuring the economy. This included the "alleged" failure to attain campaign pledges for undertaking the structural reform of big business to make the Korean economy competitive in the world market in the difficult era of globalization. Democratic governance and governability and the relative success of the Korean state in the world economy will continue to play a major role in an age

10

CHAPTER I

Figure 1.1

Interplay of Ideas, Values, and Culture on Policy

Ideas

Values

Culture Wealth (or Poverty) of Nations

dominated by globalization. Before 1998, the Korean state was characterized as a "developmental state" or a "capitalist developmental state," whereby economic development was strategically led by the government providing leadership and guidance. Although such an interventionist role of the state has now been downgraded, in favor of more market-oriented, laissez-faire government policies after 1998, the position and role of the Korean state continues to remain crucial for making or breaking the productive activities undertaken by economic actors. This is true for both big businesses, represented by the chaebol (big business conglomerates), or small businesses and the working-class and labor unions, as discussed in Chapters 8 and 9. The conceptual framework suggested later on provides one way of accounting for the interplay of ideas, values, and culture on policy outcome in the era of transition focused on the policy goal of promoting economic prosperity. What this framework explains, as shown in Figure 1.1 by the direction of causal paths, is that "ideas matter in policy outcomes." When ideas as beliefs and belief systems are adopted by government elites and put into effect as major policies, they will make a difference over time in terms of whether the wealth of nations is enhanced and whether poverty is overcome. Figure 1.1 also illustrates, however, that the causal path of ideas will not go directly to the policy outcome. Instead, the causal link is indirect, passing through the paths of culture and values of the society. In fact, such worldviews and principled beliefs as modernization and democratization are a reflection of dominant values that are, in turn, identified with societal culture. This may also be true of the causal beliefs on globalization, which represents a new set of ideas. Thus, culture acts as a filter through which the policy outcome can be made either positive or negative. In fact, one can say that "ideas, culture, and values are interrelated and interactive," and ideas and values will make up the "culture stuff."7

INTRODUCTION: IDEAS MATTER IN KOREAN POLITICS

II

The Kim Young-Sam administration, inaugurated on February 25, 1993, was endowed with two towering mandates. On the one hand, being led by the first civilian president since the early 1960s, the Kim government was obliged to expedite democratic reforms and to complete the process of democratic consolidation. On the other hand, it also faced the task of reviving the Korean economy through enhanced international competitiveness. It is in this context that democratization and globalization emerged as the twin pillars of Kim's blueprint for national governance. Following his inauguration, President Kim Young-Sam undertook bold measures of democratic reform, such as amendments to electoral and campaign finance laws, implementation of local autonomy, purification of the military, labor and chaebol reforms, and introduction of the "real-name" financial transaction system. As part of the globalization push, the government also attempted to undertake what appeared to be new measures for economic liberalization, deregulation, and institutional rationalization. The admission to the Organization for Economic Cooperation and Development (OECD) and the ratification of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations especially underscored the crux of Kim Young-Sam's globalization drive (Moon and Mo, 1999a: 13). By 1993, South Korea had achieved the twin miracles: an economic miracle of development through industrialization and a political miracle of democracy. While the economic miracle led to Korea's rise to regional prominence, its political miracle prepared for South Korea's dramatic rise to global prominence. This was made possible by joining the advanced industrial democratic states as an OECD member, and all of these rises in status occurred within a relatively short period of time, from 1987 to 1998. As a result, South Korea was thrust into the situation of confronting what Chungin Moon and Jongryn Mo call two paradoxical consequences (1999a). The first involves a trade-off between economic growth and political liberty, and the second centers around Korea's reform of its "mercantile ethics and institutions" (11-12). In explaining the political dynamics of policy making in South Korea's Sixth Republic, a rational-choice perspective of game theory will be introduced and applied to Korean politics as noted in the next section (Kim and Kim, 1995a).

Reconciling Democratization and Globalization in the Korean State · The Asian financial crisis of 1997-1998 that swept across East Asia hit the South Korean economy hard, and the country has only recently recovered. This experience of overcoming the economic crisis provides the context for testing if and how the twin themes of democratization and globalization can be reconciled as Korea enters the new millennium. The 1997-1998 Asian financial crisis, which placed the South Korean economy under IMF supervision, offered an image of South Korea riding on the tidal wave of globalization in a world economy and confronting the new challenges in the post-Cold War era. The conceptual framework shown in Figure 1.2 shows the key factors respon-

12 CHAPTER I

Figure 1.2

Reconciling Ideas in the Korean State

State Policy Democratization

Globalization

Progress in Economic Development and Political Democracy sible for the progress in economic development and political democracy in contemporary Korean society. It highlights the dilemma of reconciling the political logic of democratization and an economic logic of globalization. This took place in the competitive environment following the traumatic experience of the 19971998 Asian financial crisis, which slowed the pace of economic growth. 8 The framework shows that state policies, which reflect key ideas and worldviews like modernization, are geared to make great progress in both economic development and political democracy. However, this success or failure will be manifest only in the context of an interplay and interaction between the forces associated with democratization and those associated with globalization. This dynamic will set the stage for determining how and whether state policies on political economy will be carried out successfully. In short, the South Korean government (both the Kim Young-Sam and Kim Dae-Jung administrations) has had to deal with the complex policy issues associated with furthering both economic development and democratic consolidation. In 1998, the year when the Kim Dae-Jung administration took office, South Korea was confronted with an economic crisis of unprecedented scope and the challenge of deepening democratization in the political arena and enhancing market orientation in the economic arena. How to continue sustainable socioeconomic development while promoting democracy was the challenge that president-elect Kim Dae-Jung inherited from out-going President Kim Young-Sam. Figure 1.2 shows the challenge of reconciling the twin factors of both democratization and globalization that arose only since the midterm of the Kim YoungSam administration in 1995. The Roh Tae-Woo administration was truly a caretaker for the transitional era of South Korean democracy. As such, the Roh presidency provided the bridge between the old era of rapid economic growth and authoritarian politics and the new age of liberalization and democratization. The Kim Young-Sam administration was the first civilian government elected by popular vote since 1961 and, as such, enjoyed a popular mandate in its initial stage of democratization following a successful transition from the Roh Tae-Woo administration.

INTRODUCTION: IDEAS MATTER IN KOREAN POLITICS

13

Table 1.1

The Role of Ideas and Policy Impact on Each of the Sixth ROK Administrations (1988-2008) Ideas

Administrations 1.1988-1993 (Roh Tae-Woo) 2. 1993-1998 (Kim Young-Sam) 3.1998-2003 (Kim Dae-Jung) 4.2003-2008 (Roh Moo-Hyun)

Modernization +

Democratization 0

Globalization

0

+

+

+

+

+

+

0

Key: +presence/positive; 0 neutral;- absence/negative

Although democratic transition took place successfully, the country did not reach the stage of full democratic consolidation during the Kim Young-Sam government. Even if constitutional consolidation by the Kim administration was completed by 1993, South Korea was still short of institutional, behavioral, and civil cultural consolidation. As "traditional political culture impeded democratic reorientation of citizens' behavioral and civil cultural attitude as well as elite settlement," varying vested interests of conservative coalition prevented the Kim Young-Sam government from completing the processes of institutional consolidation (Moon and Mo, 1999: 15). In fact, the Kim Young-Sam administration failed to complete democratic consolidation. The vested interests of conservative forces, an inertia-driven bureaucratic system, newly emerging political gridlock, and traditional political culture all prevented Kim from completing his democratic reform agenda. The South Korean case clearly illustrates that democratic consolidation is much more challenging than the initial phase of democratic opening. The globalization push was also equally troublesome. It was undertaken without corresponding domestic reforms, resulting in a premature opening and subsequent hardship. More critical was the resistance of domestic political forces that impeded the process of globalization by blocking liberalization, deregulation, and rationalization (Moon and Mo, 1999: 21). South Korea's Sixth Republic as a newly democratizing state faced what is known as a "nested" game dilemma of undertaking negotiation in multiple arenas simultaneously (Tsebelis, 1990). The nested game approach will be elaborated further in Chapter 5. Thus, the Kim Young-Sam administration can be characterized, according to one study, as "a period of incomplete democracy and unprepared globalization." But, it seems "unfair to attribute the failure solely to Kim's leadership." Three handicaps of "structural rigidity, parochial political culture, and transitional uncertainty" were equally responsible for holding the Kim government at bay, fundamentally limiting the scope of its policy and political maneuverability (Moon and Mo, 1999: 22). The

14

CHAPTER I

subsequent administrations of Presidents Kim Dae-Jung and Roh Moo-Hyun were also subject to these structural, cultural, and systemic constraints in their pursuit of the respective policy of enhancing the "wealth of nations." Electoral Rules and Policy Outcome To capture the dynamic interplay of ideas, values, and policy during each of the four administrations of Korea's Sixth Republic, the institutional and behavioral foundation of Korea's electoral politics we will now scrutinize in specific detail. These institutional requirements of Korea's democratic politics have to do with the periodic democratic and popular elections for both the executive and legislative branches and the public's voting behavior. At the national level of politics, for instance, one must account for the rhythm of electoral cycles, which sweep the country in regular intervals. The presidential election is conducted every five years, and the general election to choose the members of parliament is held every four years. The electoral outcomes of these national-level elections, and the distribution of voting strength in terms of regional voting and the National Assembly seats are clearly the determining factor affecting Korean national politics. Whether the president's party in parliament emerges as a majority or a minority party in status, for instance, is the crucial factor in making or breaking the legislative enactment of the administration's important policy and programs through the legislature. Table 1.2 indicates the contrasting schedules and calendars of the presidential and general elections in Korea's Sixth Republic with important political consequences. The varying electoral cycles and schedules between the presidential and parliamentary elections have differing consequences on the political stability and continuity of the specific administration in its pursuit of legislative agenda through parliament. The Roh Tae-Woo administration, for instance, was affected by two separate National Assembly elections (1988 and 1992) during its tenure. The same problem of holding two general elections (2008 and 20 12) will be faced by the future administration, barring any constitutional amendments or new election laws during the term in office of the Roh Moo-Hyun administration (2003-2008). Changes in electoral systems and electoral outcomes at the national level have shaped the political life of South Korea over the years since the founding of the ROK on August 15, 1948. Prior to 1988, the ROK had conducted numerous elections, but some of the presidential elections were held not as popular or direct elections but as indirect ones. During the authoritarian era of the Fourth and Fifth Republics (1973-1987), for instance, the ROK president was chosen by an electoral college that was subject to manipulation by the ruling party and authoritarian elites (Ahn, Kil, and Kim, 1988). With the democratic opening in 1987, a system of popular presidential elections was adopted, based on the electoral principles of direct and secret ballots. This was also the case with the parliamentary elections

INTRODUCTION: IDEAS MATTER IN KOREAN POLITICS

15

Table 1.2

Institutional Basis of Electoral Cycles in the Sixth ROK (1988-2008) National Elections Administrations 1.1988-1993 (Roh Tae-Woo)

Presidential Election (5-year single term) 13th Presidential Election Held December 17, 1987

Parliamentary Election (4-year term with no limits) 13th National Assembly Election Held April 26, 1988 14th National Assembly Election Held March 24, 1992

2.1993-1998 (Kim Young-Sam)

14th Presidential Election Held December 18, 1992

15th National Assembly Election Held April 11, 1996

3.1998-2003 (Kim Dae-Jung)

15th Presidential Election Held December 18, 1997

16th National Assembly Election Held April13, 2000

4.2003-2008 (Roh Moo-Hyun)

16th Presidential Election Held December 19, 2002

1yth National Assembly Election Held April 15, 2004

that became more open and fair since 1987. The unicameral National Assembly is popularly elected by voters through a single-member district system with safeguard provisions that allow proportional representation of at-large members based on the party strength of electoral votes and the number of seats captured in the general elections. If the presidential ruling party fails to capture the simple majority in parliament, it is necessary to produce a working ruling coalition because of the minority party status in parliament. The success or failure in coalition-building relates to an effective presidential leadership both inside and outside parliament. What is at stake is the ability of presidential persuasion to enact major legislative bills in the National Assembly. The electoral outcome of parliamentary elections in Korea's Sixth Republic involved the ruling party either winning the election or creating a ruling coalition. The ruling coalition is exactly what occurred during the last three years of the Roh Tae-Woo administration, under the name of the Democratic Liberal Party (DLP), and during the first three years of the Kim Dae-Jung administration with the National Congress for New Politics (NCNP; Millennium Democratic Party after 2000) and the United Liberal Democratic Party in a coalition that subsequently failed to hold in September 2001. Table 1.3 shows the electoral outcome of the four general elections conducted in the Sixth Republic, in terms of the number of seats captured by the ruling party and by each of the opposition parties in the National Assembly. The party strength in the National Assembly, at the outset of the legislative session following the election, may or may not remain as such during the term of the National Assembly due to the subsequent by-elections and party defections, which make legislative politics volatile and subject to constant change.

16

CHAPTER 1

Table 1.3

Parliamentary Electoral Outcome and Party Strength in the Sixth ROK

(1988-2008}

Parliamentary Seats Captured General Elections

The ruling party

13th National Assembly Election (4/1988)

125

14th National Assembly Election (3/1992)

149

15th National Assembly Election (4/1996)

139

16th National Assembly Election (4/2000) 115

171h National Assembly Election (4/2004)

Opposition parties

70 59 35 10 Total Seats 299 97 31 22 Total Seats 299 79 50 15 16 Total Seats 299 133 17 8 Total Seats 273

152 121 10 9 4 3 Total Seats 299*

Party name/leader DJP (Roh Tae-Woo) PPD (Kim Dae-Jung) RDP (Kim Young-Sam) NDRP (Kim Jong-Pil) Independent/Others DLP (Roh Tae-Woo) PPD (Kim Dae-Jung) UPD (Chung Ju-yong) Independents/Others NKP (Kim Young-Sam) NCNP (Kim Dae-Jung) ULD (Kim Jong-Pil) DP (Yi Ki-taek) Independents/Others

GNP (lee Hoi-Chang) MOP (Kim Dae-Jung) ULD (Kim Jong-Pil) Independents/Others

Uri Party (Chung Dongyoung) GNP (Park Geun-hye) DLP (Kwon Young-ghil) MOP (Choo Mi-ae) ULD (Kim Jong-pil) Independents/Others

*With the adoption of a "one person, two votes system" election law, the number of total seats was increased from 273 to 299, of which 243 are representatives ofthe single-member electoral districts and the remaining 56 are at-large proportional members.

Irrespective of the party strength in the National Assembly, the Korean president serves a single five-year term, for which he is popularly elected. In the absence of a working majority of votes in the parliament, the presidential ruling party will be incapable of running the government programs through the legisla-

INTRODUCTION: IDEAS MATTER IN KOREAN POLITICS

17

ture. This situation of a "divided" government between the executive and legislative branches necessitates a constant display of presidential leadership with skill and tact so as to overcome political stalemate in national politics. In the first two years of the Roh Tae-Woo administration (1988-1989), for instance, the National Assembly was immobilized because of the minority status of the ruling Democratic Justice Party (DJP). This led to a subsequent move to explore the possibility of the ruling party merging with the opposition parties to create what was hailed at that time as "a new conservative grand coalition" in parliament. As a result of the merging of three parties: Roh Tae-Woo's ruling DJP and two opposition parties of Kim Young-Sam's Reunification Democratic Party and Kim JongPil's New Democratic Republican Party, a new ruling political party, the DLP, was launched in January 1990. This new conservative coalition increased its parliament seats to a total of 215, an absolute majority of almost 72 percent in a 299-seated National Assembly. This brought about political stability and a ruling majority party in the remainder of the Roh administration from 1990 to 1993, and into the first two years of the Kim Young-Sam administration, until the subsequent regularly scheduled general election was held in April1996. In the fourteenth National Assembly election in March 1992, the ruling DLP won 149 of the 299 seats of parliament, one vote short of a simple majority. In the fifteenth National Assembly election inApril1996, the ruling party of President Kim Young-Sam, now under the new name of the New Korea Party (NKP), won only 139 seats, 11 votes short of a simple majority in parliament. The remaining chapters of this book will explore the details of the political dramas and dilemmas associated with South Korea's attaining the twin goals of political democracy and the economic development of the Sixth Republic under successive administrations. The idea of democratic reform and consolidation by the Kim YoungSam administration, for instance, will be discussed in Chapter 4. The idea of reconciling democratization and globalization by both the Kim Young-Sam and the Kim Dae-Jung administrations will be examined in Chapter 5, and by the latter administration in Chapter 6. In fact, while democratic reform served as the principal political slogan in the first half of President Kim Young-Sam's term in office, the globalization campaign dominated national policy agenda in the second half of his five-year term. The inauguration of the Kim Dae-Jung administration in February 1998 coincided with the urgent task of resuscitating the Korean economy in the wake of the 1997-1998 Asian financial crisis and undertaking the structural reform of the economy under the IMP-mandated supervision and trusteeship.

The Impact of Ideas on Policy: Modernization, Democratization, and Globalization Three principal ideas, values, and beliefs have affected the Korean people since the establishment of the ROK on August 15, 1948: modernization, democratization, and globalization. Each of these ideational and belief systems requires clarification. What is modernization and how and why is this idea of modernization accepted by the Korean elite and mass public today? What is democratization and

18

CHAPTER 1

why is it important to an understanding of the dynamics of Korean politics today? What is globalization and how does it affect the lives ofthe Korean people, whether individually or collectively, today or in the future? Modernization, democratization, and globalization are not the same thing as modernity, democracy, and globalism. Whereas modernization, democratization, and globalization relate to the process of change and transformation over time and are, therefore, dynamic, the terms "modernity," "democracy," and "globalism" reflect end points that are ideal types. The attitudes, values, knowledge, and culture of people in a modern society, however, differ greatly from those in a traditional society. Huntington argues (1968), for instance, that modernization can lead developing countries to political violence and conflict rather than peaceful and orderly change both in democratic and authoritarian states. In their study of the impact of ideas on foreign policy, Judith Goldstein and Robert Keohane argue that "ideas influence policy when the principled or causal beliefs they embody provide road maps that increase actors' clarity about goals or ends-means relationships, when they affect outcomes of strategic situations in which there is no unique equilibrium, and when they become embedded in political institutions" (1993: 3). After differentiating three ideal types of beliefs in terms of worldviews, principled beliefs, and causal beliefs, they proceed to outline three causal pathways by which ideas can affect policy: by providing principled or causal road maps, by affecting strategies where there is no unique equilibrium, and by becoming embedded in institutions (8). A modified version of this analytical framework will serve the subsequent discussion on each of the three ideas as the source of influence on Korean politics.

Modernization Modernization is the first set of ideas that has come to promote political and economic progress in Korea's modern history, as the subsequent chapters will show. Modernization represents ideas and beliefs that have served as "road maps" for government leaders in the pre- and post-1987 era, and has helped shape the direction of Korean political, economic, and social development. In this sense, modernization is a set of ideas that Goldstein and Keohane call a "world view." What, then, is modernization as an ideational system? The term "modernization" is used increasingly by social scientists and historians to refer to a grand transformation that first began in western Europe but subsequently spread throughout the world. Hence, the term "modernization" is often used interchangeably with "Westernization" or "Europeanization" (or "Americanization"). It is considered "desirable," "inevitable," "beneficial," and part of a long-range cultural and social change in developing countries. Modernization, however, does not necessarily mean Westernization, because non-Western societies can also modernize "without abandoning their own cultures and adopting wholesale Western values, institutions, and practices" (Huntington,

INTRODUCTION: IDEAS MATIER IN KOREAN POLITICS

19

1997: 78). "Modernization ideals, as valuations," as Gunnar Myrdal writes, have become the "official creed" and almost a "national religion." They are "one of the powerful strands ofthe new nationalism" in Asia (1968: 54). It is no surprise that China, in 1978, announced the Four Modernizations policy to be attained by 2000. The four policy goals identified by the leadership were modernization in agriculture, industry, science and technology, and defense. 9 Modernization is a historical process that includes such specific aspects of change as industrialization of the economy; secularization of ideas; a marked increase in geographic and social mobility; a spread of secular, scientific, and technical education; a transition from ascribed to achieved status; and an increase in material standards of living. Quantitative measures and indicators of modernization would also include the ratio of inanimate to animate energy used in the economy; the proportion of the working force employed in secondary and tertiary rather than primary production (agriculture, fisheries, and so on); the degree of urbanization; the extent of literacy; the circulation of mass media; the gross national product (GNP) per capita; and life expectancy. The central aspect of modernization as a historical phenomenon, which started in western Europe, is humanity's rapidly increasing control over the forces 0f nature. Hence, increasing control over the physical environment is accompanied by growing social interdependence. Humans become the master of nature and the servant to other humans. In modernized society, such as Korea, few people are killed by lightning, while many are killed in traffic accidents. Modernization, in this sense, implies intellectual, technological, and social revolution. Modernization transforms two of humanity's most fundamental relationships to time and to nature. Modernization, since it first began in eighteenth-century Europe, has not only involved industrialization and urbanization, but also increasing levels of literacy, education, wealth, and social·mobilization, as well as more complex and diversified occupational structures. Modernization became a universal process in the twentieth century resulting from the explosion of scientific and engineering know ledge. Modernization is, therefore, "a revolutionary process comparable only to the shift from primitive to civilized societies" (Huntington, 1997: 68). A summary of ideals associated with modernization include rationality, development and planning, the rise of productivity and levels of living, social and economic equalization, improved institutions and attitudes, national consolidation, national independence, political democracy (including representative assemblies founded on free elections and universal suffrage), democracy at the grass-roots level, and social discipline. It also includes value premises derived from a rise in the standard of living, such as an interest in birth-control measures (Myrdal, 1968: 57--69). Adoption of these values by the public will lead to attitude changes. Among the characteristics of "desirable" values appropriate for modernization pursued by the political elite are efficiency, diligence, orderliness, punctuality, frugality, scrupulous honesty, rationality in decisions on action (e.g., reflecting no favoritism), pre-

20

CHAPTER I

paredness for change, alertness to opportunities, energetic enterprise, integrity and self-reliance, cooperativeness, and willingness to take the long-range view. Ideas have their broadest impact on human action when they become world views (Goldstein and Keohane, 1993: 8). Like the world's major religions, modernization ideas have deeply affected human and social life in a variety of ways across millennia. Max Weber ( 1958) identified the Protestant ethic, for instance, as contributing to the birth of the spirit of capitalism. This, in turn, provided the context for the rise and spread of modernization ideas.

Democratization Democratization entails a set of ideas or beliefs held by individuals that provide "focal points and glue" to keep political coalitions together. As such, ideas associated with democratization have worked to define policy agenda and issues during the post-1960 era in Korean politics. Strictly speaking, democracy and democratization must be kept separate both conceptually and theoretically. Whereas democracy is an ideational system, as will be discussed in Chapter 3, democratization is the process of attaining the ideal and advancing the cause of democracy. The Korean leadership came to adopt the ideas of democracy in 1948 with the launching of the ROK, but the notion of "democratization" was taken more seriously only in the post-1960 years with the initiation of the prodemocracy movement that began to resist the prevailing authoritarian politics. The mainstream scholarship of democracy and democratic theory in the 1960s and 1970s was preoccupied with identifying the necessary conditions and prerequisites for the emergence of a stable democracy (Lipset, 1959; Almond and Verba, 1963; Moore, 1966; Dahl, 1971; O'Donnell, 1979). Seymour Martin Lipset, for instance, identifies economic preconditions for democracy by drawing a positive correlation between the degree of democracy and the standard of living of sample nations. Economic measures of GNP per capita were used to define the standard of living, while the legitimacy and effectiveness of government performance were used to measure the degree of democracy. In marked contrast, the scholarship of the 1980s and 1990s was concerned primarily with the dynamics of democratic transition and consolidation (Shin, 1994: 139). This recent scholarship has arisen from the global expansion of democracy since 1972, which Huntington characterizes as the third wave of democratization in the late twentieth century (1991a). 10 New scholarship tends to focus on the role of political leaders or strategic elites. Huntington notes that "democratic regimes that last have seldom, if ever, been instituted by mass popular action" (1984: 212). Leadership is responsible for much of the success in consolidating new democracies, as Juan Linz argues, because "their leaders must convince people of the value of newly gained freedoms, of security from arbitrary power, and of the possibility to change govern-

INTRODUCTION: IDEAS MATTER IN KOREAN POLITICS

21

ments peacefully, and at the same time they must convey to them the impossibility of overcoming in the short-run the dismal legacy of some non-democratic rulers and the accumulated mistakes that have led or contributed to their present crisis" (1990: 162). Democratization is about the process of how to move authoritarian politics into democratic politics. There are several distinctive stages of democratization: 1. 2. 3. 4.

Decay of authoritarian rule Authoritarian withdrawal and democratic transition Democratic consolidation Maturing of democratic political order

Of these, the first and second have received the most attention from the scholarly community (Shin, 1994: 143). More is likely to be known about the third and fourth stages as time goes by (Diamond, 1999). At the initial stage, a distinction was drawn between liberalization and democratization. Whereas liberalization encompasses the more modest goal of merely loosening restrictions and expanding individual and group rights within an authoritarian regime, democratization goes beyond expanded civil and political rights. As a political movement toward establishing a popular government, democratization involves holding free elections on a regular basis and determining who governs on the basis of these results (Shin, 1994: 142). Democratization, unlike liberalization, is a complex historical process consisting of several analytically distinct, but empirically overlapping, stages. In the logical sequence; they may run from the decay and disintegration of an old authoritarian regime and the emergence of a new democratic system through the consolidation of that democratic regime to its maturity. In reality, however, the process of democratization has often failed to progress sequentially from the first to the last stage. As Larry Diamond (1996) correctly observes, some democracies abort as soon as they emerge, while others erode as much as they consolidate. For this reason, democratization is no longer considered a linear process. Nor is it considered a rational process (Shin, 1994: 143; Karl and Schmitter, 1994). Democratic transition, the second stage of democratization, is a period of political uncertainty fraught with the risk of reversion. Uncertainty and contingencies may undo the inertia of democratic opening. This stage is often a hybrid regime where the old (authoritarian) and the new (democracy) may share power or coexist through either conflict or by agreement. This process is unstable and may be of short duration. Consolidation, the third stage of democratization, arises when the transition ends peacefully by adopting the new rules of procedural democracy. Democratic consolidation involves an increasingly "principled" rather than "instrumental" commitment to the democratic rules ofthe game (Whitehead, 1989). "Procedural" democracy is understood to include the holding of free elections to

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choose political leaders by the people. The procedural minimum of democracy comprises, according to Robert A. Dahl, eight institutional requirements: 1. 2. 3. 4. 5. 6. 7. 8.

Freedom to form and join organizations Freedom of expression Right to vote Eligibility for public office Right of political leaders to compete for support and votes Alternative sources of information Free and fair elections Institutions for making government policies depend on votes and other expressions of preferences. (1971: 3)

Democracy as an ideal type of "principled belief' system consists of both normative ideas, which specify criteria for distinguishing right from wrong and just from unjust, and the procedural notion of due process, which establishes and reinforces the rule of law principle. Principled beliefs, like those against slavery or for human rights, are often justified in terms of larger world views, but those world views are frequently expansive enough to encompass opposing principled beliefs as well. Principled beliefs mediate between world views and particular policy conclusions; they translate fundamental doctrines into guidance. for contemporary human action. Millions of people have died for their principled beliefs, and many people now alive are willing to do the same. Finally, changes in principled beliefs, as well as changes in worldviews, have a profound impact on political action (Goldstein and Keohane, 1993: 9). Globalization Globalization encompassed the third set of ideas that affected South Korean politics in the second half of the 1990s. It was timed with the triumph of capitalism and the demise of socialism in the post-Cold War security environment. Globalization includes a set of ideas and beliefs held by an individual policy maker or citizen. This idea of globalization is accepted by government leaders to redirect and rechannel government policies in an effort to promote economic reform, making the Korean economy more competitive. This makes South Korea continue to grow and make progress along the path of modernization and democratization. Whereas democratization includes "principled beliefs," globalization can be seen as including "causal beliefs." What, then, is globalization as an ideational system? The concept and theory of globalization will need further clarification. Nineteenth-century Europe's transformation and its affect on the world economy in the tradition of what Karl Polanyi ( 1957) calls "The Great Transformation," continues to repeat itself in different modes

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and fashions in the post-Cold War era. Others identify and differentiate the varying historical forms of globalization: premodern (before the 1500s), early modern ( 1500-1850), modern ( 1850-1945), and contemporary (1945-). They consider the latter as representing a novel condition in the sense of its imposing new limits on politics and new challenges for "civilizing" and "democratizing" globalization (Held eta!., 1999: 439--444). According to Anthony Giddens in his 1999 BBC lectures on globalization impact, "all the talk about globalization is only that-just talk," in the minds of some skeptics. But, "globalization is very real" in the minds of some radicals, "in the sense that its consequences can be felt everywhere" and that "the era of the nation-state is over" (2000: 1-2). As Thomas Friedman argues, "Globalization is not just a phenomenon and not just a passing trend. It is the international system that replaced the Cold War system .... Globalization is the integration of capital, technology, and information across national borders, in a way that is creating a single global market and, to some degree, a global village" (1999). Globalization from this perspective is simply the process of a greater integration of the world economy that exhibits varying socioeconomic and political dimensions with drastic consequences. Globalization as an ideal type has arisen from the increase in the sensitivity of the public to events in distant parts of the globe. It is a result of a decline in the costs of communication and transportation that in effect shrinks distance, making the world "smaller." Globalization is related to marketization, where multinational enterprises are engaged in the "geoeconomics" of a worldwide production and distribution system. Globalization is "exposing a deep fault line between groups who have the skills and mobility to flourish in global markets" and those who do not, "such as workers, pensioners, and environmentalists, with governments stuck in the middle" (Rodrik, 1997: 2). This suggests that geoeconomics in the new age of globalization and the geopolitics of the existing territorially based Westphalia system are on a collision course in the age of the information revolution. In the age of globalization, comparative advantage as the basis of the wealth of nations has given way to the competitive advantage that resides in superior productivity in assembling resources to create valuable products and services. In the old days, a nation's prosperity resulted from the possession of natural resources, such as land, minerals, or a pool of labor, giving the country a comparative advantage relative to other countries with less favorable endowments. In the globalized economy, however, business firms can "access resources from any location cheaply and efficiently, making resources themselves less valuable" and "with rapidly declining transportation and communication costs, even favorable geographic location relative to markets or trade routes is less of a source of advantage today than it was in the past" (Porter, 2000: 17). Countries that improve their standard of living, like South Korea in the new millennium, have business firms "that are becoming more productive through the development of more sophisticated sources of competitive advantage based on knowledge, investment, insight, and innovation" (ibid.).

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Globalization is a multifaceted and multidimensional process, not necessarily restricted to integration ofthe world economy. James Rosenau (1997) cautions not to simplify this complex process. He defines globalization as a boundary-broadening process that changes humanity's preoccupation with territoriality and the traditional arrangements of the state system. As such, globalization is inextricably tied to its opposite: localization, which is a boundary-heightening process. The boundary-broadening process of globalization allows people, goods, information, norms, practices, and institutions to move around oblivious to boundaries, while the boundary-heightening process oflocalization is designed to inhibit or prevent the movement of people, goods, information, norms, practices, and institutions. Obviously, tensions prevail between the dynamics of globalization and localization, but there is no inherent contradiction between the two, according to Rosenau. Globalization will eventually predominate. People and institutions must become accustomed to the multiple dimensions, complexities, and nuances of a world undergoing profound changes and avoid the danger of oversimplifying the discussion of globalization. Globalization is defined by Samuel S. Kim as "a series of complex, independent yet interrelated processes of stretching, intensifying, and accelerating worldwide interconnectedness in all aspects of human relations and transactions--economic, social, cultural, environmental, political, diplomatic, and security-such that events, decisions, and activities in one part of the world have immediate consequences for individuals, groups, and states in other parts of the world" (2000b: 7). This is a synthesizing view of how globalization can become an all-inclusive and all-encompassing set of complex phenomena in the modem-day world. Globalization is a set of causal beliefs that affect relationships and derive authority from the shared consensus of recognized elites, whether they be village elders or scientists at elite institutions. Such causal beliefs provide guides for individuals on how to achieve their objectives. Scientific knowledge, for instance, reveals how to eliminate smallpox or how to slow down the greenhouse effect in the earth's atmosphere. Under such conditions, the efficacy of individual action depends on support from many other people, and therefore on the existence of a set of shared beliefs. Causal beliefs imply strategies for attaining goals that are valued themselves because of shared principled beliefs and are understandable only within the context of broader worldviews (Goldstein and Keohane, 1993: 10). Globalization "takes us well beyond the world of self-contained states and their mutual relations with which the discipline of international relations has been centrally preoccupied" (Clark, 1999: 1). Globalization and international relations (IR) theory, however, "can profitably speak to each other," because, as Ian Clark notes, "this seeming contradiction is more apparent than real." One can avoid the excessive optimism of "hyperglobalist" arguments, which are based on the alleged "benign effects of globalization," as well as undue pessimism of "globaloney," the which is derived from alleged "malign effects of globalization" (1999: 1; Held et al., 1999). For instance, one of the few areas of minimal agreement among the experts,

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including IR theorists, concerns the polarization that globalization seems to entail (Cox, 1987; Mittelman, 1996). According to Held et al. (1999), the contemporary globalization debate has given rise to three contending schools of thought: hyperglobalists, skeptics, and transformationalists. Hyperglobalists foresee an end of the nation-state system, whereas skeptics contend that internationalization depends on state acquiescence and support. Transformationalists, in turn, argue that globalization will transform state power and world politics (Held et al., 1999: 10). Economically, globalization creates winners and losers, but polarities extend well beyond those who simply profit or lose by their position in the global market. They also incorporate ideas about access to global networks, lifestyles, and the security of cultural identities. Both the pessimists (globalonies) and the optimists (hyperglobalists) share a set of untenable assumptions about what it is that is driving globalization and how states relate to this process. Whether they regard the impacts of globalization as benign or malign, both camps are united in the belief that "globalization is a causal force that restructures state behavior from the outside." Once this assumption is clarified, the certitude of each argument will begin to modify (Clark, 1999: 168). From Tradition to Modernity: Sequence and Trajectories

In terms of the sequence of the rise and fall of these ideas and ideational systems, the concept of modernization appeared first, with the longest span in Korea's modem history, as it began to capture the imagination of the Korean leadership as early as the 1880--1890s' era in the Chason dynasty (Chandra, 1988). This idea of modernization was rekindled in post-World War II Korea, soon after Korea's liberation from the yoke of Japan's colonial domination (1910-1945). The company name of one of Korea's leading chaebol is Hyundai. It was founded by Chung Ju-yung as a family business and it literally means "modernization" or "modernity" in Korean (Kirk, 1994). The ideas of modernization and democracy were already familiar to the "enlightened" leadership in the 1880s and 1890s. Therefore, some would trace the origins of the ideas of modernization and democracy in Korea to points much earlier in history, like the Kaehywa Sasang (reform ideas) and Tongnip Hyophoe (Independence Club) movements in the 1880s and 1890s. Although those leaders were engaged in the worthy cause of saving the old order through reform, in the end they were unsuccessful. They were well aware of both positive and negative impacts of Western ideas on tradition-bound Asian societies, as manifest in the neighboring countries of China and Japan. Since the Korean people only regained their national sovereignty in 1948, following Japan's defeat in World War II, it makes sense to begin the study of the impact of these ideas on Korea with the start of modern nationhood. It was not until 1948, for instance, that the notion of democracy found its way officially into the provision of the ROK constitution.

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The concept of democratization was not taken seriously until the 1960 Student Revolution, which overthrew the First Republic of President Syngman Rhee. This led to the short ill-fated glimpse of democracy during the Second Republic under the Chang Myon government (Han, 1974). Democratization became the main focus of political analysis in the 1980s, however, when the antigovernment and prodemocracy movement, led by student leaders and opposition politicians, was determined to move South Korea away from an authoritarian political system ( 19621988) toward liberalization and democracy. The idea of globalization evolved recently in the post-Cold War era, when then ROK President Kim Young-Sam identified it as the central theme of his administration in the second half of the five-year term ( 1993-1998). Globalization reflects the growing interdependence and integration of the world's national economies. Modernization, as a set of ideas called worldviews, was largely alien to the traditional culture of Korea, but it came to be accepted among the intellectual elites who endeavored to diffuse them throughout the population. Modernization is mainly "the ideology of the politically alert, articulate, and active part of the population, particularly the intellectual elite" (Myrdal, 1968: 55). Modernization, both individually and as a system of valuation, is dynamic and interventionist, requiring changes through public policy, whereas traditional valuations associated with Confucian culture are static. Traditional society was based on agriculture; modern society is based on industry. This transformation made it possible for humans to control and shape their environment in totally unprecedented ways. It impacted attitudes, values, knowledge, and culture as modern Korean society emerged from an earlier society associated with the Choson dynasty. Since 1945, Korea has been a divided nation. Reunification of the two Koreas, the Republic of Korea (ROK) in the south and the Democratic People's Republic of Korea (DPRK) in the north has emerged as a continuing nationalistic aspiration and agenda of the Korean people. Nationalism and modernization are among the most potent ideas and value systems of the twentieth and twenty-first centuries. They are distinct in concept, but often reinforce each other in practice. Together, nationalism and modernity form an arena of tacit assumptions in which the vocal battle between political ideologies, such as democracy and communism, has been fought. Increased interaction of Korea with other modern societies will facilitate the transfer of techniques, inventions, and practices with speed. It may not generate a common or "universal" culture as a result, but it will certainly reinforce the unique character and characteristics of Korea as a modernizing society. A nation like Korea is a group of human beings who place their loyalty to the group above narrower competing loyalties. A nation-state is an independent state whose membership coincides with that of a nation. Nationalism is the desire to create, maintain, or strengthen such a nation-state. Ideas, interests, and institutions matter in politics because they are not only interrelated, but also mutually reinforcing. The ideas of democratization and glo·

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balization, for instance, have strengthened certain types of interest groups at the expense of others (Kitschelt et a!., 1999). Following the democratic opening of Korea, organized labor became increasingly vocal and militaristic in its demand for better working conditions and higher wages. The onset of the globalization agenda in the 1990s exacerbated labor and farm protest issues. The interests of both the chaebol (big business) and organized labor were adversely affected when the government launched reform-oriented economic policies. Other sets of ideas and ideational systems have and will impact government policy and the political attitudes and actions of the Korean people. Most notable are the themes of nationalism, independence, national unification, and human rights. Chondokyo (heavenly way), for instance, inspired the Tonghak peasant uprising and movement in late nineteenth-century Korea (Oh, 1999: 15-18). For the purpose of the present discussion, however, only three sets of ideas have been singled out for in-depth analyses and discussion. All successive administrations of Korea's Sixth Republic have deliberately adopted these ideas and put them into effect in modern-day Korea.

Conceptual Frame and Theoretical Baseline In order to sharpen the theoretical argument addressed by the central question "do ideas matter in Korean politics?" we proceed next to clarify several key concepts and terminologies as they are employed in the subsequent discussion. This will be followed by the ways in which these concepts have been applied to political analysis and an overview of the theoretical baseline of institutionalism as used in the present study.

Conceptual Frame of Ideas, Values, and Culture Ideas, values, and culture are interrelated, although each has its own definition and domain with a separate conceptual foundation. They are also interactive, as the subsequent discussion will show, in unique ways. It is imperative, therefore, to begin by clarifying first what is meant by each of the three key concepts of "ideas," "values," and "culture" in political analysis. In this endeavor, the discussion will proceed in three steps. First, the term "ideas" refers to a set of beliefs held by individuals. As such, ideas are often manifest in beliefs of individuals toward government and politics. They take the form of either elite attitudes or citizen opinions toward government policies and politics in general. Ideas, as an ideational system, constitute a set of values that make up a particular culture. Clearly, since the democratic opening in 1987, there have been noticeable and significant value changes in Korea. As Korea's civil society became more activated, there has been notable change in the character and role of civil-society groups from one of political protest to one of policy advocacy (Sunhyuk Kim, 2000: 137-149). While public space and civil society have already opened up since the days of

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the prodemocracy movement and democratic transition, civil society will continue to play an important role in the politics of democratic consolidation. A more effective coalition between civil-society groups and political parties is sought, for instance, although their relationship has so far remained ad hoc and temporary rather than institutional and permanent. Whether this interaction will lead to a culture shift in the form of institutionalizing democratic virtue in civil society, however, remains to be seen (Inglehart, 1990). Ideas reflect a set of values that, in turn, are derived from culture and cultural norms. Second, the concept of"values" is commonly used in the social sciences, but its definition is not always clear. The term "values" is often used in psychology, for instance, to refer to a "modality of selective orientation" (Williams, 1968) that is linked to individual-level preferences, motives, needs, and attitudes. Sociologists employ the term "value" as a social concept referring to norms, customs, manners, ideologies, and commitments. In economics, utility, exchange, and price are all related to values. One study identified no less than 180 different definitions of the term "value" based on some 4,000 publications (Kmieciak, 1996: 147). In the absence of consensus about the meaning of values across the social sciences or within any subdiscipline, a 1995 study of beliefs in government in post-World War II Europe framed values in terms of three concepts: values cannot be directly observed, values engage moral considerations, and values are conceptions of the desirable (Van Deth and Scarbrough, 1995: 28). This study examined the impact of values and changes in value on beliefs in government across western Europe from crossnational and longitudinal perspectives. Values were seen in this study as conceptions of the desirable. Values are not directly observable, but are evident in moral discourse and are relevant to the formulation of attitudes. For heuristic purposes, the study considered values as "hypothetical constructs which constrain attitudes" by arguing that "the claim for the empirical relevance of values is demonstrated by evidence of patterning among attitudes," which are called value orientations (46). Third, the term "culture" has many meanings with varying usages that emphasize "social organization, core values, specific beliefs, social action, or a way of life" (Kroeber and Kluckholm, 1952, as cited in Ross, 1997: 45). The reason for the lack of a clear definition is that for many years culture has been neglected in serious studies of social science because of its all-encompassing nature and characteristics, with the exception of anthropology, a discipline devoted to the study of culture. Most contemporary analysts begin with the anthropologist Clifford Geertz 's definition of culture as "an historically transmitted pattern of meaning embodied in symbols, a system of inherited conceptions expressed in symbolic forms by means of which men communicate, perpetuate, and develop their knowledge about and attitudes toward life" (1973: 89). Culture from this perspective is a worldview that explains how and why individuals and groups, as political actors, behave as they do. This includes both cognitive and affective beliefs about social reality and assumptions about when, where, and how people in one's culture and those in other cultures are likely to act in particular ways (Ross, 1997: 45).

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Culture is often treated by students of political science as either an epiphenomenon or a residual category of social and political analysis. Recently, however, there has been a revival in the cultural analysis of politics and economics, and the comparative study of politics and political culture has been on the rise (Harrison and Huntington, 2000; Inglehart, 1977, 1990, 1997; Lapid and Kratochwil, 1996; Lichbach and Zuckerman, 1997; Ross, 1997). Whereas anthropologists like Geertz emphasize culture as "thick description" and use it to refer to the entire way of life of a society, its values, practices, symbols, institutions, and human relationships, other social scientists use the term in a more subjective or intersubjective manner. In explaining how culture has affected political and economic developments of the tradition-bound Korean society, it is necessary to define it in purely subjective or intersubjective terms as the values, attitudes, beliefs, orientations, and underlying assumptions prevalent among people in a society (Harrison and Huntington, 2000: xi).

Cultural Theory and Comparative Korean Politics The question of ideas and values arises in the context of cultural theory and analysis of politics. The recent book Culture Matters: How Values Shape Human Progress (Harrison and Huntington, 2000) raises the question of how values shape human progress in modernizing society. It gives an affirmative answer to the question in an attempt to explain the causality and processes that link culture on the one hand, and economics, politics, and value changes on the other hand. The 2000 study is based on a series of twenty-two contributed essays. The findings of the study lead the editors, Lawrence E. Harrison and Samuel P. Huntington, to the conclusion that the study offers an important insight into why some countries and ethnic/religious groups have done better than others, not just in economic terms but also with respect to consolidation of democratic institutions and social justice .... [A]nd those lessons of experience, which are increasingly finding practical application, particularly in Latin America, may help to illuminate the path to progress for that substantial majority of the world's people for whom prosperity, democracy, and social justice have remained out of reach. (2000: 306-307) Since ideas and culture matter in Korean politics and economics will constitute the primary focus of this book, it seems appropriate to survey briefly the status and scholarship of culture studies in the social and political sciences. This will clarify the conceptual and theoretical issues of cultural politics. Cultural analysis is timely and justifiable, as Harrison and Huntington argue, because both Weber and Edward Banfield ' are the intellectual heirs of Alexis de Tocqueville, who concluded that what made the American political system work was a culture congenial to democ-

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racy; Max Weber, who explained the rise of capitalism as essentially a cultural phenomenon rooted in religion; and Edward Banfield, who illuminated the cultural roots of poverty and authoritarianism in southern Italy, [and they may be] a case with universal application. (2000: 301; Tocqueville, 1969; Weber, 1958; Banfield, 1958) What is cultural politics? The conventional wisdom in political science is that culture is not a helpful analytical tool for "empirical" research (Katzenstein, 1996: 2). If employed,' "culture" is more useful to analyze particular aspects of culture (like legal or social norms). More recently, however, political science has returned to the study of culture and identity, not only in American and comparative politics, but also in international relations (Ellis and Thompson, 1997; Huntington, 1997; Inglehart, 1997; Kertzer, 1988; Lapid and Kratochwil, 1996; Ross, 1997; Wilson, 2000; Wildavsky, 1987). Interest in culture as an explanatory variable began to revive in the 1980s, after a dramatic decline of work on culture in the 1960s and 1970s. Increasingly, social scientists turned to cultural factors to explain modernization, democratization, globalization, military strategy, ethnic group behavior, and foreign policy action and behavior of states (Harrison and Huntington, 2000: xiv). Cultural politics and political culture "broadly describe people who share values, beliefs, and preferences legitimating different ways of life" (Thompson, Ellis, and Wildavsky, 1990). Cultural politics orders political priorities (Latin, 1986: 11) and defines the symbolic and material objects which people consider valuable and worth fighting for. These include the contexts in which such disputes occur, the rules (both formal and informal) by which politics take place, and actors who participate in politics. Wildavsky argues that rational choice theorists make a serious error in taking interests as given, whereas an empirically based cultural analysis reveals systematic variation in interests across cultures (1987: 3-21). Thus, culture defines interests and how they are to be pursued (Ross, 1997: 46). Culture, as a system of ideas, beliefs, values, and value-orientation, has modern as well as traditional forms. For instance, in the Korean context modern culture is influenced by modernization ideas that were introduced from Western countries and adopted initially by Korean intellectual elites, but are now accepted by the broad population. Some aspects of the Korean culture, particularly those arising from a deeply ingrained Confucian tradition, may not conform to the value systems of modernity. Culture is changing, and the factors that lead to the cultural shift in modern and industrial society can be an important topic of investigation and inquiry in the social sciences. Related to the concept of culture are identities, interests, and institutions. Politics is taking place within the cultural and institutional context of groups that have separate identities, but together promote common interests through political action. This trilogy of culture analysis (identities, interests, and institutions) enables us to raise three interrelated questions in Korean political economy (Hall, 1997). First is the identity question of "who are we?" or "who are the Koreans as they are engaged in political activity, either individually or collectively?" Second is the

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interest question of "what do we want?" or "what values and interests do Koreans subscribe to and why?" Third is the institution question of "what should we do?" or "what should the Korean people do in (the process of) institution-building to promote their political and economic goals of modernization?" (Doyle, 1997: 22). These questions can help us understand and analyze important aspects of the pattern of political events of modern Korea in the decades since the democratic opening of South Korea (Kopstein and Lichbach, 2000).

New Institutionalism and Democratic Performance Since 1987, South Korea has embarked on new political experiments by adopting a set of formal institutions called "liberal democracy." Therefore, it is incumbent on us to examine how well the new rules of political game theory and democratic institutions have worked out for the Korean people during each of the successive administrations of the Sixth Republic of Korea. How do formal institutions influence the practice of politics and government in Korea? If reform measures are adopted, will they be effectively implemented and will new practices follow? Why is it that the institutional performance will depend on its cultural, economic, and political context? If democratic institutions are transplanted to new soil, do they grow in the new setting and environment? Or does the quality of a new democracy in Korea depend on the quality of its citizens and civil society, so that every generation of the Korean people gets the government they deserve? This book aims to clarify the nature and extent of the performance of democratic institutions in South Korea's Sixth Republic. Institutions, as regularized and stable patterns of social action, have been the primary focus of political analysis. The school of "new institutionalism" utilizes the tools of game theory and rational choice modeling by casting institutions as "games in extensive form," in which actors' behaviors are structured by the rules of the game (Moe, 1984; Ostrom, 1986; North, 1990a). The new institutionalism addresses the problems of both institutional design and collective action. Constitution building in the nineteenth century, in the tradition of John Stuart Mill's "Considerations on Representative Government" and constitutional engineering and amendments in the twentieth century, are manifestations of this institutional design focus by new institutionalism. How to design institutions that work and avoid the dilemma of collective action, as addressed in Elinor Ostrom's (1990) study on overcoming "the tragedy of the commons" to protect "common pool resources" is another manifestation of the concerns of new institutionalism (see also Israel, 1987; Putnam, 1993: 8-10). A particular theoretical baseline of the present study, which is named "historical new institutionalism approach," will trace continuities in government and politics with an emphasis on timing and sequences in institutional development (Putnam, 1993: 7). The following two key propositions of this historical new institutionalism, as concisely summed up by one recent study on civic traditions in modern

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Italy, are of particular value to the present study (7-8): (1) institutions shape politics because institutions, through rule-making, leave lasting imprints on political outcomes and mold actors' identities, power, and strategies and (2) institutions are shaped by history, as institutions exhibit inertia and "robustness" and, therefore, embody historical trajectories and turning points. The second proposition of new institutionalism will require further exposition. History matters because it is "path dependent." This means that in historical development, such as what the Korean people have gone through in their recent history, "what comes first (even if it was in some sense 'accidental') conditions what comes later." Individual actors in politics may "choose" their institutions, but they do not choose them under circumstances of their own making. Their choices in turn will influence the rules within which their successors will also choose (Putnam, 1993: 8). Institutions can be taken both as an independent variable and as a dependent variable. By taking institutions as an independent variable, one can explore empirically how institutional change has affected the identities, power, and strategies of political actors. Also, by taking institutions as a dependent variable, one can explore how institutional performance has been conditioned by history. However, as Robert D. Putnam cautions, institutional change is ultimately shaped by the social context within which institutions operate (1993: 8).U A few words on the question of methodology are in order. This book adopts a social scientific methodology that may be characterized as "syncretistic," as it aims to combine field research using observation and participation analysis, such as interviews and documentary reviews, with theoretical concerns. This study is not based on the "systematic" methodology of the social sciences that generates empirical data and rigorous analysis, such as survey data and statistical testing of information on a sample of the public. However, I acknowledge that a rational choice perspective, as applied in this study, may help explain the circumstances surrounding policy choices and decision making by Korea's various administrations. Policy making may be taken as a set of rational actions pursued and undertaken by decision makers who are operating within the context of interaction between culture and structure that is unique to the contemporary Korean society (Lichbach and Zuckerman, 1997). One branch of the rational choice theory includes both game theory and collective action, which can be applied to study democratization. In so doing, this approach will require identifying principal actors, their preferences, and the arenas of their interactions, such as the government and the ruling party in parliament, political oppositions, big business (chaebol), and labor unions. These actors are typically engaged in theoretical game situations whereby they pursue their respective interests on the agenda of reform. A "nested" game approach is particularly useful for an analysis of the ROK government of various administrations (Tsebelis, 1990; Jesse, Heo, and DeRouen, 2002)_12 Finally, the counterfactual reasoning and analysis regarding past events and scenario building for the future will be invoked to sharpen the discussion (Nye,

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2003: 50--53; Pollack and Lee, 1999; Chamberlin, 2001). In explaining policy choices, for instance, contrary-to-fact conditionals reasoning will illuminate the path-dependent nature of historical events in contrast to an alternative course of action that was not pursued by policy makers. In doing so, this present study will employ traditional and conventional research methodology and will rely heavily on the literature survey of social science theories and practices as well as utilize the published works and documents of newspapers, magazines, memoirs, and public statements. The policy making in South Korea's Sixth Republic was driven, in short, by the respective administration pursuing three principled ideas: modernization, democratization, and globalization. Each of these ideas has, in turn, acted as a "driver" of the process of socioeconomic changes and transformation of Korean society. Conclusion The key themes and motives of modernization have influenced the internal political dynamics of South Korea since the beginning of its modern statehood. The steadfast search for the ideas of modernization, and their implementation by political leadership, has worked to shape the collective identity and the interests articulated by the Korean people. This was followed, more recently, by the ideals of democratization and globalization. Since the 1987 democratic opening, with the subsequent globalization in the mid-1990s, South Korea has struggled to deepen democracy politically through consolidation and institution building, while also sustaining the pace of steady economic growth and continuing modernization. This process of transformation of the tradition-bound society began in 1962. The story of Korea's remarkable transition from authoritarianism to democracy, according to some, has not yet been fully explored using the theories and methods of comparative political inquiry (Shin, 1999). The story of South Korea's attempt to overcome the challenges of globalization in the world economy through structural reform and policy adjustments also continues (S. S. Kim, 2000a). Subsequent chapters will address the extent to which cultural politics prevails in South Korean society with its Confucian cultural norms and value system. The focus is on the decade of the 1990s in South Korea. This period includes both the onset of the post-Cold War era and the era of the third wave of democratization. What stands out is the smooth transition and difficult consolidation of democratization during each of the successive administrations of the Sixth Republic of Korea. Culture is manifest in the political life of the people and in the dynamic processes of political conflict and political change. In fact, cultural norms are inherited from generation to generation. Yet, cultural norms are not static, they are contested and contingent (Katzenstein, 1996a: 3). The continuing reconstruction of norms constitutes the political process. The Confucian cultural norm, as Chapter 2 will show, has shaped Korea's identity and interests and has informed government policies.

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As with other countries in Europe and Latin America, South Korea was the first new democracy in Asia to undergo the third wave of democratization. There were a series of popular demonstrations against the authoritarian regimes in Asia, starting with the Philippines in 1986, South Korea in 1987, Myanmar in 1988, China in 1989, Taiwan in 1990, Thailand in 1992, and Indonesia in 1998 (Freedman, 1994; Compton, 2001) Among these Asian countries, South Korea has become the first new democracy in Asia (other than the Philippines) that peacefully transferred power. It moved from the Fifth Republic to the Sixth Republic in 1988, and also from the ruling party to the opposition party in 1998 (see chapters 3, 4, and 5). The Republic of China (or Taiwan) soon followed the path of South Korea when the opposition party contested the general election in 1995 and successfully replaced the ruling party in the 2000 presidential election (Chu, Hu, and Moon, 1997). Prior to territorial partition in 1945, both North and South Korea shared a common culture: the cultural legacy and norm of Confucianism. One can safely assume, therefore, that Confucian cultural values provided the setting for modem Korea's interaction with the new Western ideologies of liberal democracy and communism, as well as the Western ideas of modernization, democratization, and globalization. The interaction between the two sets of modem ideas and traditional cultural legacies was bound to influence the attitudes and actions of both the elites and the general public of those living in the respective halves of divided Korea. When the ideas of modernization and democratization were put into effect in practical politics, some of the Western values and norms reflected in these systems clashed with traditional values and cultural norms (see Chapter 2). There has been a cultural clash between modernization and democratization ideals, and the familistic, hierarchical values of the indigenous traditional culture of Korea. This is only natural because the modern Western values emphasize individualism, while traditional Eastern values emphasize group and family. The only way to avoid the cultural clash and cultural war, in theory, is to allow and enable a cultural shift via careful institutional design. But this will take time and will require patience and careful nurturing. The Kim Dae-Jung administration was faced with the challenge of furthering democratic governance in the age of globalization and cultural politics. South Korea overcame the adversity of economic poverty and political tyranny through successful economic development and political democratization in the 1990s. Yet, the democratic government was exposed to deteriorating economic conditions that were associated with slow progress in economic reform and the impact of globalization. In this endeavor, the traditional cultural norms and values, which were premodern and nondemocratic, have provided the context for political action and behavior of both the elites and the mass public in transitional society. Historically, Korea has been a land of multiple religious faiths. Over the years, Korean culture and society have been influenced by the indigenous faiths of Shamanism, aiong with imported Buddhism and Christianity. Despite this fact, Con-

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fucianism has continued to play a dominant role in shaping the traditional Korean system of beliefs and values. The founder of the Choson dynasty, for instance, adopted Confucianism as the state religion and neo-Confucianism became the dominant system of ideas in that period. In the course of the late nineteenth century, with the arrival of Western ideas, the old Korea struggled but failed to reform its system or to overcome the challenges of rampant poverty and adversity. Only in the second half of the twentieth century was Korea able to start and pursue a program of modernization by putting its ideals and goals into effect. These ideas have taken hold of Korea and its people in the second half of the twentieth century. This book explores this process of political and institutional transformation of Korea.

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Part 1 Historical Context

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2 Taking Culture Seriously Confucian Tradition and Modernization

Heaven and earth are the parents of all creatures. Of all creatures, man is the most highly endowed.

The Analects of Confucius, Book I (Book of History) Confucian democracy may be a contradiction in terms, but democracy in a Confucian society need not be. 1

Samuel P. Huntington, 1991 There is not a single path to modernity [because] . .. the relationship between Confucianism and democracy is far more complex than many commentators have indicated. 2

Francis Fukuyama, 1995 Modem South Korea has inherited Confucian cultural norms and values from its past. In exploring this broader subject of Confucian cultural legacy, this chapter will examine the ways in which Confucian norms and practices have come to influence South Korea's search for modernization ideas and beliefs, especially in its attainment of political, economic, and social development goals. The next chapter will explore the more specific question of the cultural context for democratic consolidation, following the successful democratic transition. It will focus especially on the ways in which the civilian democratic regime has managed to put its policies and programs of democratic reform into effect. What is the proper role of Confucian culture and its social institutions in the process of modernization and democratization of Korean society? This is an important question that has contemporary significance and relevance because the Confucian cultural legacy is often credited with the remarkable success and transformation of some East Asian countries in recent decades into resilient political and economic systems. In answering this question, it is useful to separate Confucianism as an ideology and value system (the primary focus here) from Confucianism as a ritual and religion. Although Confucianism as a religion is no longer 39

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widely practiced in Korea, a substantial proportion of the population still seems to subscribe to Confucianism as a set of moral and ethical principles (Koh, 1996; Hahm, 1997; Robinson, 1991). Confucianism is a system of ideas and beliefs that advocates the theory of good government. As such, Confucianism has impacted Korea's statecraft throughout its history (deBary and Haboush, 1985; Deuchler, 1993; Palais, 1975, 1996). Confucianism, as a science and art of statecraft, promulgates a particular view of human nature and society, where the family is taken as a basic social unit. The Confucian state is the personification of family values and value orientation. The head of the household and the ruler of government are often equated in terms of their leadership roles and role performance. The cultural legacy of Confucianism in East Asian industrialization was evaluated negatively in the past but more positively in recent years. It is more accurate to say that Confucian norms and values did not cause the economic miracle of the East Asian industrialization. Instead, its cultural legacy has provided the context for the miracle of rapid industrialization and socioeconomic transformation. The Confucian cultural legacy helped South Korea attain its economic miracle through indirect rather than direct ways. Likewise, the impact of the Confucian legacy on authoritarianism and democracy has been much debated with conflicting interpretations. Whether and how political leadership can play a role in changing culture is disputable at best. This chapter will explore how the South Korean state has reconciled its inherited traditional cultural norms and values with the acquired ideas of modernization and democratization. There is a complex interplay of cause and effect between culture and progress (Harrison and Huntington, 2000: 300). Culture affects society's achieving, or failure to achieve, progress in economic development. As such, culture can be an independent and intervening variable that explains the outcome of progress and prosperity. Culture can also be a dependent variable in that, once economic development goals are attained, culture begins to shift and change. Societies also change their culture in response to major trauma, such as the Korean War (1950-1953) experience or the experience of Japan and Germany after World War II. The security cultures of post-World War II Japan and Germany, for instance, changed away from militarism toward pacificism (Katzenstein, 1996a). Culture is path dependent. The fact that a society was historically Confucian gives rise to cultural zones, with distinctive value systems that persist when the effects of economic development are controlled. But development is also linked with predictable changes away from traditional norms, toward modernization ideas (Inglehart, 2000: 80). To explore this interplay between Korea's traditional values and modernization as well as democratization ideas, we will turn next to an articulation of Confucian cultural norms and values in more detail. Cultural analysis of Korean politics and economics necessitates an articulation of Confucian norms and values first, and then an examination of the impact of these

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values on the making and constituting of political and social institutions. For this reason, this chapter will examine the Korean Confucian tradition in four parts: (1) what the cultural legacy of Confucianism is in the context of Korean tradition and modernity; (2) what substantive political ideas Confucianism as a value system represents and advocates; (3) how Confucianism reinforced the ideas and values of Korean modernization, with regard to politics in the era of authoritarianism and democracy; and (4) how to evaluate the alleged contribution of Confucian culture to Korean modernization, especially in terms of linkages between Confucianism on one hand and economic development and political democracy on the other. 3

The Cultural Legacy of Confucianism The influence of Confucianism on Korea's traditional culture was both profound and pervasive. During the Choson dynasty (1392-1910), neo-Confucianism was clearly "an intellectual, aristocratic and academic ideology" of the Yangban ruling class, and as such "its influence on the life and thought of Korean society has, indeed, been profound." As Hyon Sang-yun claims, in his celebrated work Chason Yuhak-sa (The History of Korean Confucianism), Confucianism "gave direction to Korean philosophy and character to the nation and it wrought important national changes, politically, culturally, and economically" (Hyon, 1949, as cited in Yi Sang-un, 1966: 113). The question of Confucianism's role in the historical transformation of Korean society, such as during the late Choson dynasty at the tum of the nineteenth century, has been actively debated and critically assessed by many. The ideology of Confucianism, as transplanted to Korean soil, continued to bloom and flourish through history, much like the other major philosophies and religions of Shamanism, Taoism, Buddhism, and Christianity. Confucian cultural influence on Korean society, however, has received greater critical attention in terms of both its positive and negative legacies. According to Hyon, some of Confucianism's influence "can be considered as both a service and disservice to Korea" (quoted in Yi Sangun, 1966: 113). Included in the list of Hyon's merits of Confucianism are encouragement of learning (of the superior man); respect for ethics and morality; and respect for probity, loyalty, and righteousness. The threefold virtues of Confucianism, in Hyon's own words, are: kunjahak, yunli dodok kwan, and ch 'ong ryom cholui. The English translation of these terms comes from Yi Sang-un, whereas Michael Robinson translates these Korean words as: industry of men of virtue, high regard for virtue and humaneness, and respect for law (1991: 212). The negative impact of Confucianism according to Hyon's list, on the other hand, includes: 1. Veneration of China 2. Factionalism 3. Family-ism (or clanism)

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4. 5. 6. 7. 8.

Class notions Literary effeminacy Weakened commercial-industrial capacity Reverence for titles Reverence for the past (Yi Sang-un, 1966: 114)

The eightfold defects, in Hyon's own words, are: mohwa sasang, tangcheng, kachokchuui, kyekup sasang, munyak, sangkong yonyak, sangmyong chuui, and pokko sasang. In presenting these pro and con views of Confucian legacies, Hyon seems to reflect the historical time and process of which he was a part. Clearly, Hyon's generation lived through a historical period of hard times: years of weakened national identity, the colonial domination before 1945, and the chaos ofpostliberation Korea. Hyon's criticism, not surprisingly, was largely focused on the alleged defects and negative legacies of Confucianism as traditional culture. Perception or self-perception of Confucianism has thus varied over time. This is especially true in the twentieth century as the Koreans experienced tumultuous historical episodes of colonialism and national division. Many intellectuals, for instance, blamed Confucianism for the loss of Korea's independence and sovereignty and Korea's failure to attain modernization at the turn of the nineteenth century. Hyon's aforementioned accounts of "good and evil" aspects of Confucianism were not only exaggerated and self-serving, but also "flawed," as Robinson notes, even as his ideas "reflected a general consensus among many intellectuals at the end of the colonial period" and the post-World War II era (1991: 214). The question of Confucianism's appropriate role in modernization has not been settled by any means. For instance, many Western observers, including Max Weber, held the view that "Confucianism was a hindrance to economic development" because of "the failure of a country like China or Korea to achieve an economic breakthrough at a time when Confucian influence in the society was at its peak" (Weber, 1951; Eckert et al., 1990: 41 0). This is a rather simplistic view that requires further explanation. It was not so much the ideology of Confucianism as the sociology of the existence of a powerful land-based aristocracy that seems to have hindered the process of modernization in Korea. The historical reality was that the Choson state's Yangban elite, who were well-educated neo-Confucians, "were basically opposed to economic and social reform on solid neo-Confucian grounds" (410). Moreover, there has been a revival of interest in this question of the proper role of Confucianism in the process of Korean modernization (Ahn, 1992). Today, a more positive assessment is given to Confucianism, in a time when rapid socioeconomic and political developments characterize not only South Korea, but also many other East Asian countries (Rozman, 1991). Many of the so-called typical Confucian values, now seen as factors in South Korea's rapid economic growth, include (1) filial piety and family loyalty, (2) a perception and acceptance of the state as an active, moral agent in the development of society, (3) a respect for

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status and hierarchy, (4) an emphasis on self-cultivation and education, and (5) a concern with social harmony (Eckert et al., 1990: 409). Although many of these values were already present in varying degrees in Korean culture through the ages, "what the Choson state's adoption ofNeo-Confucianism seems to have done," as Carter J. Eckert et al. argue, "is to have given these values a more richly constructed philosophical framework and to have diffused them throughout the society at much deeper levels than ever before" (409-410). It is safe to assume that all walks of Korean life today, including politics and economics, are visibly affected by Confucian cultural values, norms, and mores. Clearly, there is need for a reexamination of the extent to which tradition and modernity interact to influence contemporary politics and economics. Therefore, the subsequent discussion will explore the ways in which the living tradition of Confucian cultural mores has worked to influence the political process in South Korea, especially in an age of democratic transition and reform politics. However, we will first raise several conceptual and theoretical questions regarding the basic premise and framework for analysis, followed by a discussion of the political theory and practice of Korean Confucianism and modernization of South Korea.

Politics and Culture: Old and New Since politics is both an art and a science, as Aristotle observed a long time ago, it can be learned as a skill and as a body of knowledge that can be put into practical use. Political leaders, before getting ready to govern the land, must acquire not only the knowledge, but also the skill of how to rule the people in the state. Both theories of the social sciences and teachings in classical literature, such as Confucianism, are part of a politician's moral education. The challenge of political leadership, whether politics is conducted in a traditional and agrarian society or in the modern industrial state or democratic society, is to master the art of statecraft and governing that can meet effectively both the expectations and the demands of the governed. Politics, from a social science perspective, can be conceived as an act of authoritative allocation of values for a society that deals with the basic questions of political order, justice, and the common good. Power, authority, and rulership are the key values and dominant concerns in politics. Hence, any attempt to uphold the law and order as well as social justice and public good in society will fall into the legitimate domain of politics. Any activities in society that involve and entail the relationship of power, rule, and authority are, by definition, political in nature. There are a variety of meanings of culture as already noted in the preceding discussion (see Chapter 1). Culture, in a broad sense, represents a way of life and the artifacts produced by a society at a given point in time. Values, norms, and institutions (such as family and school) are tangible evidence of culture in a society (Geertz, 1973). Culture, as a behavioral concept, may also mean "the publicly available symbolic forms through which people experience and express meaning"

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(Swidler, 1986). As Ann Swindler argues, "culture influences action not by providing the ultimate values toward which action is oriented, but by shaping a repertoire or 'tool kit' of habits, skills, and styles from which people construct 'strategies of action'" (1986: 273). A renewed emphasis on culture has emerged to play a central role in contemporary social science (Wuthnow and Witten, 1988; Huntington, 1997). This new analytical perspective, apart from the prevailing interpretative approaches popularized by anthropology, has dealt with such questions as how cultural elements constrain or facilitate patterns of action, what aspects of a cultural heritage have enduring effects on action, and what specific historical changes undermine the vitality of some cultural patterns and give rise to others. Two distinct features of culture are relevant to comparative political analysis, as Marc Ross ( 1997: 42) argues: culture as "a system of meaning that people use to manage their daily words" and culture as "the basis of social and political identity that affects how people act on a wide range of matters." Culture, in short, is "a framework for organizing the world, for locating the self and others in it, (and) for making sense of the actions and interpreting motives of others ... "(Ross, 1997: 42). From a more theoretical perspective, three different notions of culture may be identified. First, culture may mean "a system of attitudes, values, and knowledge that is widely shared within a society and transmitted from generation to generation" (lnglehart, 1990). The way in which South Koreans respond to any given situation, in terms of individual or collective human agents making rational choices, is shaped by subjective orientations derived from cultural norms and values. Second, culture may mean "the presuppositions of social meaning" often embedded in language and action relative to the authority and the participation of an individual vis-a-vis the group. Third, culture also means "the socially recognized elements of meaning" attached to symbols and signs in society, such as the nation, people, the state, and so forth (Benjamin and Duvall, 1991). Confucian norms and values are one of those cultural mores and legacies that shape strategies of action in contemporary South Korean society. Other traditional religions, including Shamanism and Buddhism, and the contemporary religion of Christianity have also worked to influence and modify human actions and institutions in South Korea. The ideas of liberal democracy and the ideology of nationalism have also affected the contemporary beliefs of many of the country's leaders and citizenry. An ideology, as Swidler notes, represents "a highly articulated, selfconscious belief and ritual system, aspiring to offer a unified answer to problems of social action" ( 1986: 279). Ideology, in this sense, may be thought of as a phase in the development of a system of cultural meaning. Political Doctrines and Practice of Korean Confucianism Korean Confucian culture drew a sharp contrast between the Yangban aristocracy, both civilian and hereditary, and the Sangmin commoners. The slaves also consti-

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tuted the social class at the bottom of the scale. Other social classes were the merchants and artisans, as well as the outcasts, who were typically lower in status than commoners. The business of government was an exclusive domain and responsibility of the Yangban aristocracy. Confucianism in Korea expected that the superior man, by virtue of his enjoying the mandate of heaven, must rule with the help of the professional bureaucracy of scholar-gentry and degree holders whose descendants, in turn, became a hereditary aristocracy (Palais, 1975: 6-9). Although the recruitment of the civil bureaucracy, in theory, was open to all, by virtue of a competitive civil service examination system implemented early in the Choson dynasty, commoners were excluded from participation in state affairs for all practical purposes. The scholar-gentry claimed the right to rule the state by virtue of mastering scholarship and displaying intellectual competence. This system of competitive elite recruitment, based on merits, seems to have been rational. Yet, the fact remains that only the Yangban class offspring, based on access to privilege and birth, were able to take advantage of the opportunity for learning and scholarship. In this sense, Korean Confucianism became embedded into an elitist political structure that, by definition, was antiegalitarian in political orientation.

Confucianism as Political Ideology Confucianism, as an embodiment of the teachings of Confucius (552-479 B.c.), represents the art and science of good government. The name Confucius, by which he is widely known in the West, is a Latinized form of Kong Fuzi (Master Kong). His teaching is recorded in various works, including The Analects of Confucius (Lun Yu) (Huang, 1997). It is based on a body of ethical and moral principles that the prince and monarch must learn to master so as to govern the land and to rule the people. In this sense, Confucianism is a political theory and practical source for rulers. Confucianism as the political ideology of the Choson dynasty was a conservative doctrine based on the notion of promoting moral-ethical principles and social institutions for maintaining peaceful political order and social harmony. The ideology of Confucianism also reflects "a hierarchical society in which authority [is] tempered by benevolence downward and reciprocal loyalty and submissiveness to the state from below" (Robinson, 1991: 205). Politics, as defined by Confucian theory, is an integral part of "a universal social system regulated by certain values and harmonized by adherence to well-defined norms" (205). Confucianism was a static system rather than the system of change that reform entails. Confucian virtues of loyalty and filial piety, for instance, contributed to the creation of a social ethos that fostered stability and predictability. According to this ideology, a centralized state should be governed by a benevolent ruler with the help of his loyal ministers, whose rule is sanctioned by an ethically grounded rational view of the harmony of the universe and human beings (Chung, 1994: 2). Confucian cultural norms give greater emphasis to the institutions of family,

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Table 2.1

The Cultural Mores and Legacies of Confucianism Confucian Value System

Cultural Mores and Legacies

Harmony in Human Relations Three Bonds (ruler-minister, parent-child, husband-wife) and Five Relations (ruler-subject, father-son, husband-wife, elder-younger brothers, friend-friend)

Hierarchy in Status Family-centric Group norms Authoritarianism

Value Orientations of: Loyalty Filial piety Humanity, respect, trust

Reciprocity Bonds: family, clan, kinship, school ties, regional ties

The Princely Virtue Ethical government The Mandate of Heaven Doctrine of the Mean

Virtuocracy (statecraft): Legitimacy Reform

Political Doctrines of: Self-cultivation Family regulation Political rule

Moral education Examination hell Anti-corruption moves

social harmony, respect for education, and "moral" political and economic order. Table 2.1 shows how the Confucian value system fostered the cultural mores and legacies in contemporary society. Confucius said in the Analects that he was merely a transmitter of the ancient sage tradition of wisdom and knowledge. He saw the world as "good" and as transformable through education. The essence of Confucianism is a hierarchical status principle in social relations governed by the so-called three bonds and five relations, as shown in Table 2.1. In the Confucian system, morality and politics are inseparable because an essential link exists between the self, family, society, and the state. This entails the political doctrine of self-cultivation, family regulation, social harmony, and political rule. Intellectuals, according to the Confucian philosopher Mencius, are the masters of culture and, therefore, they must maintain the basis of moral and political leadership in the state. The "Confucianization" of Korean society took place over time, starting as early as the Three Kingdom era (before A.D. 668). Neo-Confucianism was introduced to the Koryo dynasty (918-1392), during the Mongol influence in the thirteenth and fourteenth centuries, and in the early part of the Choson dynasty. This ideology affected all aspects of society, including education, government, family, funeral and mourning rites, and ancestor worship (Haboush, 1991: 84--110; Deuchler, 1993). The neo-Confucian scholar-officials, who promoted the teaching of Confucius as interpreted by the various disciples and schools, administered the affairs of the

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state in the Choson dynasty. Neo-Confucianism, as an intellectual school in Korea, stems from the teaching of Chu Hsi (1120-1200) and his followers in the Song dynasty (960--1279). An Hyang ( 1243-1306) and Paek Ijong (fl. 1310--1320) introduced neo-Confucianism to Korea from China near the beginning of the fourteenth century. It was not until the end of the century, however, that the school of neo-Confucianism was strong enough to counterbalance Buddhism, the reigning ideology of the Koryo dynasty (deBary and Haboush, 1985: 73). 4 Neo-Confucianism added both a philosophical and religious character to Confucianism, explaining the origins of man and the universe in metaphysical terms. The political and moral precepts of traditional Confucianism were now exposed to the philosophy and metaphysics of Taoism and Buddhism, as well as the native religion of Shamanism, that had been widely practiced in society. Confucianism had broad appeal as the teaching of political ethics that stressed the mutual relationship of ruler and subject. Neo-Confucianism soon became an intolerant doctrine that was quick to reject all other teachings, including Buddhism (Eckert et al., 1990: 102).

Confucianism as a Political Movement With the seizure of power by General Yi Songgye in 1392, many of the scholargentry class worked to establish neo-Confucianism as the state ideology, the dominant system of beliefs and values about man, society, political legitimacy, and authority. Chong Tojon (1342-1398) was the leading figure among Confucian literati who played the key role as architect of the new government by providing a blueprint for the polity and social order of the Choson dynasty. Most of his writings later formed the basis for the final codification of Kyongguk taejon (Great Statutes for the Governance of the State) completed in 1471. This became the basic constitution of the Choson dynasty (Chung, 1994: 59-60). The founding of the Confucian state in 1392 meant that the new literati class of scholar-gentry was now empowered to administer a bureaucratic state. So long as the ruling class remained intact and unified, the Confucian state was civil and an exemplar of a well-managed polity in search of higher moral and ethical order. However, the Choson dynasty was soon engulfed in the literati purge and factional strife among the ruling elite (Wagner, 1974). The contending issues were not so much on the substance as on the rituals and interpretations of the dogma and teachings. Instead of rule by meritocracy, based on open competition and the civil service examination, factionalism, based on lineage and personal following, came to rule the land. The result was a long year of bloody literati purges and factional strife (S. Lee, 1992; Wagner, 1974). In the course of the seventeenth and eighteenth centuries, however, some disgruntled neo-Confucian scholars, who were largely excluded from important government positions, forged a new intellectual movement called Silhak (Practical Learning). Their intent was to bring about changes in the stagnant political and social order by inaugurating practical reforms in farming.

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Such Silhak thinkers as Yu Hyongwon (1622-1673) advocated a "public land system" under which the state would hold title to the land and allocate a fixed amount to each farmer (Palais, 1996). Others, like Yi Ik (1681-1763), proposed an "equal field system" that would guarantee in perpetuity to each peasant household the amount of land minimally necessary to maintain its livelihood, and Chong Yag-yong (1762-1836) urged adoption of a "village land system" whereby land would be owned and tilled in common by each village unit. The harvest then would be apportioned on the basis of the labor actually performed by each individual (Eckert eta!., 1990: 166).The notion offarmers who till their own land was clearly progressive as a reform movement. Thus, the record of nee-Confucianism as a political movement was a mixture of success and failure. As an idea system, neo-Confucian ideology stood for a moral and political order that laid the foundation for a stable and harmonious society. As a practical system, the Confucian state of the Chason was clearly less than perfect, with a stagnant economy and factional strife that sapped the energy and creativity of the population. The result was that the Chason dynasty was soon exposed to the harsh reality of the external danger of power politics, where the great powers waged war and vied for domination and conquest in the nineteenth century. The Chason state soon fell victim to the wars of imperialism and became a colony of Japan in 1910. The reigning political doctrine of the administration in the Confucian state was the so-called three-fold emphasis on kyongse (to manage the world or the economy), chemin (to save the people), and ch'iguk (to rule the country). Whereas kyongse refers to the business of managing the world, chemin means how to save the people and ch'iguk means how to rule the country (Chung, 1994). One can draw a parallel between the statecraft of the Chason dynasty and that of the Sixth Republic of Korea, to be discussed in subsequent chapters.

Confucianism as a Political System The all-encompassing and comprehensive nature of Confucianism as an ideology, and nee-Confucianism as a philosophy, makes it difficult to separate politics and society. An ideal image of the Confucian state, simply put, is the family-writ-large, where the emperor or the monarch is, figuratively speaking, the father of the state, and the subjects are considered children. The moral and ethical principles of the family should, in turn, apply to the Confucian state and society. As a political system, Confucianism envisions, according to Robinson, "a harmonious state in which monarchical authority was articulated through civil bureaucrats governing society," legitimating "kingly authority ... [based on] the rule of virtuous men ... [and] selecting officials on the basis of merit" (1991: 204-205). To the extent that Confucianism was adopted as an official ideology of the state in the Chason dynasty, its influence was far reaching in terms of affecting not only the thinking of the Yangban ruling class, but also the ways of life in traditional

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Korea. Neo-Confucianism, as a more theoretical and rationalistic formulation of the Confucian precepts, provided an important intellectual, ethical, and spiritual principle to the Choson dynasty (de Bary and Haboush, 1984). Neo-Confucian thought and institutions, through their dominance in past centuries, have thus come to influence the process of modernization and to shape Korea's changing national identity for the past 130 years of history. The political system of the late Choson state, on the eve of Korea's encounter with the outside world in the 1870s, was a Confucian state with a monarchy and a bureaucracy. The hereditary Yangban aristocracy, which monopolized access to political power through the recruitment of scholar-gentry to serve the state, tempered the power of the throne. A symbiotic pattern evolved to define the nature of the relationship between monarchy and aristocracy. As historian James B. Palais observes, "The king remained the best source of legitimacy for aristocrats and bureaucrats, and the social elite guaranteed the perpetuation of the monarchy" (197 5: 5). The result was a delicate equilibrium whereby "the balance of forces was never destroyed" even if "the state of equilibrium might shift from one pole to another-from relatively strong monarchy to aristocratic-bureaucratic domination of the throne" (5). The Confucian state of the late Choson dynasty was a sui generic bureaucratic state. What made it noteworthy was that, although highly bureaucratic and centralized, a degree of checks and balances was exerted by the Yangban aristocracy in the civil society. As Palais described, the "interrelationship between a monarchical, bureaucratic, and centralized government structure and an aristocratic and hierarchical social system" produced a long peace and stability of the Choson state that spanned over five centuries. There was no political decentralization or growth of feudalism, [such as in Tokugawa Japan,] because the aristocracy identified with the centralized structure as bureaucrats and used it to maintain their social and economic privileges .... On the other hand, the centralized and autocratic government structure obscured the reality of aristocratic power, [and i]n fact, the social elite controlled the bureaucratic structure, kept it relatively weak, and used it to check royal authority. (1995: 4-5) Out of this historical experience of Confucian statehood, a unique style and motif of political culture has evolved. Lucian W. Pye's observation on contemporary Korea makes the point that "political power is extraordinarily sensitive to cultural nuances" and therefore "cultural variations are decisive in determining the course of political development" (1985: vii). The Korean political culture, in short, was molded by Confucian norms and values. 5

Modernization, Authoritarianism, and Democracy Transforming a tradition-bound, Confucian political order, via socioeconomic development, into a modern democratic political system was the challenge and source of inspiration for many intellectuals in the twentieth century. Yet, Korea

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was denied an opportunity to participate meaningfully in the task of modernization and "democratic" political development because of an unfortunate historical condition at the turn of the twentieth century that resulted in the loss of national sovereignty. The status of Korea as colony of imperial Japan (1910-1945) and Korea's truncated historical process after 1945 did not permit a normal search for modernization and democracy until the late twentieth century. Obstacles interfering with this process included colonial struggle against Japan, territorial partition, an ideological bifurcation of the nation after World War II, an internecine civil war between the two halves, and inter-Korean rivalry and estrangement. However, under the condition of divided nationhood the task of economic development and modernization was taken over by the political leadership of the Republic of Korea, especially in the postKorean War years, that was actively pursued with considerable success (Kihl, 1984). Authoritarianism was clearly the dominant political force until 1988. Since the democratic opening in 1987, however, political life moved toward democracy and away from authoritarianism, led by reform-minded political leaders and radical students (Kim and Kihl, 1988). The ideas of modernization and democratization have eventually become the twin historical forces of the last decade of the twentieth century.

The Political Economy of Development Modernization was attained through industrialization of the economy as well as through export-led expansion and economic growth. The timing of this economic development was historically affected, as the country was undergoing a late, late industrialization of its economy (Amsden, 1989). The country's industrialization and entry into the capitalist world economy was dictated by the geopolitical and historical conditions of a newly independent yet divided nation-state after World War II. As a capitalist developmental state, South Korea switched from importsubstitution to export-led industrialization of the economy in the 1960s, with the help of a strong authoritarian state (Haggard, 1990: 51-75). During this time, the state-led and dominating, rather than the market-led and driven, process of economic growth was the rule rather than the exception. South Korea's "economic miracle" was engineered by the authoritarian regime of a capitalist development state, characterized by tendencies of government intervention in the market, a high degree of state autonomy vis-a-vis civil society, and an efficient bureaucracy (Johnson, 1989). The authoritarian regime acted torepress and exclude certain popular sectors in civil society, denying their active and participatory role in politics. Organized labor, for instance, was deprived of the right to collective bargaining and political mobilization. Political opposition and the regime faced each other as ins and outs and their relationship was confrontational. The authoritarian state, with all that it controlled, was too strong for the weak and divided opposition.

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Once South Korea achieved industrialization, it was only a matter of time before civil society became strengthened and the social sectors also became activated politically (Koo, 1993). The politics of reform became the agenda in the postauthoritarian and post-Confucian society in the 1990s. The enlightened public no longer accepted the bureaucratic authoritarian regime. Democracy and a postdemocratization regime persisted. This new democracy came to enjoy legitimacy and a substantial mandate for carrying out political reforms and preparing for a just society and a welfare state with a promising future. In this new age of a strengthened and activated civil society, a strong developmental state seemed no longer possible or viable. A return to authoritarianism was unlikely and would not be tolerated by the general public. A continuous transition into a period of secure democracy was more probable. With the lessened role of the state in the market and an enhanced and strengthened position of interest groups in civil society, a period of more dynamic and open politics, with greater citizen participation and movement, eventually dawned. This suggested that an era of more stable and less dramatic growth of the economy perhaps lay ahead for South Korea in the era of economic globalization.

Democracy, Modernization, and Development The process of political change from authoritarianism to democracy in South Korea was not easy or smooth, as chapters 3 and 4 will show. Under Roh Tae-Woo's presidency the country was making a new beginning toward democratization, overcoming the perennial legitimacy crisis, and under President Kim Young-Sam South Korea entered a new era of democratic consolidation with greater and restored legitimacy as a newly elected civilian democratic government (Cotton, 1993). While the initial purpose of economic modernization and development was easily attained through industrialization, it has been more difficult for Korea, as a postConfucian society with a paternalistic culture, to achieve political modernization and development via liberal democracy. 6 A debate has arisen among the East Asian area studies specialists, for instance, as to whether attaining the goal of modernization and development was possible for a country like the tradition-bound Korea because of its unique "patrimonial" cultural traits and historical experience. According to sociologist Norman Jacobs, for instance, the Korean road to modernization was characterized by what he called a "patrimonial" culture trait or a "patrimonial social order" in which "the primary social unit is not an organized group of warriors bound by social ties of defined rights, privileges, and obligations between superiors and inferiors, but a civil bureaucracy whose subordinate members owe open-ended obligations to superiors who may not, and usually do not, offer their subordinates reciprocated rights or privileges" (1985: 1). Some argue that modernization and development are not necessarily synony-

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mous or compatible and that Korea's patrimonial culture will inhibit a genuine political development leading to democracy. In Jacobs's view, modernization and development must be differentiated, in that Korea's attaining modernization does not necessarily mean that it has also attained development. Modernization in Jacobs's view is "the introduction of novel means in order to improve a society's performance, but with the aim that those changes do not challenge, and in fact reinforce, certain cherished goals and organizational procedures." Development reflects "the maximization of the potential of a society, regardless of the society's existing goals and organizational procedures" (1985: 6). South Korea has attained modernization economically and politically, according to this view, but it has not succeeded in attaining the goal of political development and democracy. Korean Confucian culture, according to this interpretation, would reinforce patrimonial ties that, in turn, would determine the shape and pattern of political culture and institutional practices. The political authority in Korea, according to Jacobs, was one formal "patrimonial apparatus" that was manipulated by the leader and his staff. Under such an arrangement, political power would tend to be highly centralized and the bureaucracy would become strong as an administrative instrument of governance, while local authority and communal organizations would remain weak (Jacobs, 1985: 14-23). Factionalism was also rampant and pervasive in the center of the political arena. Jacobs's interpretation of the Korean political culture, insightful and interesting as it is, requires caution because it carries with it an aura of determinism. Jacobs substantiates his "patrimonial" views on Korean culture with some historical illustrations. He relies on the notion of "catharsis" as central to the Korean mind-set. As Jacobs argues, even the Korean response to the challenge of modernization had been one of "cathartic" reaction. In general, his analysis of the Korean mind-set of catharsis as applied to politics seems logical. The Silhak movement was often a reflection of the philosophy of catharsis, according to Jacobs, and the Taewon'gun's Yusin, in response to internal and external pressures in the 1860s, was likewise largely a "cathartic reform" (1985: 279-282). Finally, the political movement and reform in Korean society had been, according to Jacobs, one of "cathartic rebellion and resistance" marked by the failure of genuine revolution. The reform movement, Jacobs continues, typically started as a moral renovation against corruption, but usually ended up as less than a moral crusade and revolution (288). But Jacobs may go too far, because culture as a living tradition constantly evolves, shaping strategies of action. One does not need to take a philosophical position of cultural determinism, as implied by Jacobs's patrimonial interpretation of Korean culture. There is a tone of pessimism and determinism regarding the possibility of the Korean state, with its "patrimonial" and Confucian culture, ever successfully attaining the goal of political development leading to democracy. For instance, the theme of a cathartic response to reform agendas, interesting as it is, must be revisited in the light of what the respective administrations of the Sixth Republic of Korea have attempted to do in carrying out their reform agendas. This will be discussed further in Chapter 4.

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Prelude to Democratization? Since the political opposition was weak and divided, the challenge was to strengthen the role and position of political opposition vis-a-vis the state and regime. The relationship between regime and opposition in authoritarian politics has been lopsided in favor of the ruling party. Under democracy, however, political opposition is expected to play a more positive and constructive role as a balancer of the social equilibrium, a task difficult to attain in the Confucian culture zone (such as in China and Singapore) and in the post-Confucian society of Korea (Moody, 1988). Yet, deepening legitimacy problems of the authoritarian rule ofYushin Korea (under President Park Chung-Hee) and its successor regimes in the Fifth Republic (under President Chun Doo-Hwan), combined with rapid economic growth in the post-1962 period, set the stage for the political miracle of democratization and democracy building that unfolded in the 1990s. The march toward democracy was supported both by populous sectors and external forces. As Chapter 3 will show, South Korea became one of the successful cases of democratic transition, a third wave democratization of the late twentieth century in the post-Cold War era (Huntington, 1991 ). South Korea shared a set of commonly held characteristics with other similarly situated bureaucratic, authoritarian, yet newly industrializing, states that facilitated the process of political transition toward democracy. According to political scientist Samuel P. Huntington, the following five factors were generally held accountable for bringing about democratic change in the 1960s and 1970s: deepening legitimacy problems of the authoritarian system, the unprecedented global economic growth of the 1960s, striking changes in the doctrine and activities of the Catholic Church, changes in the policies of such powerful external actors as the United States and the European Community, and the snowballing or demonstration effects of the first democratic transitions on subsequent followers ( 1991: 45-46). Clearly, most of these factors were also presented and applicable to South Korea. The cultural legacy of South Korea as a post-Confucian society had also made a difference in terms of the style and pattern of democratic transition. For instance, such Confucian cultural legacies as respect for education and hierarchy had impacted the ways in which the confrontation between regime and opposition had been carried out and managed. Other Confucian values, such as respect for authority and discipline, no doubt also played a role in both economic and political development. The exact degree and formula of contribution by each of these Confucian norms is, however, difficult to establish conclusively. Some cultural norms, such as deference to patriarchal elders, clearly predated Confucianism. Buddhism too extolled serving parents and their surrogates. What neo-Confucians successfully attained was merely to intensify and formalize some of these indigenous cultural practices. The successive reform agenda of building a new Korea by the respective administrations of Korea's Sixth Republic seem to have conformed to the Confucian

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intellectual tradition of building a moral political and economic order. This was in line with the intellectual challenge of Korea's search for a new identity in the age of globalization. The situation in post-Confucian society, under the President Kim Young-Sam government, arguably resembled the Choson dynasty in 1392 in its zeal and moral conviction for launching a new political order for a new age, even if no dogma or blueprint of social engineering equivalent to Chong To-jon's neoConfucianism was available (Chung, 1985). What follows logically from the process of democratic transition was democratic consolidation, the policy agenda of reform in the posttransition phase. The political agenda of South Korea in the new millennium continued to be achieving democracy, not only in politics, but also in civil society during this critical time. How strong or weak a legacy of democratic reform would each government of Korea's Sixth Republic leave was more than a matter of political curiosity for many Koreans. The answer to this question would depend on the success or failure of the broad reform agendas undertaken by the respective administrations of the Sixth Republic (see Chapters 3, 4, and 6). The process of democratic consolidation, to be further elaborated in Chapter 3, "consists of eliminating the institutions, procedures, and expectations that are incompatible with the minimal workings of a democratic regime" (Valenzuela, 1992: 70). The elimination of the old practices of the authoritarian era, through instituting reforms, would enable the postauthoritarian state to develop further along the path of democracy building. The reform agenda of the Kim Young-Sam government, to be examined in Chapter 4, was said to revolve around a set of three specific policy programs. These entailed the measures of strengthening democracy, founding a new moral and political order, and attaining Korean unity and reunification in the future. Whereas the first measure of establishing a democratic government was to be accomplished by eliminating political corruption and immoral acts of public officials, the second measure of restoring a moral and social order was to be promoted by means of liquidating past errors and irregularities, and the third measure of promoting the unity and harmony of the people was to be accomplished by preparing South Korea to confront new challenges in the twenty-first century through internationalization and reunification of Korea. Paths to Modernization and Development

The legacy of Confucianism on Korean culture was clearly evident in the process of modernization and political development of Korea's Sixth Republic. Confucianism began as a set of principles and rituals that were aimed at harmonizing human relations. Confucianism as a traditional value system and worldview had now become more of a guide to social behavior. As a political theory, Confucianism provided a method of governance that had relied on the scholar-gentry system in the past, but was now available to the educated and technocratic elite in a modem context. Confucianism, as noted, was an elitist theory

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that suggested a clear-cut ordering of society and demarcation of social classes. As a worldview, Confucianism is clearly more secular and practically oriented than certain world religions with otherworldly orientations. What, then, is the verdict of Confucianism as a contributing factor toward the socioeconomic and political modernization of South Korea as an East Asian state? Was the Confucian cultural legacy in any way responsible for rapid economic growth and modernization? To answer these questions, we must avoid, as Eckert eta!. ( 1990) note, citing Tu Wei-Ming's argument, positing any kind of direct causal relationship between Confucianism and economic growth. Instead, we must even acknowledge "the likely debilitating effect of a conscious, studious commitment to Neo-Confucian ethics on the development process" as it happened to the Yangban aristocratic elite of the Choson state. However, as Tu suggests, "Once the orientation of a society has shifted toward modernization," many of the Confucian norms and values "now internalized and no longer conscious can provide a cultural basis for the requisite economic transformation" (as cited by Eckert eta!., 1990: 410; Tu, 1996; 2000). In short, the effect of Confucianism on East Asian economic growth and modernization has been a classic case of unintended consequences, similar to the effect of Calvinism and the spirit of Protestant ethics on early Western capitalists. South Korea's technocratic elite and an exceptionally well-educated workforce were thus an unintended consequence of South Korea's Confucian cultural legacy. It is true that many "ambitious South Koreans now read Paul Samuelson and Martin Feldstein," instead ofreading Mencius and Chu Hsi, as Eckert eta!. (1990) aptly suggest. Yet, this does not diminish the fact that "the respect for education and commitment to self-improvement through study remain much the same as in the Choson dynasty Korea" (410). The Confucian worldview likewise found its modern adaptation in the East Asian countries of China, Korea, and Japan because of this rich cultural heritage. Confucianism, as Gilbert Rozman observes, represented "a set of ideals, combined with the means to achieve them at the individual, community, and state level" ( 1991: viii). Although all East Asian countries equally absorbed and refined Confucian values and concepts of authority, each had its unique historical experience and pattern of cultural adaptation. The "Confucianization" of traditional Korea, for instance, was more thorough and intense in its application and adaptation to dogma than was the case in Japanese or Chinese societies. 7 The Korean approach to and version of Confucian authority naturally varied from that found in China and Japan. The result, according to one observer, has been for Korea to acquire "a distinctive combination of discipline and lack of inhibition, which makes Korean political culture something quite different from a simple blend of Chinese and Japanese traits" (Pye, 1985: 58). In Korea, according to Pye, "Confucianism contributed to a concept of power which accentuated the purposefulness of the Japanese approach and the elitist sense of virtue of the Chinese, a combination which has produced a bold, risk-taking style of action" (1985: 58). As Pye asserts:

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Historically, Korean politics was too consumed with factional strife to permit the growth of the Chinese illusion that all of politics could be focused on achieving a stable state of harmony. Yet the Koreans took their exposure to Confucianism seriously and hence came to believe that virtue should and would be rewarded; therefore the elite could afford to take risks. At the same time, however, uncertainty as to who were the legitimate elite created a state of dynamic insecurity and produced people who were self-starters, having the risk-taking attitudes that Weber associated with the Protestant innovators of capitalism. (58) Some of the manifestations of this unique version of Korean Confucian culture are evident in the political process of contemporary politics, as already noted, in terms of ideology and institutions. Finally, what is the role of the Confucian cultural legacy in the current political landscape of democratic transition and consolidation? One cannot draw a causeand-effect relationship between Confucianism and democracy, like the one between Confucianism and the economic miracle. More likely, the idea of modernization resulting from the economic miracle has provided the context from which the political miracle of democracy and development may also arise, despite the cultural pessimism of Jacobs's view of Confucianism's patrimonial and traditional values. Again, there is controversy over whether modernization leads to democracy in the Korean context. James Cotton, for instance, argues as Pye does, that "popular demands for political participation and the willingness of elites to recognize them" were likely consequences of socioeconomic modernization (1989: 244). It is important to recall, however, that development explains only the timing of a country's movement toward democracy, not the certainty of it. Otherwise, we may end up committing the sin of determinism, that is, economics determining politics. To the extent that East Asia is known for "the area's profound exceptionalism," as Chalmers Johnson cautions, we should also avoid using "modern East Asia as a junkyard for Western theories of economic development and political modernization" especially when approaching "a theory-intensive subject like democracy" (Johnson, 1989: 1). The post-Confucian society and state of South Korea will acquire its own style and pattern of political modernization and development in the twenty-first century. In this process, South Korea's new democracy will hopefully be able to achieve modernization ideals and values that include, among others, dynamic economic growth, greater economic equity, and social justice. Hopefully, it will also nurture the civic political culture of democracy, away from authoritarianism toward greater openness and toleration in an external environment that sustains peace and stability in the region.

Confucianism, Democracy, and Reformism Political democracy in its origin, as already noted, was clearly a Western idea. NonWestern cultures, such as Islamic and Confucian cultures, were often perceived as

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posing insurmountable obstacles to democracy or democratic development. This view was rather narrow and simplistic, however, because cultures are dynamic and evolve and shift. Countries with Confucian cultures, for instance, were regarded in the past as unlikely to develop economically in the same manner as Protestant countries. Yet, today, those East Asian countries with Confucian cultural traditions tend to exhibit the most impressive economic development. The same logic applies to political development and democracy building. One has to be careful to avoid deterministic implications of cultural analyses. The more tenable position seems to argue, as does Huntington, that "great historical cultural traditions, such as Islam and Confucianism, are highly complex bodies of ideas, beliefs, doctrines, assumptions, writings, and behavior patterns" ( 199la: 310). The more challenging question, therefore, is to ascertain "what elements in Islam and Confucianism are favorable to democracy, and how and under what circumstances can these supersede the undemocratic elements in those cultural traditions?" (ibid.). Clearly, "Confucian democracy may be a contradiction in terms, but democracy in a Confucian society need not be" (ibid.), nor is it to be taken as impossible (Tu, 1994: xix). The relationship between Confucianism and democracy, however, seems far more complex than many commentators have indicated (Fukuyama, 1995c). First of all, one needs to identify Asia's varied Confucian traditions and differentiate between traditional Chinese Confucianism and the neo-Confucianism that was imported from the Song dynasty (950-1279) into Korea and Japan. For instance, the Japanese modified Chinese Confucianism in certain strategic ways, as Francis Fukuyama notes, to make it compatible with their own imperial system, where the emperor was absolute. In China, even the emperor's authority was not absolute because it could be undermined altogether if his own immorality caused him to lose the "mandate of heaven" (Fukuyama, 1995c: 27). In Chinese Confucianism, the family (or lineage) was a bulwark against the power of the state; in Japan, the family was a much weaker rival to the political authority that the emperor and the state represented. Hence the characterization of Confucianism as inevitably supporting state power over subordinate social groups, as Huntington claims, would apply more readily to Japanese than to Chinese Confucianism. Ironically, it is post-World War II Japan rather than China that has been made a democracy in the past fifty years (Fukuyama, 1995c: 27). Clearly, the Korean Confucian culture was shaped by the ideology of neo-Confucianism as adopted by the Choson dynasty. Korean Confucianism is, therefore, sui generic. It should be identified neither with traditional Chinese Confucianism nor with the Japanese neo-Confucianism as modified. It is important to clarify, as Chapters 4 and 6 will, how the Sixth Republic of Korea under the Kim Young-Sam and Kim Dae-Jung administrations adopted their respective reform agendas. The politics of promoting liberalization and democratization reforms undertaken by both Kim administrations respectively could be seen as an attempt by the government to reconcile the post-Confucian society of Korea

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with the new ideas and expectations of modernization and democratization. Reformism has been the strategy adopted by the political elites as a way of positively interacting with and responding to the impact of the West and the globalization emanating from the outside world. Reformism, as a way of bringing about political and socioeconomic changes in the modern context, is based on a set of assumptions regarding what is desirable and what is possible. The rise and role of civil society and social movements, to be noted throughout this book and especially in Chapter 8, are essential for reformism to succeed. The civil society in Korea, for instance, is androcentric in the sense of promoting masculine characteristics and domination. This is a result of the Confucian cultural legacy and its tendency toward masculinization of the public sphere in traditional Korea. Confucianism teaches filial piety and a paternalistic value orientation, while neo-Confucianism advocates the principle of patrilineage. 8 Responses to Western impact and modernization, according to Huntington, can be undertaken in one or more of three ways: rejecting both modernization and Westernization; embracing both; and embracing the first and rejecting the second (1997: 72). Rejectionism, which Japan followed from its first contacts with the West in 1542 until the mid-nineteenth century, permitted only limited forms of modernization, such as the acquisition of firearms. It restricted the importation of Western culture. Old China and old Korea in their negative responses to the Western impact also pursued this course of isolation and seclusion. Whereas Japan abandoned this rejectionism following the Meiji Restoration in 1868, the old China and Korea refused to allow any significant modernization or Westernization. Chinese isolation, like Japanese isolation, was brought to an end by Western arms, which had been supplied to China by the British in the Opium War of 1839-1842 and by Commodore Matthew Perry in 1854. In the case of old Korea, it was imperial Japan that took over the country as its colony following a series of wars against its neighbors-the Sino-Japanese War (1894-1895) and the Russo-Japanese War (1904-1905). A second possible response to the West is Arnold J. Toynbee's (1955-1961) Herodianism or Kemalism, as Huntington (1997) prefers to call it, to embrace both modernization and Westernization. This response, as epitomized by Mustafa Kemal Ataturk, who led modem Turkey out of the ruins of the Ottoman Empire at the end of World War I, is based on the assumption that modernization is desirable and necessary. The assumption is that the indigenous culture, such as Islam and Confucianism, was incompatible with modernization and that the old culture should be abandoned. Society must fully "Westernize in order to successfully modernize." Modernization and Westernization not only reinforce each other, but they must also go together. Some intellectuals in nineteenth-century Japan and China took this position by arguing that in order to modernize, their societies should abandon their historic languages and adopt English as their national language (73). A third choice is reformism, which attempts to combine modernization with the preservation of the central values, practices, and institutions of the society's indigenous culture. Understandably, this choice has been the most popular among

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many non-Western elites, including the Qing dynasty, which used the slogan of tiyong, that is, "Chinese learning for the fundamental principles, Western learning for practical use" toward the end of the nineteenth century. The Korean elite also subscribed to this notion of harmonizing Eastern learning and Western ideas, through movements like Chondokyo (The Teaching of the Heavenly Way) and Tonghak (Eastern Learning). In Japan, it was the Wakon, Yosei (Japanese spirit, Western technique) movement (Huntington, 1997: 74). All these strategies of rejectionism, Kemalism, and reformism are, in short, based on different assumptions as to what is possible and what is desirable. For instance, for rejectionism, both modernization and Westernization are undesirable and it is possible to reject both. This was put into practice in old Korea by the Taewongun Regency and King Kojong in the late nineteenth century (Deuchler, 1977). 9 For Kemalism, both modernization and Westernization are desirableWesternization because it is indispensable to achieving modernization. This position has not been fully adopted by the Korean government, although there were some intellectuals subscribing to this extreme point of view. For reformism, modernization is desirable and possible without substantial Westernization, which is undesirable. The two Kim administrations of Korea's Sixth Republic, as chapters 4 and 6 will argue, seem to have subscribed to the idea of reconciling the traditional culture and the modernization ideas. Thus, conflicts are likely to exist between rejectionism and Kemalism on the desirability of modernization and Westernization and between Kemalism and reformism as to whether modernization can occur without Westernization (Huntington, 1997: 74-75). Additional clarifications are needed in examining what culture and political culture entail. Culture is often considered too abstract and nebulous to serve as a useful tool in political analysis. The more conventional method is to employ specific and concrete terms like "elite" or "class" in political analysis. Marxism or dependency theory, as a form of structuralism, is more popular, while cultural theory and analysis are regarded as too imprecise and deterministic. Culture in social sciences is often interpreted as a way of life or belief system that affects attitudes and behavior (see Chapter 1). Yet, culture shift takes place over time, although the process of culture change is slow and deliberate. Also, culture may be perceived as a structure shaping the patterns of individual and group orientation toward objects in the environment. Thus, political culture, by definition, refers to the actors' orientation toward power, rule, authority, government, and so on, which are the key values and ingredients in politics. They are subject to both challenges and change in democracy. Conclusion In his seminal work Confucian Statecraft and Korean Institutions (1996), Palais writes about "the complexities of Korean Confucian statecraft" and the "incompleteness of the Confucian transformation" in the second half of the Choson dynasty,

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especially during the seventeenth and eighteenth centuries, which is the period that Palais focuses on. The ideas that constituted Confucian statecraft tradition were, according to Palais, not always internally consistent, and the social practices were not always on par with the norms and values inculcated by nco-Confucian ideals and philosophy (1996). The new dynasty was resilient during the first 100 years following its founding in 1394 by "a small coterie of converts to the nco-Confucian doctrines of Sung dynasty" of China. Despite the presence of these ideas for two millennia, the earlier practices of "Buddhism functioned as the dominant religion at the upper levels of society, and folk religion, which included animistic spirit worship and shamanism, was pervasive among the rural peasantry" (Palais, 1996: 1002-1003). Palais derives this conclusion from his study of the major institutions in the Choson state. The study is based on an analysis of the memoirs of the leading nco-Confucian scholar Yu Hyongwon (1622-1673), whose pen name was Pan'gye and his writings called Pan 'gye surok (The Jottings of Pan' gye). The social reality of the seventeenth century was "a country in crisis-weakened by mal-administration, internecine bureaucratic factionalism, unfair taxation, concentration of wealth, military problems, and other ills" that made the nation povertystricken. The country was also ravaged by successive waves of foreign invasions, ftrst by the army of Hideyoshi Toyotomi of Japan between 1592 and 1598 and then by the Manchus troops in 1627 and 1637. Nco-Confucian ideals, values, and norms had lost credibility and proved to be limited and powerless. Under the circumstances of a war-devastated economy, it is clear that the scholar-gentry were expected to carry on a reform agenda that included economic reconstruction, institutional reform, and a reassessment of neo-Confucian ideology. None of these essential measures of governance and statecraft were fully addressed by the ruling elites. The failure of the nco-Confucian state of the Choson dynasty offers lessons for modern Korea. Unless a state can eliminate poverty and enhance prosperity and continually reform its political institutions, it is doomed to fail. In this endeavor, cultural values provide the context for reform and can assist or limit its progress. So, the claim of taking culture seriously in political and economic analyses, as suggested in this chapter, does not mean that culture determines the political destiny and economic welfare of a nation. It only means that ideas and values acquired by individuals from their culture will have bearing on the political action and economic activities of individuals in society. These acquired cultural values will, in turn, help or hinder the progress and prosperity of a nation in the pursuit of socioeconomic developmental goals. It is the interaction between culture and values that generates a set of ideas that are adopted and put into effect by government leaders as major policies (see Figures 1.1 and 1.2). Confucian norms and values, such as emphasis on loyalty, hierarchy, learning, and work ethics, are not necessarily in conflict with the ideas of modernization and democratization. These traditional norms and values have provided the cultural context and background factors for shaping the belief system in contempo-

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rary Korea. The ideas of modernization, when adopted by the government elites and put into effect as major policies and programs, were unopposed by the traditional elites who considered modernization as a way of alleviating the poverty of rural sectors of the population. 10 Likewise, the ideas of democratization doggedly pursued by elites both in government and in opposition may conflict with the traditional values of Confucianism that shaped the attitudes and perceptions of these elites through socialization experiences. The conflicts seem to arise with the contrast between the ideas of democracy that emphasize individualism, egalitarianism, the rule of law, and individual rights, and the ideas of Confucianism that emphasize family, hierarchy, loyalty, and propriety. Modernization and democratization derived from Western culture have been adopted and incorporated into the policies and programs of the democratic governments in modern Korea increasingly in the last twenty years. Since 1987, democratization has become the dominant belief system in South Korea. Democratic values and norms have come to be accepted by the elites as well as by the mass public, although the legacies of authoritarian rule and Confucian value orientation continue to persist (Shin, 1999: 247-268). The principles of democracy have followed the successful attainment of the ideas of modernization and economic development in the late 1980s in South Korea. The traditional values of Confucian culture did not block the formation and implementation of these ideas, which were basically Western culture values and norms. The social chaos and confusion in liberated Korea, following Japan's defeat in World War II and the destruction wrought by the Korean War, had a leveling effect as it did away with the social structure of an aristocratic Yangban class (Cumings, 1997: 185-198). The land reform just before the outbreak of the Korean War on June 25, 1950, also led to the transformation of rural Korea, where the majority of the population resided on the eve of the war. Under these circumstances, the ideas of modernization and democratization were introduced initially by intellectual elites, but were eventually accepted by the mass public despite some opposition by the conservative forces and resistance by the vested interests. Values come in two categories: intrinsic and instrumental. It is useful to keep in mind what ideas and values belong to what category. Intrinsic values, like patriotism, are those we uphold regardless of the benefits or costs. A value is instrumental, on the other hand, when it is supported because it is directly beneficial to us. All economic values, like economic development and modernization, are instrumental, while political values like ideas of democracy and nationalism are intrinsic (Grondona, 2000: 45). Although Confucianism in theory inculcated a system of intrinsic values and norms, these were not compatible with the increasing desires and needs of the people for better economic welfare and prosperity in modem times. The traditional culture and intrinsic values of Confucianism had to give way, with the passage of time, to a set of instrumental values represented by the ideas of modernization and democratization. We turn next to examine some of the practices and evidence of how this transformation has occurred in modern-day South Korea.

3 Democratization by Launching the Sixth Republic of Korea (ROK)

Poverty has been my guide and my benefactor. Hence my time, twenty-four hours a day, cannot be separated from the affairs related to this guide and benefactor. The establishment of a selfreliant and independent Korea based on a mass society of austerity, diligence, honesty and sincerity, is what I wish for. 1

Park Chung-Hee, 1963 ROK President, 1961-1979 For it is not always when things are going from bad to worse that revolutions break out, ... generally speaking, the most perilous moment for a bad government is one when it seeks to mend its ways. 2

Alexis de Tocqueville, 1955 [1840] In East Asia, as in Western Europe, liberalizing autocracies laid the groundwork for stable liberal democracies. 3

Fareed Zakaria, 2003 This chapter addresses the question of how and why the constitutional crisis of political transition and regime change took place, while the South Korean economy was undergoing a relatively rapid and high-growth trajectory in the 1970s and 1980s. The forces associated with the democracy movement exerted their relentless pressures and demands for political change in the midst of economic success and prosperity rather than the failure and slowdown of the economy. Alexis de Tocqueville was among the first to recognize this paradox of regime change (i.e., revolution) triggered by reforms in his study of the ancien regime and the French Revolution (Tocqueville, 1955 [1840]). This so-called Tocqueville paradox underscores the dynamics of democratic transition in South Korea's ancien regime of the Fifth Republic. 4 South Korea's political transition from authoritarianism toward democracy began with its democratic opening in 1987. Timed with the historic hosting of the 1988 Summer Olympics in Seoul, South Korea made great strides toward democracy. The Republic of Korea (ROK) government's attempts to consolidate democratic gains in 62

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the ensuing years, however, have proved to be more difficult. We will examine here the topic of democracy building from the broad historical perspective of the modernization of Korea. The dynamics of transforming the tradition-bound Korean society into a modem democracy have been the continuing challenge for political leadership in the last decade of the twentieth century. Related to modernization is the idea of democratization. The initial stages of democratization, involving the decay of authoritarian rule and democratic transition, will be the primary focus of this chapter. The objective is to see how the idea of democracy has evolved from an authoritarian political environment, albeit with economic development, and also to anticipate prospects for institutionalizing political democracy in Korean society. By the mid-1980s South Korea had moved away from conditions of abject poverty toward relative prosperity. What role did culture play as a causal explanation for overcoming the sociology of poverty? Was it a strategy of action for mobilizing the energy of entrepreneurship or the talent of technocracy and bureaucracy? This chapter shows how South Korea's domestic politics of the Fifth Republic ( 1981-1988) eventually led to the authoritarian withdrawal and democratic opening, as proclaimed on June 29, 1987, and furthered subsequent political change. The origins and background of the launching of the Sixth Republic, through democratization that resulted in the successful regime change, will be examined first. It was uncertain initially whether the values of democracy, as agreed on by politicalleaders subsequent to the proclamation, could be institutionalized. But the continuous popular demand for democracy and economic growth helped the leadership to pursue the policy agenda and goals of modernization. The discussion on launching the Sixth Republic will end with an analysis of the political economy of democratization and an assessment of the extent to which the Rob Tae-Woo administration in the Sixth Republic accommodated democratic norms and principles in pursuit of the idea of political democratization. Subsequent analysis will begin by examining the first and second stages of democratization in South Korea (i.e., the decay of authoritarian rule and democratic transition); the discussion on the third and fourth stages of democratization (i.e., democratic consolidation and maturing of democracy or institution building) will be continued in Chapters 4 and 5. Since democratic transition originated from the prior political process of democracy movement and liberalization, we will begin by raising both theoretical and practical questions of what democracy entails and how democratization culminates into an orderly democratic transition. Democracy Movement and Democratic Transition Democracy, simply put, is "rule by the demos," or government by the people. In defining democracy, differentiation is usually made between its substantive and procedural aspects. Substantively, democracy is a form of government based on the consent of the people and it serves the general interest of the governed. Proce-

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durally, democracy is a form of government where the people, through elections that are "fair, open and periodic," select the leaders. Candidates are expected to compete for votes (Schmitter and Karl, 1991: 73; Pae, 1986: 1-14). The differentiation between the substantive and procedural aspects of democracy reflects the values underlying the conception of democracy. Substantive democracy gives an emphasis to such values as justice and equality. Procedural democracy, on the other hand, promotes such values as fairness, due process, transparency, and the rule of law. Recent empirical research on democratization tends to favor a procedural or minimalist conception of democracy over a substantive or maximalist conception that embraces political equality and social justice (Shin, 1994: 142). The procedural conception of liberal democracy, according to many, is said to have gained greater acceptance today, not only by the elites, but also by the mass public (Huntington, 1991a; Mainwaring, O'Donnell, and Valenzuela, 1992; O'Donnell and Schmitter, 1986). The social science literature is full of studies on democracy as a theory and practice (Dahl, 1989; Held, 1987; Sartori, 1987). Democracy, as a political science concept, means a political regime that permits free and competitive elections, where the adult population enjoys not only universal suffrage, that is, franchise, but also the protection of basic human rights by the government. A democratic regime must provide an institutional mechanism for its citizens to enjoy the basic freedoms of speech and the press, as well as the rights of political association and political competition (Share and Mainwaring, 1986: 177). A democratic regime must also enable an alternation in political power through periodic general elections. Two observable and empirical indicators of democracy, as Robert A. Dahl observes, are the presence in the political system of political contestation and popular participation in the political process (1971, 1989). A political system is democratic, as Samuel P. Huntington notes, "to the extent that its most powerful collective decision-makers are selected through periodic elections in which candidates freely compete for votes and in which virtually all the adult population is eligible to vote" (1984: 194). An operational definition of the term "democracy," therefore, will require the presence of both the regime and political opposition forces in society, a society governed by the institutional rules and arrangements for peaceful and orderly political change via election and the electoral process (Dahl, 1989; DiPalma, 1990, Huntington, 1989; Lawson, 1993; Mainwaring, 1993; Sartori, 1987; Schmitter and Karl, 1991). 5 Democracy, as such, reflects primarily Western values that have acquired universality or universal appeal in the late twentieth century. Democratic values are somewhat alien to an East Asian traditional culture that draws on the beliefs and norms of Confucianism (see Chapter 2). Although East Asian civilization had some notions of democratic values and value orientation, as noted in the Asian values discourse in Chapter 9, the dominant paradigm of the traditional culture of East Asia was family centered and hierarchical in human relations and value orientation.

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Democracy Movement and Liberalization Democratization is one of the three principal ideas, values, and beliefs, as already noted in Chapter 1, that have affected the political and socioeconomic life of the ROK in the last quarter of the twentieth century. Because of its centrality in shaping the political landscape of contemporary Korean society, we need to expand on the theory of democratization. Democratization consists of two separate steps: democratic transition and democratic consolidation. The dynamics of democratic transition will need additional analysis here, while the challenge of democratic consolidation through reform will be examined in Chapter 4. Democratic transition occurs when the authoritarian state is replaced by the democratic state. This regime change takes place either by the use of force against the government by opposition forces, resulting in the overthrow of the government and revolution, or the peaceful and orderly transfer of power between the government and opposition through an electoral process. The latter involves the strategic choices of key actors-the supporters and opponents of the incumbent government-through negotiation and bargaining on the modality of power transition. In some recent studies on democratic transition, "choice" has received greater emphasis than the contextual factors of both institutional and economic "constraint" (Haggard and Kaufman, 1995: 5). The most influential study in this tradition is Guillermo O'Donnell, Philippe Schmitter, and Laurence Whitehead (1986), who build on earlier works by Dankwart Rustow (1970) and Juan Linz (1978). They highlight "the high degree of indeterminacy embedded in situations where unexpected events (fortuna), insufficient information, hurried and audacious choices, confusion about motives and interests, plasticity and even the definition of political identities, as well as the talents of specific individuals (virtu) are frequently decisive in determining outcomes" (O'Donnell, Schmitter, and Whitehead, 1986: 5). This choice-based approach has been further refined and developed by Adam Prezeworski (1991) into a game-theoretic format that displays both elegance and deductive rigor. These relatively abstract models of strategic choice will need to be supplemented, however, by detailed case studies with empirical data and comparative analysis of the new democracies. Stephan Haggard and Robert R. Kaufman ( 1995) meet this requirement by undertaking a comparative study of the political economy of democratic transition in the 1970s and 1980s in terms of how authoritarian withdrawals had taken place in the context of either "economic crisis" or "noncrisis." Their study is built around a comparison of twelve countries: seven in Latin America (Argentina, Bolivia, Brazil, Chile, Mexico, Peru, and Uruguay) and five in Asia (Korea, Taiwan, the Philippines, Thailand, and Turkey). What makes the Korean case of democratic transition rather unique and special, they argue, is that in 1987 the democratic transition occurred at times of economic noncrisis situations ( 1995: 91 ). This rather unexpected surprise of "authoritarian withdrawal" requires an explanation. Scholars have generated a large volume of studies on democratic transition

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and consolidation. These range from the broad concerns of political leadership, political structure, and political culture to more specific focuses on elite strategies and interaction, civil-military relations, and institutional designs of electoral and party systems. As a result, theories of democratic transition and consolidation, or what some experts have called "transitology" and "consolidology," have emerged as an important subject area in comparative politics (Schmitter and Karl, 1994). Three competing and interrelated paradigms have been particularly noteworthy. The first is the "preconditions paradigm," which argues that there exist a set of preconditions necessary for democratization, such as economic development and "civic culture." Seymour Martin Upset writes that "[t]he more well-to-do anation, the greater the chances that it will sustain democracy" (1960: 51). Certain cultural traits, such as mutual trust, tolerance, accommodation, and compromise, are also considered essential to democratization (Putnam, 1993; Fukuyama, 1995a). The second is the "contingency paradigm," which attributes democratization to a high degree of uncertainty. As a result, the dynamics of transition revolve around and gravitate toward strategic interactions among actors. Contingency implies that political outcomes in the process of democratization depend less on objective structural conditions than on subjective rules surrounding strategic choices made by the elite (O'Donnell and Schmitter, 1986; Karl, 1990). The third is the "civilsociety" paradigm, which argues that civil society is crucial in promoting, protecting, and preserving democracy (Diamond, 1999: 218, 239; S. Kim, 2000: 8-9). Democracy movement and liberalization normally precede a democratic transition that, in tum, would lead to either the success or failure of democratization. The role of civil society in the politics of democratization is important. This was especially so in the case of Korea, as documented by a recent study (S. Kim, 2000). Korean democratization has undergone three "democratic junctures" (1956-1961, 1973-1980, and 1984-1987), according to Sunhyuk Kim, whereby the democracy movement was initiated and promoted by civil-society groups. The prodemocracy alliance of these groups became "more extensive, more organized, and more powerful over each of these periods (2000: 5). Civil society, as Larry Diamond notes, is the realm of organized society that is "open, voluntary, self-generating, at least partially self-supporting, autonomous from the state, and bound by a legal order or set of shared rules" (1999: 221). As such, civil society is distinct from "society" in general, in that "it involves citizens ... in a public sphere" to express their interests, passions, preferences, and ideas. Civil society, therefore, is an intermediary phenomenon that stands between the private sphere and the state. A vibrant civil society serves "the development, deepening, and consolidation of democracy" by providing "the basis for the limitation of state power, hence the control of the state by society" and, after the transition, involving the process of "checking, monitoring, and restraining the exercise of power" by democratic states and holding them "accountable to the law" and standards of responsible government (239). The term "democracy movement" refers to a popular campaign to bring about

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an end to the authoritarian rule and to establish democracy as a political system. The term "liberalization" refers to a decline in repression of the opposition by an authoritarian regime prior to a democratic opening and democratization. Whereas democracy movement is undertaken in the civil society, engaged by the leaders of political and civic organizations outside the political establishment, the ruling elite within the regime undertakes the measures of liberalization. To be successful in a democratic transition, these two processes of democracy movement and liberalization must go hand in hand and must be synchronized, either by design or by default. An interaction between democracy movement and liberalization will determine the outcome of the politics of democratization. Whereas the democracy movement is led by opposition leaders in alliance with civic organizations to bring about an end to the authoritarian political order, liberalization represents a policy change initiated by the ruling elite within an authoritarian regime. Liberalization occurs when there is an easing of repression by the regime. As a result, the basic civil and political rights of the citizenry are extended without necessarily permitting competitive elections that would allow for an alternation in power (Huntington, 1984: 194). Democratization, in short, encompasses the democracy movement, liberalization, democratic transition, and democratic consolidation. Democratization also entails the establishment of institutional arrangements that will make possible an alternation in political power. Democratization, according to Huntington, is about the replacement of an authoritarian government by a government selected "in a free, open, and fair election" (1991a: 9). Whereas liberalization entails a "partial opening of an authoritarian system," democratization entails the process of"choosing governmental leaders through freely competitive elections" (9). Thus defined, democratization is the dynamic process of political change that enables the broader participation of the public in the electoral process of choosing the members of the government. Typology of Democratic Transition

Scholars on democratization have also examined how democratization and democratic transition proceed once liberalization occurs. What sequences and alternative paths are open and available to the regime and opposition as political actors? Three ideal types of transition of an authoritarian regime to democracy have been noted in the literature. These are to achieve democratization via (1) overthrow or replacement of the regime by the opposition, (2) reform or transformation undertaken by the regime itself, and (3) compromise or negotiated settlement between the regime and the opposition (Huntington, 1991a). These are useful constructs that can clarify the process of political change associated with the democratic transition of the authoritarian state. Huntington designates these three types of regime transition, respectively, as replacement, transformation, and transplacement (1991a: 124). South Korea's demo-

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cratic transition avoided Huntington's first process of "replacement" that entailed overthrowing an authoritarian regime (of Chun Doo-Hwan's Fifth Republic). Instead, the South Korean democratic transition ended up with a combination of the second and third processes. It moved from the regime "transformation" from within to regime "transplacement" through negotiation with opposition thereby overcoming an outright regime "replacement." The authoritarian regime negotiated its own mode of regime changes (transplacement) with political opposition. The ruling party chairman Roh Tae-Woo agreed to meet with the opposition leader Kim YoungSam to work out a plan for drafting a new constitution for the new Sixth Republic that would be approved by a national referendum. Donald Share and Scott Mainwaring introduce an alternative typology slightly in variance from Huntington's three types of democratic transition: transition through regime decline or collapse, transition through extrication by authoritarian elites, and transition through transaction between the regime and political opposition (1986: 178-179). No historical case seems to conform exactly to any of these threefold ideal types of democratic transition, but the typology introduced by Share and Mainwaring could be used also as the basis for establishing the case for Korean democratic transition. From this perspective, the South Korean experience clearly belongs to the third type of democratic transition, that is, "transition through transaction," or what Huntington calls transplacement, or simply "compromise" and "negotiated settlement between the regime and the opposition." The first type of democratic transition through regime decline or collapse is the most common. In these cases, the authoritarian elites exercise almost no control. These may take the form of military defeat at the hands of an external force (as in the case of democratization of Japan by the U.S. occupation authority after World War II) or of profound internal crisis in which the authoritarian regimes become thoroughly discredited and delegitimized (as in the case of the Philippines in 1986). This type of transition to democracy involves significant institutional changes and a rupture in the pattern of political authority. Historical examples include, in addition to Japan in 1945, Germany and Italy after World War II, Greece and Portugal in 1974, and Argentina in 1982-1983. The case of South Korea does not fit into this type of democratic transition, although the national liberation of Korea from Japan by the allied powers in 1945 affords a distinct possibility for this type of democratic transition. The second type of transition, transition through extrication, happens when authoritarian elites set limits of their own regarding the form and timing of political change, although they have limited ability to control the transition beyond the moment of the first elections. These authoritarian regimes generally tend to withdraw from power because of their low level of legitimacy and internal cohesion, although they still retain some control over the transition. Examples include Peru in 1980, Bolivia in 1979-1980, and Uruguay in 1982-1985. This was exactly the type of transition that President Chun Doo-Hwan would have fallen into but was saved from because of the "transplacement" plan worked out by Roh Tae-Woo at the

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eleventh hour. Roh, Chun's handpicked successor, was enticed to issue the dramatic announcement of a democratization reform package of his own. The third type of democratization, transition through transaction, is the negotiation between the ruling elites of the authoritarian regime and the democratic political opposition, although the negotiations are not initially between equals. Typically, the regime takes the initiative in the process of liberalization and remains viable as an agent for influencing the course of political change. Over time, however, a genuine process of negotiation takes place as the opposition begins to make headway and to redefine the political agenda. Examples, besides South Korea in 1987-1989, include Spain in 1977 and Brazil in 1982-1985. This was the way South Korea's democratization worked from 1987 to 1989. Liberalization by President Chun Doo-Hwan and democratization by President Roh Tae-Woo came about as conscious choices and decisions made by the authoritarian elites. These authoritarian elites, including Roh, initially exercised their capacity to control and shape the contours of the political process, although their regimes' control progressively declined as a result of popular mobilization, foreign pressures, and domestic opposition. There are a wide range of experiences in the "third wave" of democratization of the developing countries, starting with the fall of dictatorships in southern Europe in 1974 and Latin American militaries withdrawing from power in the late 1970s. In discussing the political economy of democratic transitions of these countries, Haggard and Kaufman (1995) draw a distinction between the two types of "authoritarian withdrawals" in new democracies: the context of either economic crisis or noncrisis situations. At the time of the 1979 assassination of President Park Chung-Hee, the ROK economy was experiencing some problems even though the economy was on a high growth trajectory. But these political and economic crises did not materialize into "authoritarian withdrawal" at that time. Eight years later in 1987, when the Korean economy was in a noncrisis situation, with a high growth rate and a current account surplus with low inflation, the authoritarian government opted-albeit out of the pressures exerted by political opposition and prodemocracy movement forces in the civil society-for "democratic opening." This illustrates that democratic transition can occur in "good times" as well as in "hard times" (Haggard and Kaufman, 1995). These definitions and conceptualizations of democratization are important in clarifying the case of South Korea's democratic transition and consolidation. South Korea's democracy movement reached a turning point in acquiring potency in the summer of 1987, when protest demonstrations were joined by some of the middleclass citizenry. Thereafter, however, violent demonstrations died down with the waning support of middle-class citizens who detested tear gas and violent confrontation in the streets. The South Korean democratic transition began with the December 1987 presidential election and climaxed five years later with the December 1992 presidential election, thereby completing the full electoral cycle of an orderly and peaceful transfer of power.

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In explaining Korea's democratic transition, some students highlight the role of external factors, especially the United States' policy and its position toward the Korean democracy movement (Gleysteen, 1999). Others address the role of domestic factors, such as the role of civil-society groups (S. Kim, 2000). Still others note the role of "elite calculation and interaction," such as a grand compromise between the soft-liners (blandos) and the hard-liners (duros) in the ruling structure (Cumings, 1989). According to some scholars, however, the elitist paradigm does not provide a complete explanation for the Korean democratic transition for three reasons. First, the visibility of elite interactions does not necessarily mean that they were causal. Second, excessive focus on elites tends to overlook the fact that their interactions were also subject to structural constraints. Third, strategic choices that mass publics also make sometimes prompted elites to move in the first place (S. Kim, 2000: 4; Tarrow, 1995). Tracing the historical context of democratization in South Korea will require a brief survey of the ways in which authoritarian political order preceded the launching of the Sixth Republic of Korea. The subsequent discussion will proceed in five steps. First, the political economy of South Korea's authoritarianism will be surveyed in order to show how modernization ideas inspired soldiers-turned-politicians to emerge. Second, the constitutional crisis of the developmental state will be examined with the liberalization of the regime and the downfall of the Fifth Republic. Third, the democracy movement in and outside parliament will be analyzed to see how the process moved toward the democratic opening. Fourth, the political economy of democratization under the new regime of President Roh Tae-Woo will be examined. Finally, this chapter will derive certain lessons and reach a conclusion concerning the South Korean experience of democratic transition. Modernization Ideas Inspire Soldiers-Turned-Politicians

The historic task of modernization of post-Confucian society of South Korea in the second half of the twentieth century was undertaken in the historical context of Korea as a divided nation-state. The Cold War system of confrontation, after World War II, provided the structure within which the ROK had to pursue its political and socioeconomic development. In terms of the modernization strategy, South Korea adopted a capitalist and market-oriented paradigm of development, while North Korea chose to follow a socialist path, using a centrally planned program and command economy strategy of development (Yang, 1994; Kihl, 1984, 1987). With the founding of the ROK on August 15, 1948, South Korea had launched an experiment with a type of constitutional democracy. These early experiments in democracy were doomed to fail, however, because of an inept leadership of politicians and the failure of the government to attain economic prosperity for the people. Following the Korean War (1950-1953) and during the First Republic (1948-1960) under President Syngman Rhee, South Korea started moving away from constitutional democracy toward authoritarian politics. The Second Repub-

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lie (1960-1961), following the student-led revolution of April 1960 that overthrew the Rhee regime, was short lived. Although it was democratically constituted through parliamentary procedure, the Chang Myon government proved to be politically weak, with incessant partisan infighting, and economically inept, with a lack of ideas and indecisive leadership. This provided the opening for military intervention in civilian politics. With the failure of the Second Republic, South Korea pushed ahead with authoritarian politics. The soldiers-turned-politicians were inspired by the ideas of modernization, especially overcoming poverty through modernization and industrialization of the economy. During thirty-two years, from 1961 to 1993, the three presidents of the ROK were all soldiers-turned-politicians. First, Major General Park Chung-Hee led a coup on May 16, 1961, but subsequently was elected as civilian president three times in popular elections, in 1963, 1967, and 1971, and in electoral college elections, in 1973 and 1977. Second, Major General Chun DooHwan carried out the December 12, 1979, coup, but subsequently was elected by an electoral college, in 1981, as civilian president to serve a seven-year term. Third, retired General Roh Tae-Woo ran for president as head of the Democratic Justice Party (DJP) in the 1987 presidential election and was popularly elected as president to serve a five-year term. Roh Tae-Woo, a coleader of the 1979 military coup, was a classmate of General Chun Doo-Hwan in the Korean Military Academy class of 1955. 6 All of these soldiers-turned-politicians were directly inspired by the ideas of modernization that acted as the driving force during their respective terms in office. The idea of democratization also acted as the driver of the political and economic processes during these years, and acted as a negative force during the tenures of President Park Chung-Hee and President Chun Doo-Hwan, while acting as a positive force during the tenure of President Roh Tae-Woo. The guiding principle of soldiers-turned-politicians, such as Park Chung-Hee, was to transform Korea into "a wealthy nation with a strong army" (puguk kangbyong) via a self-reliant and independent spirit of nation building (Park, 1963: 292). In the process, however, the cause of democracy was pushed aside by the immediate concerns for modernization of the economy and an ambitious program of rapid economic growth to be carried out with a military sense of efficiency. An economic miracle of development was manufactured by the successive authoritarian regimes of the capitalist developmental state (CDS). The policy instrument to bring about this change was an export-led strategy of rapid industrialization of the economy (Haggard, 1990) and co-optation of the chaebol (big business conglomerates) as an instrument for attaining heavy industrialization of the economy in a hurry. This was also the case with the authoritarian state of the Fifth Republic under President Chun Doo-Hwan. "Interests and institutions" matter, much as do "ideas," in Korea's political economy. When former President Park Chung-Hee was assassinated on October 26, 1979, his prime minister, Choi Kyu-ha, became acting president in accordance

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with the constitutional procedure. Choi remained as a figurehead, however, because the military faction led by then-major general Chun Doo-Hwan carried out a two-stage coup d'etat (the first on December 12, 1979, and the second on May 17, 1980). The second coup was met by a nationwide antigovernment demonstration, including the Kwangju uprising, which lasted for nine days beginning May 18 and was suppressed by the military. On August 16 Choi Kyu-ha resigned from the presidency and Chun Doo-Hwan was elected president by the rubber-stamp electoral college, created by former president Park Chung-Hee, on August 30, 1980. The next day, Chun assumed his presidency, but he was not inaugurated until March 1, 1981, when the new constitution came into effect. The constitution of the Fifth Republic, drafted by a government-appointed committee, was completed on September 29. It was subsequently approved by plebiscite, winning 91.6 percent of the votes cast in a national referendum, held on October 22, 1980. With the general election for the National Assembly held on March 25, 1981, the process of founding the new Fifth Republic was completed. 7 Since the early 1960s, the Korean economy has been on a rapid growth trajectory. The average annual growth rate of the gross national product (GNP) per capita between 1965 and 1990, for instance, was 7.1 percent, making South Korea the second fastest growing economy in the world (next to Taiwan) (World Bank, 1993).1ts GNP per capita was $5,400 in 1990, up from $82 in 1961, placing South Korea in an upper-middle-income economy by the standards of the World Bank. Income distribution has also been relatively equitable, although the picture has deteriorated somewhat since the 1970s. Starting in the early 1960s, the economy transformed itself from an agrarian to an industrial economy in less than two decades. Between 1961 and 1980, the proportion of people employed in agriculture, forestry, fishing, and mining decreased. Those in agriculture, for instance, declined from 66 percent to 35 percent of the employed population, while those in manufacturing rose from 9 percent to 22.6 percent, and those in service grew from 25 percent to 43.4 percent. By 1980, the labor force structure resembled more industrialized economies, rather than agrarian and raw material-extracting developing economies (Cho, 1994; Song, 1994). From the outset, South Korea's authoritarian state lacked political legitimacy because of the ways in which successive political regimes were established. Starting with the Third Republic, an authoritarian state resulted from the military coup of May 16, 1961, led by then-major general Park Chung-Hee. Park turned into a lifelong dictator by amending the constitution in 1972 to establish the Fourth Republic. He did not live to enjoy his guaranteed term in office, however, due to his assassination on October 26, 1979. The successive regimes of the Fifth and Sixth Republics, under Presidents Chun Doo-Hwan and Roh Tae-Woo, respectively, suffered from a lack of political legitimacy due to military intervention in civilian politics. The military-dominating authoritarian states, from 1961 to 1988, were in-

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strumental in achieving the developmental goals of modernization. But the lack of political legitimacy hampered progress in South Korea's political development and democratization. The attempt to overcome the inertia of tradition-bound post-Confucian social norms and institutions came under the influence of the military and bureaucratic political culture during the phase of consolidating an authoritarian state. The political institution that has emerged from the experiment in economic development by the soldiers-turned-politicians is called the CDS. It has been responsible for transforming post-Confucian South Korea and exhibits several characteristics of a state political economy, including a strong state, readily intervening in the market to influence the economy; a high degree of state autonomy vis-a-vis civil society; an efficient bureaucracy; and an authoritarian style of leadership (Johnson, 1982, 1989). The terms of entry into the political economy were dictated by the authoritarian state. The state favored big business, through preferential treatment of the chaebol (Johnson, 1987). Civil bureaucracy was mobilized in the service of the military regime. The highly trained technocratic elite, in turn, staffed the resultant bureaucratic authoritarian state. In this process of recruiting government elites, the cultural legacy of Confucianism favoring officialdom, scholarship, and meritbased recruitment no doubt played a role in strengthening the bureaucratic authoritarian state. The authoritarian state also had an exclusionary regime. Certain popular sectors in civil society were excluded from political participation. These included the workers, farmers, progressive intellectuals, students, and certain religious leaders. The state, for instance, openly acted to repress organized labor, depriving its right to collective bargaining. With the successful attainment of its developmental goals, however, South Korea's post-Confucian society began to change. The authoritarian regime was confronted by certain difficulties both at home and abroad. From 1986 to 1987, there was a greater demand for political participation by the popular sectors, which were led by political opposition that demanded the restoration of democracy. Radical university students waged violent antigovernment street demonstrations. Labor began to become more militant by waging strikes in demand for higher wages and better working conditions. Progressive Christian clergy also joined the movement to restore democracy. Thus, the legacy of authoritarian politics in South Korea was rather ambiguous. Confucian culture is moralistic in tone and condemnatory of illegitimate and immoral political acts. The challenge of the questionable legitimacy of an authoritarian state, therefore, led to the crisis of a developmental state in 1987 and the subsequent liberalization and democratization reform in the Sixth Republic under President Roh Tae-Woo. Under the traditional Confucian state and ideology, the military was subservient to the civilian scholar-gentry. However, because of the military dominance in civilian politics, the authoritarian state could not restore

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and solidify its legitimacy by performance alone. Yet, in the task of building a strong economy, the military-dominant authoritarian state did bring about an economic miracle, thereby helping post-Confucian society to transform itself into a modernizing society. The success of a developmental state also prepared for the democracy movement to take hold in civil society. The democratization and democracy movement in post-Confucian South Korea, on the other hand, was led by the opposition party leaders in alliance with the popular sectors of radical students, intellectuals, labor leaders, and progressive journalists and clergy. Contrary to the expectation of a fragmented political opposition in post-Confucian society, the democracy movement in 1987 was unified as an effective political force in opposition to the authoritarian regime both in parliament and civil society. A recent study documents the role of a vibrant ci vii society in Korea's democratization (S. Kim, 2000). There have been three time periods in South Korea's constitutional history, according to Kim Sunhyuk, when civil-society groups could have forged an alliance with political opposition to bring about democracy: the first democratic juncture (1956-1961), the second democratic juncture (19731980), and the third democratic juncture (1984-1987). It was not until the last of these three occasions that the prodemocracy movement successfully pressured the authoritarian regime to seriously negotiate with political opposition for its withdrawal from politics in June 1987 (S. Kim, 2000). The Korean case of democratic transition is similar, in many ways, to the game-theoretical situation of strategic interaction and bargaining carried on between the regime and political oppositions in the third wave of democratization. Yet, the 1987 bargaining in Korea was not so much an interelite strategic bargaining as an authoritarian withdrawal dictated by democratic opposition forces winning the political contest. The opposition leaders led the democracy movement but the civil-society groups at the grass-roots level, like the university students, church leaders, labor unions, and the middle-class citizens, actively supported their political cause. 8 Democratic transition was also made easier because the regime itself was divided between the hard-liners and soft-liners over the question of constitutional revisions. The soft-liners, led by Roh Tae-Woo, who favored liberalization, eventually prevailed over the hard-liners (Im, 1995). The impetus for democratization of South Korea in 1987 had less to do with the cultural legacy of Confucianism and more with the dynamics of the capitalist development that led to activating civil society and weakening of state autonomy. The regime change was guided in 1987 by elite machinations "from above" and the political opposition aided by popular mobilization "from below." This was sparked by the activism of civilsociety groups outside parliament. Democratic transition is the process of liberalization of authoritarian regimes and their replacement by democratic forms of political organization. This phase lasted for three years, from February 1985 until the Sixth Republic was launched in

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February 1988. The process of democratization was made possible by Roh TaeWoo's June 29 pronouncements of democratic reform measures, but was not completed until the election and inauguration on February 25, 1993, of a civilian president to replace Roh Tae-Woo. During the period of democratic transition, liberalization led to activation of the civil society and the weakening of the state. In the 1987 democratization movement, the new middle strata (jungsangch 'eung) that sided with the cause of the democracy movement against the authoritarian regime initially joined the popular sector. With industrialization, urban white-collar workers, which constituted the bulk of the new middle strata, rapidly increased in number. This group, highly educated and modem in outlook, with professional skills, was relatively young and strategically based in various social organizations and institutions (Dong, 1991; S. Lee, 1993: 354). At the time of the uprising, this group was also reform-oriented and directed the course of Korean development, according to Han Sang-Jin (1991: 246). Once the regime change took place, however, the new middle strata now began to pay greater attention to the activation of civil society by becoming involved in neighborhood activities. Su-Hoon Lee (1993) documents two such cases of the Korea Anti-Pollution Movement Association and the Citizens Coalition for Economic Justice. The result of this increase in power of civil society was the relative decrease or erosion of state capacity and autonomy (S. Kim, 2000). Constitutional Crises of the Developmental State

Much as the economic miracle of development became reality in South Korea in the 1970s and 1980s, the political miracle of democratization or democracy building got underway in South Korea in the 1990s. In explaining the process of South Korea's democratization, some of the contributing factors to South Korea's "economic miracle" are equally relevant. South Korea's rapid economic growth in the post-1961 period was due to a host of interconnected international, political, social, and cultural factors that facilitated the process of industrialization of the economy. These factors included, among others, international political support, access to foreign capital and technology, a small core class of entrepreneurs, a reserve of actual and potential workers, and the ability to learn quickly and remain cost-competitive in the international market (Eckert eta!., 1990: 403). Although some of these factors are equally important for understanding the political modernization of Korea, it was the success of economic development that provided the context and conditions for the subsequent political miracle of South Korea. The process of movement toward democracy, and the sustained momentum of democratization of politics, owed as much to the vision of modernization ideas upheld by Korean intellectual elites as to the display of leadership by political elites, in and out of government service. The economic miracle of development was achieved by the CDS that adopted the policy and programs indicative of a rapidly industrializing economy. An au-

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thoritarian regime was established to pursue an ambitious program of economic growth that was carried out with considerable success and efficiency. The authoritarian state was instrumental in achieving the developmental goals of modernization of the country, moving it away from a tradition-bound and underdeveloped society into a newly and rapidly industrializing country. Its aspiration was to build a dynamic modern, democratic, and prosperous society for South Korea. The CDS, as already alluded to, brought about the successful economic transformation of South Korea (Woo, 1991; Woo-Cumings, 1999). The nature and characteristics of the CDS included several features of the political economy of the state: a strong state influencing the economy, a high degree of state autonomy, an efficient bureaucracy, and an authoritarian regime and leadership style (Johnson, 1982, 1989). Park Chung-Hee and Chun Doo-Hwan both exercised authority over the chaebol regarding the terms of their entry into the market through preferential treatment, while punishing certain popular sectors in civil society, like depriving organized labor of its right to collective bargaining (Johnson, 1987: 136-164). In addition, the military bureaucracy supported the regime, while the civil bureaucracy was mobilized in the service of the regime. The bureaucratic authoritarian regime, in turn, was staffed by a highly trained, technocratic, elite corps of civil servants co-opted by a soldier-turned-politician leadership. With the successful attainment of its developmental goals, however, South Korea began to exhibit certain constraints and limits of a developmental state (E. Kim, 1993: 118-139). The economy was confronted by the structural problems exemplified by labor militancy and demand for higher wages. This resulting crisis in the CDS, triggered by the consequences of the deepening of problems associated with rapid industrialization, advanced the political crisis. The success and failure of resource allocation, for instance, in implementing the heavy chemical industrialization policy in the late 1970s, led to both economic strains and acute crises in authoritarian politics (Moon, 1988: 67-84). The activation of popular sectors in civil society, including labor demands and student protest movements, also contributed to the onset of political crisis in the late 1970s. The assassination of President Park Chung-Hee in October 1979 was preceded by political disturbances, including antigovernment riots in the Pusan and Masan areas and the Y.H. Company labor disputes in Seoul in 1979. The strikes and sit-in demonstrations, led by female textile workers of the Y.H. Company in Seoul, became a political issue, as the opposition party supported their higher wage demands and protest. Kim Young-Sam, then the opposition leader in the National Assembly, was forced to resign and was expelled from parliament because of his antiregime stance. He was voted out of the National Assembly on the grounds of violating the provision of the emergency decree enacted by an earlier rubber-stamp legislative body of Park Chung-Hee's Yushin Korea. This episode weakened the authoritarian regime control and grip of the CDS and helped to precipitate the political crisis.

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Political Repression Under Chun Doo-Hwan Park's assassination created a political vacuum that was temporarily filled by Prime Minister Choi Kyu-ha, who as acting president restored law and order with the help of the martial law command. A coup-like rebellion within the military, however, was soon waged on December 12, 1979. It was led by then-major general Chun Doo-Hwan, who, as chief of Defense Security Command, pressed the Choi government to declare a state of national emergency. The collapse of the Fourth Republic, called the Yushin system, led to a brief interval of political relaxation, dubbed by prodemocracy forces as "the springtime of democracy" early in 1980. With the collapse of Korea's Fourth Republic (19731979), the opportunity for democratic restoration and transition was opened up in 1979-1980. However, this democratic opening and transition did not materialize and, instead, the economic and political crises led to the reassertion of military rule under Chun Doo-Hwan and his associates. A second military rebellion was engineered and carried out by Chun Doo-Hwan and his associates on May 17, 1980. This eventually led to a series of widesprea:l street demonstrations throughout the country in opposition to new authoritarian political order. Prodemocracy protests in the city of Kwangju in South Cholla Province, on May 18, became a full-scale riot, which led to bloody suppression by government forces. Under martial law, Chun also acted to produce a blueprint for new authoritarian political order by launching; on May 31, 1980, the Special Committee for National Security Measures, with a junta-like thirty-one-member Military-Civilian Standing Committee (Kihl, 1984: 74-90). Subcommittees of this body made all key state decisions. Shortly after the resignation of the short-lived post-Park government of President Choi Kyu-hah on August 16, 1980, General Chun (who was rapidly promoted to full general) resigned from active duty. He was then elected president by a vote of 2,525 to 1 by the rubber-stamp electoral college called the National Conference for Unification. Chun was sworn in on September 1, 1980. A government-appointed special committee, working behind the scenes, delivered the revision of the ROK constitution on September 29, 1980. This was approved in a national referendum-under martial law-on October 22, 1980. On that day, the eighty-one-member Legislative Council for National Security replaced the Special Committee for National Security Measures, also appointed by Chun Doo-Hwan. This body lasted until the newly elected National Assembly replaced it on March 25, 1981. This election was held with heavily restricted campaigning and political bans on suspended politicians whose political rights were deprived by the council. Under the new constitution, Chun Doo-Hwan became president of a newly launched Fifth Republic (1981-1988) on March 3, 1981, and started his seven-year term in office. 9 The regime's determination to impose authoritarian political control over civil society was manifest in the use of military force against the political

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dissident and protest groups (Gleysteen, 1999: 127-130; Wickman, 1999). The bloody suppression of the Kwangju riots by Chun 's Special Forces aggravated the situation. The Kwangju uprising, lasting from May 18 to May 27, 1980, began as a popular protest movement against the proclamation of a nationwide martial law. The militant university students at Chonnam National University initially staged an antigovernment street demonstration; they were subsequently joined by the concerned citizenry in Kwangju. The city of Kwangju was Korea's fourth largest and the capital of South Cholla Province. It was also the home province of dissident politician Kim Dae-Jung. The forceful suppression of the Kwangju uprising resulted in 191 official dead and several thousand wounded, although an eyewitness account puts the figure much higher (Clark, 1988: J. Lee, 1999). One source estimates a minimum of six hundred killed and a maximum of two thousand wounded (Cumings, 1999a: 114). This tragic episode left a deep schism in South Korea's body politic. The symbol of the Kwangju uprising as an antiregime political protest was said to be an albatross around the neck of President Chun. The political instability and turmoil weakened the legitimacy of the rule of President Chun Doo-Hwan. To restore a semblance of political legitimacy, the Chun government called for the parliamentary election due in 1981 on March 25. In this eleventh National Assembly election, the ruling DJP won only 35 percent of the votes, but through a proportional representation scheme it was able to control 55 percent of the National Assembly seats. This produced a modicum of political stability in the first half of Chun's term. In the twelfth National Assembly election, four years later on February 12, 1985, the ruling DJP once again failed to increase its parliamentary position. The election brought about an unexpected parliamentary victory of the opposition parties. As the ruling DJP failed to control a two-thirds majority in the legislature, which is necessary for an automatic majority for the passage of important legislative acts including constitutional amendments, the Chun government was now forced to adopt a new strategy of cultivating a working relationship with the opposition in parliament. However, the emboldened opposition forces now began to wage a nationwide campaign for constitutional amendment measures to bring about an orderly political change and reforms of the constitutional order. A political stalemate soon resulted from an opposition boycott of the legislative sessions that lasted for one year. This forced the Chun government to agree, in 1986, with the opposition demand to set up a special parliamentary constitution revision committee. The strategy of Chun's ruling party was to involve the opposition in a compromise resolution that would further constitutional amendments (Kihl, 1988b: 75-90). Initially, the opposition party leadership within the legislature was willing to make a deal with the ruling party. This was, however, challenged by Kim Young-Sam, who acted to establish his own opposition party outside the legislature and to continue the prodemocracy campaign against Chun 's Fifth Republic.

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This tug-of-war between the regime and political opposition, subsequent to the 1985 National Assembly election, provided the setting and context for the political crisis and showdown in the summer of 1987. These protests were led by the democratic resistance movement in the civil society outside the legislature. After nearly two decades of continuous rapid economic growth, South Korea in 1980 registered a negative growth rate of -5.2 percent in GNP, for the first time. This was no doubt affected by the worldwide economic recession abroad following the 1979 world energy crisis and was exacerbated by widespread domestic violence and political turmoil. Authoritarian Withdrawal by Design?

By 1987, however, Roh Tae-Woo emerged as Chun's successor. The Chun authoritarian regime managed to restore its grip on the economy and to continue its export-led expansion and repression of popular sectors, including organized labor and protesting students. Whether Chun's "authoritarian withdrawal" was by default or by design cannot be proven conclusively without clear evidence of testimonials given or memoirs written by Chun Doo-Hwan and his associates. What seems clear from the reading of public statements made by the leaders and the subsequent political actions taken by the Chun government, however, is that the authoritarian regime had set up its own timetable at the time of its inauguration of the Fifth Republic in 1980. This amounted to a public pledge and the possibility of its withdrawal from politics by early 1988 with the completion of a single sevenyear term in office, as stipulated in the eighth amendment to the constitution proclaimed on October 27, 1980. The political focus ofChun's rule in 1986 was to ensure an orderly transfer of power in 1988. This consisted of a program for revitalizing party politics through strengthening the ruling DJP. His subsequent strategy was to promote an interparty dialogue with the major opposition, the New Korea Democratic Party (NKDP), on the matter of revising the constitution, which he hoped would be put to a referendum in 1987 and would soon be followed by a general election. From Chun's vantage point in the summer of 1986, the process of party politics had finally become revitalized and lively, because the arena of politics was shifting from confrontation outside the parliament to interparty negotiation within the National Assembly. Following a series of meetings held in early June 1986 between President Chun Doo-Hwan and each of the two opposition party leaders, a consensus emerged on a way to overcome the political crisis. The DJP yielded to the NKDP demand for the creation of a basic law-revision committee in the National Assembly. The forty-five-member Special Constitution Revision Committee was set up in the National Assembly to be led by a ruling party member as chair, but divided equally between the ruling party and opposition parties in parliament. Under this formula, the membership consisted of twenty-three members from

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the DJP, seventeen from the NKDP, four from the second opposition Korea National Party, and one from the independents. On the substantive issues of how to revise the constitution, however, the fragile interparty consensus would break down, unless a quid pro quo solution was attained. The ruling DJP was seeking a cabinet-responsible parliamentary form of government, while the NKDP subscribed to a presidential form of government based on direct popular election. The Fifth Republic constitution was based on the presidential government system and the power was concentrated in the executive branch, with a weak legislature and a subordinate judiciary and with the president chosen indirectly by an electoral college. Ironically, the positions of the ruling and opposition parties on constitutional revision were sharply in contrast with their historical stands. Historically, the minority parties in Korea tended to support the cabinet form of government, while the ruling majority party supported the presidential form of government. During the First Republic ( 1948-1960), the ruling Liberal Party caused the constitutional amendment that brought about a presidential form of government, while during the Second Republic ( 1960-1961 ), the Democratic Party, as the predecessor of the subsequent NKDP, had an opportunity to put the parliamentary system into effect. During the Third and Fourth Republics (1961-1979), the presidential form of government was enshrined in the constitution, while the opposition held its preference for the cabinet system of government. But in 1986, the positions of the respective parties on the structure of government were completely reversed. Whereas the 1979-1980 political and economic crisis failed to produce a democratic transition, the 1987 political crisis was undertaken in economic "good times" rather than "hard times." The Korean economy in 1979-1980 was clearly in difficulty, with the inflationary pressure of the consumer price index rising from 18.3 percent in 1979 to nearly 30 percent in 1980 and the GNP growth registering a negative growth rate of -3.3 percent for the first time, down from 7.0 percent growth in 1979, and the slowed export growth and worsening of the current-account deficit associated with the oil crisis of 1979 (Haggard and Kaufman, 1995: 83-84). The Korean economy in 1986-1987, however, was better off, with an efficient macroeconomic and trade policy that established better control over fiscal and monetary policy. The Korean economy in 1987 was the beneficiary of the so-called three blessings or three lows-low interest rates, low oil prices, and a depreciated won to dollar exchange rate. The Korean economy was also boosted by massive public investments, associated with an infrastructure-building project for the 1988 Summer Olympics in Seoul. The 1987 authoritarian withdrawal of Korea's Fifth Republic, therefore, can be regarded as what Haggard and Kaufman call "withdrawal in good times" economically or the "delayed" democratic transitions following the failed transition in 1979-1980. Despite the authoritarian political practices of repression and human-rights violations, the Chun government was able to restore stability and stabilization of the growth-oriented economy of his predecessor by adopting an economic adjustment plan and pushing its implementation vigorously.

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Table 3.1

Korean Economic Performance, 1983-1987: Select Indicators Indicators: Annual economic growth rate (%) Inflation: CPI increase (%) Fiscal deficit/GOP ratio increase(%) Current account/GOP ratio increase(%) Investment/GOP(%) Real wage increase ratio(%)

1983 10.7 3.4 -1.0 -2.0 28.8 7.4

1984

1985

1986

1987

8.2 2.3 -1.2 -1.5 29.8 6.2

6.5 2.5 -1.3 -1.0 29.3 6.7

11.0 2.8 -0.1 4.4 28.3 5.3

11.0 3.1 0.4 7.5 29.5 6.9

Sources: World Bank, World Tables 1993 (Washington, D.C.: World Bank, 1994); International Monetary Fund, international Financial Statistics Yearbook, various issues; "Major Statistics of Korean Economy," National Statistical Office, Seoul, 1995: 9. The data on Fiscal Deficit/GDP ratio increase(%), Current Account/GDP ratio increase (%) and Investment/GOP(%) are calculated by using the data on fiscal deficit, current account, and investment (www.nso.go.kr).

Chun gave full backing to his economic team, even if the political effects of economic reform were largely negative for the government. Also, stabilization measures, and particularly credit policies, placed the government and the private sector at loggerheads throughout the early years of his administration. Other reform measures, such as the lifting of subsidies to agriculture and controls on government wages, were struck at previous sources of regime support (Haggard and Kaufman, 1995: 90; Haggard and Moon, 1993: 210--237). Table 3.1 shows the picture of"stellar" performance of the Korean economy during most of the 1980s, especially at the time of Korea's authoritarian withdrawal and democratic transition. Despite weak legitimacy from the very outset, the Fifth Republic under President Chun enjoyed the popular expectation and a residue of a wider support for the promise of socioeconomic progress. Most Koreans in 1980 seemed to welcome the end of political uncertainty following the assassination of former president Park Chung-Hee and looked forward to the resumption of political stability and rapid economic growth. The negative legacy of President Chun's authoritarian rule, however, included political repression of student activists, suppression of opposition forces, the exclusion of organized labor, denial of the free press, and a poor record on human rights. On the more positive side, however, state autonomy and capacity continued to be strong. Even if the legitimacy of the regime was weak and questionable, state capacity expanded in several crucial and important areas. The Chun government managed to restore and sustain the dynamic growth of the economy, to strengthen security through an increased alliance partnership with the United States and Japan, and to resume inter-Korean negotiation and dialogue on unification. Korea's authoritarian withdrawal in good times was thus engineered and seemed almost to have been prearranged. Military cohesion allowed Chun from the very

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beginning to count on the support of the military and police apparatus. With the political opposition forces divided, and with big business either acquiescent to or fundamentally supportive of the authoritarian project, Chun was able to consolidate and maintain his grip on power during the eight years of his tenure. The combination of favorable external conditions, continued high levels of investment, and the reform measures themselves allowed the Chun government to reestablish the country's strong growth record with substantially lower inflation (Haggard and Kaufman, 1995: 91). The government's underlying strategy was to persist in the successful export-oriented policies that his predecessor Park ChungHee had initiated in the early 1960s. This economic success through political stability constituted a powerful constraint on the subsequent democratic politics that we will examine next. In the summer of 1987, political crisis was avoided by the pronouncement for democratization adopted by Roh Tae-Woo, then successor to President Chun DooHwan. Timed with the upcoming 1988 Olympics in Seoul, the world's attention was focused on political stability in South Korea. Popular demonstrations led by democracy movement forces extracted a concession and promise for liberalization of politics from the military elite of South Korea's authoritarian regime. The June 29 pronouncement promised to restore democracy and carry out democratic reform, including holding a popular presidential election (Kihl and Kim, 1988). We turn next to examine, in more specific details, the process of how political change and democratization unfolded that Jed to the eventual founding of the Sixth Republic on the eve of Seoul hosting the 1988 Summer Olympics. Democratic Opening and Political Change of 1987 A heightened popular demand for political participation and the external impact of the worldwide trend toward democracy exerted pressure on South Korea to accelerate the process of the country's political transition. The key to South Korea's initial success in democratization lies, as James Cotton argues, not only in popular demands for political participation, but also in the willingness of elites to recognize them as unavoidable consequences of socioeconomic modernization (1989: 244). The South Korean experiment in democratization thus required both the regime and the popular sector, as well as their interaction, to bring about political change. The Korean case of democratic transition was particularly timely and illustrates the difficulties and dilemmas faced by a rapidly industrializing country in bringing about an orderly and peaceful political change in a timely fashion. By 1985-1986, it became clear that the ongoing interparty struggle in parliament over the future shape of the constitutional order would provide the context for political stability or change in the Sixth Republic. In this sense, the constitutional revision politics of 1986-1987 were a prelude to the 1987 political crisis. The political conflict was resolved, in the end, by the formula of the "grand compromise" of August 1987. But the 1986 stalemate in constitutional revision politics, as discussed previ-

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ously, had served as a bellwether of things to come and as a useful forecast of the gathering political storm forming over South Korea in 1987. Political Development in 1987

An attempt to introduce "democratic reform" to South Korea's authoritarian rule was initiated, under the shadow of worsening political violence, in the summer of 1987. Serious constitutional crises flared up in June 1987 as the rock- and firebomb-throwing university students clashed with the tear gas canister-throwing combat police. The violent street demonstrations in the summer of 1987 could not easily be contained. The reason was that some middle-class citizens began to express their sympathy with demonstrating students and to side with the student demands for restoring democracy. The deepening crisis placed the fragile constitutional structure of the Fifth Republic under stress, pushing the system close to the edge of collapse. After weeks of intense political threat and maneuvering by politicians, a formula of grand political compromise was finally produced to avert the political crisis. An eightmember constitution drafting committee, representing both the ruling and the major opposition parties, produced the text of a new constitution on August 30, 1987, after a four-week marathon session. In arranging for this breakthrough agreement, the ruling party representative Roh Tae-Woo and the opposition party leader Kim Young-Sam played key roles. The opposition NKDP was split when Kim Young-Sam announced, on April 8, his departure from the party to set up a separate political party, the Reunification Democratic Party (RDP), after giving a vote of nonconfidence to party leader Lee Min-woo's ongoing discussion with the ruling DJP on constitutional revision. Five days later, President Chun Doo-Hwan announced his intention to suspend the talks with the opposition on a constitutional amendment until after the 1988 Olympics in Seoul; this announcement followed the split of the opposition party. The ruling DJP held its party convention, on June 10, to nominate Roh TaeWoo as its presidential candidate. But this event triggered a well-timed university student protest movement and the Myongdong cathedral in downtown Seoul was taken over by radical students. Even though the student demonstrations were constrained by combat police, citizens generally were sympathetic with the student cause. On June 29, Roh Tae-Woo announced an eight-point democratic reform measure, which he entitled "Grand National Harmony and Progress toward a Great Nation," that included fair and direct presidential elections, the key demand of the opposition political parties. Also announced was the release of political prisoners. The list of proposed reforms included: 1. A constitutional amendment for a direct presidential system (the key demand of the opposition camp)

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2. A revision of the Presidential Election Law 3. Political amnesty and a restoration of civil rights to dissident leader Kim Dae-Jung 4. Protection of human rights 5. Promotion of the freedom of the press 6. Local autonomy and self-governance 7. Reform of political parties 8. Social reforms for building "a clean and honest society" Since the key opposition demand of constitutional revision was accepted, the dark cloud hanging over the political landscape dissipated. Two days later, President Chun Doo-Hwan announced that he would accept Rob's recommendation. Overnight, a new modus operandi of interparty dialogue and negotiation began to emerge in South Korean politics. Subsequently, Roh TaeWoo and Kim Young-Sam met and agreed on an eight-member working group to draft a new constitution. The text of the new constitution, drafted on August 30, was submitted to the National Assembly for deliberation. Three days later, on September 2, Kim Young-Sam and Roh Tae-Woo agreed to hold the referendum on the constitutional amendment before the end of October and to hold a popular presidential election before December 20. While the National Assembly was deliberating the new constitution, the major political leaders were busy testing the political waters to decide what their next moves would be. Roh Tae-Woo left on a U.S. visit, on September 13, and also stopped in Tokyo on the way back. Kim Dae-Jung decided to test the water by touring his home constituency in the Cholla provinces. Kim Dae-Jung and Kim Young-Sam met but failed to agree on a single presidential candidate. Each urged the other to make concessions on the presidential candidacy. Kim Jong-Pil, the former prime minister under Park Chung-Hee and president of the then Democratic Republican Party, also indicated his plan to run for president after forming a new political party. The National Assembly subsequently approved the new constitution of the Sixth Republic on October 12, 1987, by a vote of 254 to 4. The 1987 constitutional amendment, unlike the previous constitutional amendments, was genuinely reform-oriented in the sense that it expanded the rights of the citizenry and also restored and strengthened the power of the legislature, thereby reversing the historical trend of augmenting executive power. The constitutional referendum to adopt the new constitution was held on October 27 and adopted by a record 93.1 percent approval rate of those voting. The voter turnout rate was also high, with 78.2 percent of the total 26.6 million eligible voters. Kim Dae-Jung declared, on October 28, his intention of running for president and offounding a separate party, the Party for Peace and Democracy (PPD), making his split with Kim Young-Sam official. The date of the presidential election was proclaimed, on November 16, to be December 16, 1987. The election law

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stipulated that the candidates must register within seven days of the proclamation and that electoral campaigns would be allowed for thirty days; five major party candidates vied for the election. In the summer and fall of 1987, dramatic events took place to restore democracy in South Korea. The political system of the Fifth Republic was dangerously close to the edge of defiance and decay, although it was rescued from total collapse at the last minute. When the presidential election was held, on December 16, Roh Tae-Woo, the governing party candidate, emerged as the winner with a plurality of 36.6 percent of those voting, followed by Kim Young-Sam and Kim DaeJung with 28 percent and 27 percent, respectively. Kim Jong Pi! received 8.1 percent of the vote (the remaining 0.3 percent going to the fifth candidate). This led to the inauguration ofRoh Tae-Woo as the first president of Sixth Republic on February 25, 1988, to serve a single five-year term (1988-1993). Political Risk-Taking (Gamble) That Paid Off In its attempt to silence the political opposition forces in and outside parliament, the ruling DJP (with Roh Tae-Woo as its newly elected president) launched an initiative on democratization as a new policy. Roh declared that his new policy was intended to save the country from a worsening political crisis and to pursue the goal of progress and consolidating its gains (i.e., economic development and political democracy). 1 Figure 3.1 shows the political situation of confrontation between the ruling party and political oppositions on the eve of the June 29, 1987, crisis in South Korea's Fifth Republic .. The ruling DJP in parliament, which controlled approximately 160 seats out of the 276-seat National Assembly, was not strong enough to prevail over the opposition NKDP that successfully captured 116 seats in the February 1985 National Assembly election. It lacked twenty-four seats of the two-thirds majority required to pass important legislative bills and possibly a constitutional amendment that would ensure control of the National Assembly. Prior to 1987, during the authoritarian phase of South Korean politics, the ROK president as head of the ruling party dictated policies and policy making in the parliamentary arena. It became clear, however, that the ROK president no longer was in a position to dictate his policies without involving the oppositi Al parties in the National Assembly. The opposition in parliament was, in turn, in close consultation with the democracy movement groups in civil society. The changed context of policy making can best be captured as in Figure 3.1, which reflects political opposition in both parliamentary and societal arenas. On the issue of constitutional revision, the two opposition groups in parliament and civil society made a grand alliance of prodemocracy forces. Confronted by the worsening political crisis caused by an escalating conflict between opposition forces and the Chun regime, Roh risked his political career by issuing the eight-point proposal for democratic reform. When Roh Tae-Woo, as

°

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Figure 3.1

Interaction of Key Actors During the 1987 Political Change

Parliamentary Arena

Opposition (NKDP, RDP)

Societal Arena

Opposition (Civil Society Groups)

The Ruling Party (DJP)

chairman of the ruling DJP, demanded that President Chun Doo-Hwan accept his announced reform packages, he was perceived as acting alone. But his action was quickly endorsed by President Chun. The escalating street demonstrations necessitated an attempt to meet the opposition's demand for democratic reform both in and outside parliament in civil society. What was crucially important for the ruling party decision to compromise was that the citizens in Seoul, who witnessed the violent clashes between radical students and the police on the Myongdong cathedral compound, were generally sympathetic with the student cause. Also, international threats to either boycott the 1988 Olympics in Seoul or change the venue of the Olympic Games worked to persuade the regime that it had no alternative but to accept opposition demands. The national honor of hosting the twenty-fourth Olympiad in Seoul was a doubleedged sword: "a great constraint" to the authoritarian regime and "a window of opportunity" for the democracy movement forces for waging their protest. The International Olympic Committee would have been forced to change the venue of the games if the Chun government had declared martialla w to suppress the peaceful protest in 1985. Instead, Chun made an unexpected concession in April 1986 by going ahead with his support of the National Assembly deliberation of the constitutional amendment, as already noted.ll Once concessions were made, the political process of negotiation between the ruling party and the opposition in parliament moved rather quickly and smoothly. In the December 18, 1987, presidential election, the opposition party leader could have easily won the election to form a government, thereby completing the chapter of South Korea's long struggle for democracy. However, this is not what happened, because the opposition camp was hopelessly fractured into competing factions. The two opposition party leaders, Kim Young-Sam and Kim Dae-Jung, failed to join hands to produce a single presidential candidate to oppose the ruling party candidate, contrary to their repeated public pledges on the eve of the 1987 presidential election campaign (Kim and Kihl, 1988). The failure to produce a single candidate in the democracy camp made it pos-

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sible for the ruling party candidate, Roh Tae-Woo, to win the four-way contest with three Kims in opposition: Kim Young-Sam, Kim Dae-Jung, and Kim Jong Pi!. The third Kim was an opportunist politician whose chance of winning the presidency was not very high. He was a former prime minister who had served under President Park Chung-Hee of the Third and Fourth Republics ( 1961-1979). President Roh was a former military general and a handpicked successor to the discredited outgoing President Chun Doo-Hwan. The two rival candidates, Kim Young-Sam and Kim Dae-Jung, together polled a total of 55 percent of the votes, a large enough plurality to have won the election. It is clear, in retrospect, that an institutional procedure for a run-off election between the first two candidates, who received the largest plurality of votes but failed to receive a simple majority, would have avoided the resulting election of a minority candidate. Nevertheless, the inauguration of Roh Tae-Woo as the first president of the Sixth Republic on February 25, 1988, marked the first peaceful transfer of power in the republic's forty-year history. When judged from a comparative perspective, it seems that South Korea's democratic transition progressed smoothly. However, Chun Doo-Hwan and his associates were criticized for spoiling the historical opportunity for South Korea's democratic transition in 1979 after the assassination of former president Park ChungHee. It was clear that it would have been possible to avoid the successor state of the Fifth Republic leadership of the military-turned-civilian leader, President Chun Doo-Hwan, if the opposition forces had been politically organized and united. What was less clear is that without the third democratic juncture ( 1984-1987) the smooth and dramatic democratic transition to the democratic Sixth Republic in 1987 might not have occurred. The process of democratic transition has had its own ups and downs as well as unforeseen turns and twists. In this sense, the story of the South Korean journey toward democratization is an ongoing process. Its experience will need to be evaluated from the perspective of both comparative and theoretical analyses of what could have happened to Korea, if an alternative path were taken in 1979-1980. Park Chung-Hee's authoritarian grip on power on the eve of his 1979 assassination, symbolized by the Yushin system instituted in December 1971, was met by an equally determined and efficient underground political resistance. 12 In his memoirs, published in January 2000, former president Kim Young-Sam recalls his face-to-face encounters with three of his predecessors while he was engaged in the prodemocracy movement and antiregime campaigns prior to 1987. Kim was bitter about the political repression that he personally endured in the 1970s under Park Chung-Hee's authoritarian rule. Park had the Korean CIA search his house four times and placed him under house arrest. At one point, Kim recalls exclusive face-to-face meetings that he had with Park Chung-Hee, on May 21, 1975, and with ChunDoo-Hwan, on June 24, 1987. Kim's encounter with Chun was animated, he emphatically urged Chun to accommodate his democratization cause. As Kim notes:

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I emphasized to Chun, "Accommodation of democratization is the only way for the country to surmount the current crisis and for you to survive." Whenever difficult issues came up, Chun persisted that I discuss the matter with Roh Tae-Woo. When he informed me of a lunch appointment, I countered: "Is there anything more important than the subject we are discussing?" Then Chun had his appointment cancelled through an internal phone. Chong Wa Dae announced "I expressed thanks," which was untrue. I had nothing to thank Chun for. (Kim Young-Sam, 1999: 2) In this same memoir, Kim Young-Sam seems to have a more sympathetic and compassionate viewing toward former president Park: My exclusive talk with Park Chung-Hee took place on May 21, 1975. Hearing my consolation over the assassination of his wife a year previously, he said, pointing at some birds fluttering outside the window, "I'm like those birds," and wiped tears from his eyes with a handkerchief. When I told him that I'm a democrat, Park was quoted as saying, "With my wife shot to death by a Communist, I've no intention to live long in such a temple-like place. Give me some time." Had he not wept,! would have asked him, Kim continues, "When do you intend to resign?" But his (Park's) tears softened my resolve to press him further. Park then told me, "Were my presidential resignation known in advance, strange guys would emerge immediately. Many problems would arise impeding the conduct of my presidency. Consequently, I promised to keep what he said secret." (1999: 1)

If we are to give face value to what Kim Young-Sam writes about his 1975 meeting with Park Chung-Hee, it seems that Park was even considering an authoritarian withdrawal from politics four years before his assassination in 1979.1 3

Analyzing the Political Economy of Democratization In analyzing the political economy of democratization, two theoretical questions regarding the causes and consequences of democratic transition will need to be addressed.14 Who were the principal actors and agents responsible for bringing about political change and the democratic transition? What consequences, both intended and unintended, arose from the democratic transition in regard to the trade-off between regime types and policy payoffs? Answers to the first question were given in the preceding discussion of the unfolding political drama of 1987, and the step-bystep progression of the dynamic of political change. To answer the second question, we tum next to the policy outputs in the areas of attempted democratic consolidation and actual economic growth, with particular attention to the success and failure of economic policies during the administration of President Roh Tae-Woo.

Democratic Consolidation Under Roh Tae- Woo During his campaign for the presidency, Roh made a promise that, if elected, he would do his best to usher in what he called "a great era of ordinary people." Although vague, he apparently intended to introduce an era of popular democracy

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in which all Koreans would have equal access to the political process and a welfare society where all Koreans would be able to enjoy a decent standard of living (Kihl and Kim, 1988: 243-251). Roh's promise raised popular expectation and led to the enhanced political involvement of what Roh termed "the common man" or the middle-class citizenry in the electoral process. 15 Despite Roh's electoral victory, the ruling Democratic Justice Party (DJP) failed to capture a simple majority in the subsequent twelfth National Assembly election on April 26, 1988. This created the phenomenon of yoso yadae (ruling minority and opposition majority) in Korean politics, where a "hung parliament" could not function effectively to enact major legislative bills. While Roh Tae-Woo's DJP won 125 seats in the 299-member unicameral legislature, Kim Dae-Jung's Party for Peace and Democracy (PPD) captured 70 seats, Kim Young-Sam's Reunification Democratic Party (RDP) claimed 59 seats, and Kim Jong Pil's New Democratic Republican Party (NDRP) had 35 seats, with the remaining 10 seats going to others, including Independents (H. Kim, 1989). The 1988 parliamentary elections showed that, while urban voters predominantly supported the opposition parties, the Korean parties were hopelessly divided according to their regional interests. Whereas Roh's DJP support came from the Yongnam region (including the third largest city of Taegu), Kim Dae-Jung's PPD was the sole winner in the Honam region (including the fourth largest city of Kwangju). Kim Young-Sam's RDP strengths lay in Kyongnam Province (including the second-largest city, Pusan), while Kim Jong-Pil's NDRP support came exclusively from the Chungchong provinces. All four presidential candidates were favorite sons of their respective home provinces and regions. In an attempt to break the deadlock in parliament, President Roh Tae-Woo, Kim Young-Sam, and Kim Jong-Pil announced a remarkable and drastic measure: a threeparty merger on January 22, 1990. Together, they founded a new Democratic Liberal Party (DLP), leaving Kim Dae-Jung's PPD in isolation. The creation of a new conservative ruling coalition party broke the stalemate and restored the semblance of stability to South Korea's Sixth Republic. By skillful political moves and negotiation, South Korean politics moved from the 1988 system of "the four-party stalemate" to the 1990 system of ''the conservative alliance" (Park, 1990). As a result of this three-party merger, which was called an "unholy alliance" of two Kims with Roh, the new ruling coalition ofDLP now controlled 217 of299 seats in the National Assembly. With a working majority now obtained in parliament, President Roh's administration was able to focus on the passage of major legislative bills through parliament and to take on new initiatives in foreign policy, including the Northern policy (or Nordpolitik) and the inter-Korean dialogue with North Korea. On the matter of three parties merging in 1990, opinions were generally divided as to who took the initiative toward the notion of "grand compromise" to begin with: it was described as a political gamble by Kim Young-Sam (M. Lee, 1990: 127-138). The conventional view is that it was brokered by Kim Jong Pil, as the leader of the weakest partner of the NDRP, who persuaded Roh Tae-Woo of the

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DJP to join hands with Kim Young-Sam's RDP. The Roh Tae-Woo camp also claimed that the three-party-merger plan was the brainchild of the ruling DJP, an attempt to save the nation from the unfolding crisis of political stalemate and immobilism in the National Assembly. The recent release of former president Kim Young-Sam's memoirs, however, gives a different version of Kim taking the initiative on the idea "to bring about a seismological change in Korean politics." During an exclusive meeting Kim YoungSam had with Roh Tae-Woo in June 1989 on his return from a trip to Moscow, the idea of merging the parties was made by Kim as a counterproposal to Roh TaeWoo's plea and proposal for a policy alliance, so Kim Young-Sam claims (Kim Young-Sam, 1999). The ruling conservative coalition, based on an expedient marriage of convenience, produced "three parties under one roof' that suffered from occasional political in-fighting. Many of Kim Young-Sam's followers, for instance, felt "betrayed" by what they perceived as Kim's "unprincipled" political maneuvers: switching his long-standing position as an opposition leader to join the conservative coalition (Oh, 1999: 118). Clearly, Roh Tae-Woo enhanced his political stance by obtaining support from the two Kims in parliament, while Kim Young-Sam used the occasion to capture the possible DLP nomination as next presidential candidate for the 1992 election and Kim Jong Pi! waited to benefit from his successful role as power broker. It was no surprise that the voters gave the ruling party less than overwhelming support in the thirteenth National Assembly election held on March 24, 1992. In so doing, the Korean voters resoundingly repudiated the machinations of the three politicians (New York Times, March 27, 1992). The ruling DLP managed to win only 149 seats of the 299-seat National Assembly, one vote shy of a simple majority, despite the three-party merger early in 1990. The opposition Democratic Party (DP), led by Kim Dae-Jung, won ninety-seven seats, and the Unification People's Party, organized only two months before the election by Chung Ju-yung, the honorary chairman of the Hyundai group, won thirty-two seats. Chung had campaigned on a platform that criticized the government's handling of the economy. The government party mustered a simple majority vote in parliament only by wooing some of the independently elected assemblymen. According to a constitutional provision, President Roh Tae-Woo could not succeed himself after completing his five-year term in 1993. During his tenure, President Roh was credited with three major accomplishments: domestic reforms, Nordpolitik, and inter-Korean dialogue (Korea Review, June 27, 1992: 4; February 22, 1992: 4-5). Of the three major policies promoted by President Roh, the Nordpolitik was the most successful, while democratization and inter-Korean dialogue found limited success. Democratization of politics enhanced South Korea's international standing and diplomatic status. Roh's gesture on promoting a domestic agenda of reform, no doubt, helped the regime's foreign policy in successfully attaining the objectives of Nordpolitik (see Chapter 7).

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Inter-Korean dialogue resulted in a mixture of success and failure. Given the great interest in and desire for achieving national reunification, Roh wanted to see further progress made in inter-Korean relations before he stepped down as president in February 1993. This desire to bring reunification to Korea was the motivating factor behind the signing of a series of agreements with North Korea in 1992. However, implementing these agreements was painstakingly slow. There was no substantive progress on the North-South Korean Red Cross talks, regarding the reunion of divided family members. The proposal was important for aging Koreans, who would be allowed to travel and meet with lost family members across the border. This basic humanitarian cause was not achievable, however, because of the intransigent political stance of a North Korea that was then intent on keeping its population isolated from adverse external influences. Democracy or democracy building during Rob's term was far from an accomplished fact. Many of his efforts at promoting a democratization agenda, like the freedom of the press, were positively evaluated by his critics both at home and abroad. Although democratic gains came slowly during his tenure in office, Rob was careful not to divert progress toward full democracy for Korea (Kihl, 1990a: 67-73). Hoping to leave a positive legacy, on the eve of the 1992 presidential election Roh announced that he was resigning from the position as president of the ruling DLP to remove himself, he claimed, from a possible partisan entanglement. He then appointed a new prime minister and a neutral cabinet to manage the December 18, 1992, presidential election that would choose his successor. This unusual act was an expression ofRoh's unflagging commitment to attaining full measures of democracy through a smooth and orderly transition of power. 16 The official account stated that more than 98 percent ofRoh's campaign promises on a reform agenda had been carried out, a claim to be taken with skepticism. The list of some of these pledges, totaling 459 measures, were featured in a special issue of Seoul's Sisa Journal that focused on the assessment of Rob's Sixth Republic (Sisa Journal, November 26, 1992: 52-53). Unlike his predecessors, Roh wanted to make certain that his successor's regime would enjoy a full measure of legitimacy accrued from an open and fair election. This self-promotive account of the alleged accomplishments of the Roh Tae-Woo administration must be taken with a grain of salt. A listing of forty-four major policy mistakes were noted and likewise publicized in 1992 in the publication of the Consultative Association of Academic Organizations (Sahoe Pyongronsa Monthly, 1992). The fourteenth presidential election of December 18, 1992, which resulted in the victory of the ruling DLPcandidate Kim Young-Sam, strengthened the process of democratization. The election of a civilian president, the first in thirty-two years, was certainly a milestone. The new government was challenged to continue the democratic reform agenda initiated by its predecessor.

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This presidential election campaign symbolized the coming of age of the Korean people in a thriving, albeit fragile, democracy. With the election of Kim Young-Sam, South Korea finally lived up to the goal of establishing democracy through an orderly and peaceful transfer of power (Kihl, 1992). The democratization movement, unleashed by Roh Tae-Woo's Sixth Republic, was completed and South Korea was now poised to enter an era characterized by democratic consolidation. Just as South Korea had built an economic miracle, the country proved that the political miracle of smooth democratic transition was within its reach. South Korea's 1992 presidential election, unlike the 1987 election, was less violence ridden and less emotionally charged. No street protest demonstrations or voter boycotts were noticeable in this election. Perhaps this reflected the growing confidence of South Korean voters and their resolve to build a successful democratic state. The voter turnout of 81.7 percent of the eligible voters in 1992 was not as high as that of 89.2 percent registered in the 1987 presidential election. Regardless, this figure was higher than the 80 percent projected by political pundits before the election of 1992 and certainly higher than the voter turn out in most democracies. Kim Young-Sam, running as the ruling DLP candidate, received 42 percent of the popular vote, while opposition candidates Kim Dae-Jung and Chung Ju Yung received 34 percent and 16 percent, respectively. The voting in the 1992 presidential election was relatively orderly and peaceful, and there were less frequent charges of campaign excesses and voter irregularities. The ruling and opposition party candidates, for instance, avoided the scheduled mass rallies in Seoul, although Chung Ju-Yung's third party had a public rally. While the electoral returns were still being counted, the losing candidates, Kim Dae-Jung and Chung Ju-Yung, made conceding speeches to congratulate Kim Young-Sam on his victory. This marked the first of a kind in the annals of South Korean politics. The subsequent election five years later in 1997 continued the institutionalization of an orderly political succession and the democratic politics of fair play. Roh won praise at home and abroad for his steadfast commitment to democracy and the character of the democratizing regime of the Sixth Republic. Roh had "the wisdom and guts to move his nation toward democracy and free elections, though this progress gradually eroded his party's power and his own" observed Leslie Gelb. He praises President Roh Tae-Woo's "good work of matching his word [because] Mr. Roh, pronounced No, said yes to the peaceful transfer of power, a basic principle of genuine democracy" (1992: A-13). Moreover, Roh Tae-Woo was able to solve what Huntington (1991a) calls the Praetorian problem of the potential rebellion by the military and its intervention in the political process. As a general-turned-civilian leader, President Roh curbed military power by controlling its factionalism and by pacifying the military, urging it to remain politically neutral and committed to professionalism (231-250). With the inauguration of Kim Young-Sam, the country embarked on a new path in the democratic consolidation era. As the regime-state relationship was being

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fine-tuned, the role of the state in shaping the economy was not so fine. During the phase of democratic transition, the role of the state in controlling forces in the marketplace was bound to change. State control over the marketplace within a democracy was not as strong as it had been in the predemocratization era. In fact, during the 1992 presidential campaign, all three leading candidates went on record with pledges of reducing the role of the government in the economy. This suggests that the era of the developmental state was finally over and government could no longer dictate and manage the economy. Instead, the new Korean state would become more liberal and the government would play a minimal role. The South Korean economy had become too strong and complex for the government to dictate policy. Business-government relations had changed from government-directed with intervention in the market to promoting government nonintervention and a laissez-faire marketplace. Economic Performance Under Roh Tae- Woo

Before proceeding with the discussion on the economic performance of the Roh Tae-Woo administration, it is useful to revisit the literature on the theory of democratization and clarify why the democracy movement in the Korean context culminated in an orderly process of democratic transition and consolidation. The challenge of democratic transition boils down to the two basic questions of political will and strategy. The question of whether to negotiate with the political opposition must be answered first. If the ruling elites decide to go ahead with that strategy of liberalization, the next logical question is how to conduct negotiations with the opposition. The more substantive questions of where to draw the line in a compromise settlement and how fast or slowly to proceed with liberalization measures also arise. Since political uncertainty becomes an inherent part of the process of political change toward democratization, the ruling elites of an authoritarian regime must be willing to negotiate and bargain for an outcome of the political settlement that is clearly favorable and advantageous to themselves. The important question in this regard is the timing, the shape, and the form of the constitutional order to be arranged in negotiation with the opposition. The question of whether to allow general elections and, if so, what types of elections and at which levels, had to be dealt with. Constitutional amendments and referenda would be a safer and more orderly procedure for both the regime and the opposition to follow. The details of the procedural questions regarding holding elections, such as the time schedule, also needed to be worked out. During democratic transition, civil society becomes activated and state autonomy is correspondingly constrained (Cotton, 1991). Since the democratizing regime can no longer exclude the popular sectors of the labor union and working class from the political process, it usually develops popular policies tailored to their needs in order to solicit their support. For example, the fifth Five-Year Plan of

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Economic Development adopted by the Chun government included new social goals and expanded its task to address the question of social welfare. The sixth Five-Year Plan was redefined to encompass the goals of building the welfare state. Also, during his tenure in office, Roh Tae-Woo felt compelled to carry out his campaign promise of building 2 million apartment units to ease the housing shortage. Unfortunately, the result was to overheat the economy and divert funds from needed investments. Roh's accomplishments included, among others, planned cities where highrise apartment complexes were built, such as the new cities of Bundang and Ilsan near Seoul. During the democratization process, intellectuals became more vocal and open in articulating their democratic values and norms. They began to exert pressure on the regime to incorporate these liberal norms in the reform agenda. University students also became more active and vocal in their demands for participation in campus self-governance. Popular elections for representatives, both at the national and local levels, were also inaugurated to provide popular input into the policy-making process. As the middle class became politically more attentive, the democratizing regime and state were pressured to promote and protect the interests of a larger number of constituencies and interest groups (Cheng, 1990). With an activated civil society now in full swing, the regime saw no recourse other than to address the popular concerns and demands expressed by interest groups for participation in the policy process. During the five-year term of the Roh Tae-Woo administration, the Korean economy continued to grow, but not as quickly as it did during the Chun era. The Korean economy also experienced high inflation and land price speculation. In the context of South Korea's democratic transition, the regime type of either authoritarianism or democracy seems to have bearing on public policy outcomes, especially on the making and implementation of economic development policy (Cheng and Krause, 1991: 3-25). The historic task of putting the ideas of modernization into practice via the strategy of rapid industrialization was fulfilled by the authoritarian regimes of President Park Chung-Hee in the Third and Fourth Republics (1961-1979) and President Chun Doo-Hwan of the Fifth Republic (1981-1988). However, South Korea's democratic state in the Sixth Republic of President Roh Tae-Woo (1988-1993) was not successful in sustaining as high an economic growth rate as its predecessors, although it was able to fulfill the minimum requirements for maintaining the momentum of a growth-oriented economy. Democratization and Economic Growth According to the skeptics, South Korea's twin objectives of political democratization and economic growth were not compatible as policy goals. During the tenure of President Roh Tae-Woo, the country managed to attain a reasonable economic

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Table 3.2

Korean Economic Performance, 1988-1992: Select Indicators Indicators: Annual economic growth rate(%) Inflation: CPI increase(%) Land price increase (%) Real wage increase ratio(%) Unemployment ratio(%)

1988 10.5 7.1 27.5 7.8 2.5

1989

1990

1991

1992

6.1 5.7 32.0 14.5 2.6

9.0 8.6 20.6 9.4 2.4

9.2 9.3 12.8 7.5 2.4

5.4 6.2 1.3 8.4 2.5

Source: Bank of Korea, Economic Statistics Yearbook, various years; also cited in D.J. Kim, 1996: 25, 73, 87; "Major Statistics of Korean Economy," National Statistical Office, Seoul, 1995: 137 (www.nso.go.kr).

growth rate, more than doubling the GNP per capita from $3,110 in 1987 to $6,498 in 1992. But this performance record was not as high as in the preceding administrations. The defenders ofRoh's democratization policy, on the other hand, argued that an overall average of 7 to 8 percent GNP growth per year during five years of the Roh Tae-Woo administration was certainly a high and respectable economic performance when measured against the world standard. The reasons why this claim of "alleged" incompatibility between the idea of democratization and economic growth was advanced are linked to the changing nature of state-society relations and the dynamics of regime change in an era of democratic transition. With democratization, the fundamental character and the role of the state in society change. State autonomy was now constrained as civil society became activated. The state's potential to intervene in market forces was greatly reduced in a democratizing country like South Korea's Sixth Republic. Another reason for the claim of alleged incompatibility between the idea of democratization and economic growth was the logic of collective action theory. Not surprisingly, Roh Tae-Woo made a campaign promise in the December 1987 presidential election that he would press on with building the welfare state during his tenure in office. Subsequently, a government program of support for the construction of 2 million housing units that eased the housing shortage for working families was fulfilled in late 1991. This measure, however well intended, caused the overheating of the construction industry and accompanying strong inflationary pressures and diverted funds away from other potential investments. The consumer price index remained consistently high during President Roh's tenure in office, as Table 3.2 shows. It grew steadily from the low annual rate of 3.8 percent in 1987 to the high rate of an 8.6 percent increase in 1990 and a 9.3 percent increase in 1991. The failure to withstand inflationary pressures was identified as one of the critical policy mistakes of the Roh Tae-Woo administration (an Achilles' heel ofRoh's Sixth Republic), according to one critical study by the Academic Organizations Consultative Association (Sahoe Pyongronsa Monthly, 1992: 551).

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Moreover, aggravated by land price speculation, the absolute shortage of housing worsened as the price of dwellings skyrocketed and apartments were pushed out of the reach of many worker families. Although the overall housing-supply ratio was enhanced, Rob's policy also raised housing expenditures as a percent of the GNP from 4.1 percent in 1987 to as much as 8.5 percent in 1991 (Korean Statistical Association, 1992: 246). In a democratizing society, the expectations of those seeking benefits from rejuvenated sectors of civil society also arose. Rob's overall economic policy exacerbated inflation, for instance, and resulted in hurting the pocketbooks of enraged workers who had been saving but could not afford to buy high-priced apartments. In South Korea, rental apartments were scarce and workers had to struggle to save and pay cash for an apartment purchase. The price of a modest apartment, by 1988, was more than $100,000. Under these circumstances, the workers were now prepared to resort to strikes, often stretching the limits of their newly gained political rights for collective bargaining (Sahoe Pyongronsa Monthly, 1992: 551). Until 1987, the labor unions, operating under a harsh working environment, were doubly handicapped as they were mostly controlled by enterprises at the local level and by the government at the national level. With the onset of democratization, harsh labor laws were targeted and labor disputes began to erupt and spread like wildfire. During August 1987 alone, for instance, there were 2,552 labor disputes, most involving strikes, compared to 276 in all of 1986 and 265 in 1985. For all of 1987, there were 3,749labor disputes, more than in all previous years combined (White Paper on Labor; 1991: 484). During the years 1987 and 1988, the South Korean government relied on a laissez-faire policy on labor disputes, allowing unions to experience collective bargaining and membership expansion. In 1986, the existing Federation of Korean Trade Unions had 940,000 dues-paying members who belonged to 2,263 local unions that were affiliated with 16 national unions. A new National Labor Union Alliance (called Chonnohyop) was organized in January 1990 and claimed a membership of700 unions to represent 200,000 workers, most of them in small- and medium-sized enterprises. The Solidarity Conference of Large Company Unions, in turn, was formed in November 1990, with member unions coming from 16large industrial firms and representing firms with at least 1,000 workers and up to over 10,000 workers (U.S. Department of Labor, 1991: 3-4). This union subsequently became the more militant Korean Confederation of Trade Unions (Koo, 2001: 197). In early 1989, the government was increasingly concerned, as union members started to push their actions to excess and violence. For instance, in late 1988 worker-management confrontation intensified as unauthorized and sit-in strikes lengthened in duration and the incidence of violence increased on both sides (U.S. Department of Labor, 1989: 7). Consequently, the Roh government started to abandon its hands-off stance and began to employ a new policy to break up unauthorized strikes.

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Strike leaders were sentenced to prison terms, invoking the existing labor-legislation clauses. Up to 1,500 teachers were fired for refusing to renounce their newly organized teachers' union, which was prohibited as a public-sector union. Some 364 workers were arrested during the first five months of 1990 alone, according to Chonnohyop, while another 134 were on the police wanted list (U.S. Department of State, 1991: 940). The resumption of this practice of jailing free unionists for violating rules was stacked against them, however, although it did serve to end open labor unrest in South Korea. There were many students who supported the labor unions by disguising themselves as workers in the 1980s. Thousands of college students quit school and joined the ranks of industrial workers by falsely presenting themselves as having only a high school education on their job applications. Their goal was to gain the confidence of fellow workers and transform them into activist workers. One Western observer with connections to the dissident community in Korea estimated that as many as 3,000 students participated in such endeavors (Ogle, 1990: 99). Many of the student workers were eventually identified and arrested on charges of falsified personal identification and forgery. Labor unrest momentarily ended by 1992, but the price was high, with an expensive union suppression and an economic slowdown, the worst seen in many years. The role of the state in the capitalist market system was clearly different between the era of the authoritarian developmental state and the democratizing state. The successful industrialization during the authoritarian era eventually led to the rise of new social classes and a new set of interest groups. New elements of civil society were occasioned by the democratization of politics. Successor regimes had to tailor their policies to suit the interests and demands advanced by the newly activated groups and classes in civil society (Koo, 2001: 153-187). In the transition process, middle-class support was the key determinant in implementing democratization (Dong, 1991: 257-282). Yet, in the postdemocratization phase, the middle class might desire greater political stability and change its position to support a conservative regime that was able to sustain law and order. The role of the state in the era of democratic transition became more diversified and its policies more multidimensional. The policy of economic growth was oftentimes made less of a priority by a regime that was more preoccupied with maintaining continuous political stability. With the progress toward democratization, middle-class voters seemed more interested in domestic policy than in foreign policy issues. In Korea in 1992, the middle class desired greater economic security and welfare above all else. This was the reason why, during the 1992 presidential election campaigns, neither foreign policy nor unification policy captured the attention of the South Korean electorate. The public was interested more in the economy and leadership and less in the foreign policy or unification policy issues. Although all three leading candidates had their own visions and strategies for what kind of Korean reunification to bring about, they were not questioned vigor-

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ously about these issues during the presidential campaign. In fact, the initial enthusiasm for North-South Korean agreements on reconciliation, nonaggression, and exchanges and cooperation, signed on December 13, 1991, and put into effect on February 19, 1992, actually died down during the campaigns. The issues of peace and reunification were effectively nonissues during the presidential election campaign of 1992. Just before launching the presidential election campaign, President Roh made a trip to China in November 1992, preceded by a trip to New York to deliver his speech at the UN General Assembly in October 1992. During the campaign, President Boris Yeltsin, the Russian president, made an official state visit. However, none of these highly visible diplomatic moves influenced the presidential election to a measurable degree. Foreign policy in the postdemocratization era was not likely to capture the center of attention or to emerge as a main focus for the country. Economic growth and social welfare continued to be more salient to middle-class voters than Roh's Nordpolitik, a subject to be fully discussed in Chapter 7. The public perceived Nordpolitik to be a policy of a past era rather than a vision of the future, despite the success that President Roh Tae-Woo attributed to it. The relationship between democracy and economic growth in a new democracy like South Korea's Sixth Republic remains at issue. In drawing a linkage between democracy and economic development, in the context of South Korea's democratic transition, Tun-jen Cheng and Lawrence Krause (1991) asked three sets of questions: One, was an authoritarian regime a prerequisite for economic development? Two, was economic development required as a preparation for democracy? Three, what were the economic consequences of democratic transition? Clearly, the first and second questions could be answered positively because South Korea's rapid industrialization of its economy was engineered by an authoritarian regime that, in turn, precipitated the prodemocracy movement. The answer to the third question was more ambiguous because the experience of the Roh Tae-Woo administration led to mixed results in terms of economic performance. The contribution of a certain type of authoritarianism, such as the bureaucratic authoritarian regime and a CDS, was clearly identifiable in terms of South Korea's forced march toward a rapid industrialization of the economy (question one) as proven by the Korean state from 1962 to 1987. The trend toward possible negative economic consequences of democratization (question three), however, was inconclusive as shown by the more volatile economic situation of the Roh Tae-Woo administration following the democratic transition in 1987. Findings from the Korean case show that the timing of democratization matters as do its effects on state-business-labor relations. The economic impact of Korea's democratic transition in 1987 was clearly unique and different from that of a more mature economy because the Korean economy was more labor-intensive in industrialization than capital-intensive or technology-intensive. Also, the Korean case shows that democratic transition resulted in the economic consequences of higher consumption, thereby inducing inflationary pres-

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sures and the demand for wage increases in excess of productivity gains. These were all immediate results of the democratic transition, but the long-term impact would depend on the type of democracy toward which the country was evolving (Cheng and Krause, 1991). A growing body of evidence also suggests that, at a minimum, authoritarian regimes do not grow faster in per capita income than democracies. "There is no trade-off between development and democracy," and a "democracy need not generate slower growth" (Diamond, 1999: 7; Prezeworski et al., 1995; Prezeworski and Limongi. 1997: 178). Thus, while democracy may generate fewer economic miracles, it is better suited to avoiding or correcting disasters, as Adam Prezeworski and Fernando Limongi observe, and also better suited to achieving steady progress in human well-being. Finally, while the relationship between democracy and inequality is also in dispute, democracies seem in the long run to respond better to the needs of the poor and the marginalized, as Diamond notes, because they enable such groups to organize and mobilize within the political process (1999: 7). Democratic transition in South Korea was about change in the political regime that would permit free and competitive elections, and the adult population enjoyed not only universal suffrage, but also franchise. The first stage of democratization was completed by the 1987 presidential election. However, democratization involved more than the procedural aspects of election. It also enabled the protection of basic human rights by the government. In fact, democratization is incomplete without consolidation. By virtue of electing a civilian president in December 1992, South Korea went beyond the first phase of democratic transition into the second phase of democratic consolidation. By completing the reform agenda adopted by the civilian democratic regime, South Korea realized the full measure of political democracy. A democratic regime provided an institutional mechanism for its citizens to enjoy the basic freedoms of speech and the press, the rights of political association, and political competition (Share and Mainwaring, 1986: 177). The democratic regime also enabled an alternation in political power through periodic general elections. By 1993, South Korea went beyond this process of democratic transition and democratization and began to address the challenges of consolidating democratic gains. Conclusion Since 1987, South Korea has undergone an epochal process of drastic political change. Its democratic experiments required several steps. First, it adopted the measures of a democratic liberalization and opening toward the end of an authoritarian regime of the Fifth Republic under President Chun Doo-Hwan. Second, South Korea advanced into a democratizing regime or transitional democracy under the popularly elected President Roh Tae-Woo in the Sixth Republic. Third, with the election of civilian President Kim Young-Sam in December 1992, South Korea's Sixth Repub-

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lie completed the process of an orderly democratic transition and entered a new era of democratic consolidation. Whereas South Korea under Roh Tae-Woo could be seen as making a new beginning of democratization, Korea under Kim Young-Sam could be seen as entering a new era of democratic consolidation politics, with greater and restored legitimacy and with a newly elected civilian democratic government (Cotton, 1993). This historical fact of democratic transition lends credibility to the modernization hypothesis that popular demands for political participation and the willingness of elites to recognize them are likely consequences of the idea of modernization (Cotton, 1989: 244; Harrison and Huntington, 2000). Modernization of South Korea over the years, with the economic miracle attained in the 1970s and 1980s, provided the context and impetus for the democratization of the country's politics and society from 1987 to 1993. This chapter examined the context, process, and problems of South Korea's political change and democratic transition from 1985 to 1993, followed by an analysis of the dilemma and challenges of democratic consolidation in terms of South Korea's ongoing reform agenda. With the election of the opposition party leader Kim Dae-Jung five years later in the December 1997 presidential election, South Korea's Sixth Republic became a full-blown democracy. At that point, one can argue, as does Diamond (1996, 1999), that the third wave of democratization in the late twentieth century was now over and the saga of Korean democratization was completed. Contemporary South Korean politics has undergone a series of breathtaking political and regime changes. The collapse of an authoritarian rule and its replacement by democracy through the democratic opening and transition was clearly one of the most dramatic political developments of South Korea in modern history. This process of political change and democratic transition, begun with the twelfth National Assembly election in February 1985, ended with the fourteenth presidential election in December 1992 and the inauguration of a civilian government on February 25, 1993. The fifteenth presidential election in December 1997 that led to an election of an opposition party candidate and the change of government party added new vitality to South Korea's democracy building. In this process of democratization of politics, the changing role of the state and state-society relations were central as determinants in the historical transformation. During the authoritarian phase of economic development, the relative autonomy of the state was high and the state readily intervened in the market. Civil society was not given autonomous status in politics since certain social groups such as organized labor were repressed and excluded from participation in politics. During the democratization period, state autonomy became constrained by newly activated social groups m civil society, such as the working- and middleclass citizens. South Korea represents the case of a country undergoing late-stage industrialization. South Korea's industrialization and entry into the world capitalist market economy was dictated by South Korea's geopolitical location and historical con-

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dition as a newly independent, yet divided nation-state after World War II. As a CDS, it switched from an import-substitution to export-led strategy of industrialization in the 1960s with the help of a strong authoritarian state (Haggard, 1990: 51-73). During this time, a state-led, rather than a market-led and -driven process of economic growth, was the engine of economic development and modernization. Now that South Korea has achieved the economic miracle of industrialization, the civil society has become strengthened and the social sectors have also become activated politically. The enlightened public is no longer passive, accepting and taking for granted the dictates of the bureaucratic authoritarian regime. As democracy emerged, a postdemocratization regime came into being. This new democracy enjoys political legitimacy with a substantial mandate for carrying out political reforms and preparing for a just society and a welfare state for future generations. The winds of political change and reform are sweeping across the region of East Asia. South Korea has joined the global march toward democracy along with its neighboring countries of Taiwan, which has been involved in reform since 1989, and Japan, which began its democratic reform in 1993. In this process of democracy building, South Korea will be affected continuously by such modernization ideals and values as economic development and a movement toward greater equity in a pluralistic and diversified social structure. At the same time, it will be involved in an external environment of greater interdependence and integration of the world economy through salutary impact in the new era of economic globalization.

4 "Reform Halfway Down?" Cultural Dimension of Democratic Consolidation

People need virtue more than fire or water. 1 have seen men die for treading on water or fire, but 1 have never seen a man die from pursuing the course of virtue. The Analects of Confucius, Book XV We live in a democratic age ... [where] "democracy" means "the rule of the people" . .. and the shift of power downward [is called] "democratization." ... The democratic wave is ... breaking down hierarchies, empowering individuals, and transforming societies well beyond their politics. 1 Fareed Zakaria, 2003 "Democratic transition" away from authoritarianism, as noted in Chapter 3, must be followed by an equally successful "democratic consolidation" if a nation's democratization and institution building are to be viable. This chapter and Chapters 5 and 6 will therefore examine some of the ongoing processes of democratic consolidation and institution building (the third and fourth tasks of democratization) to see how successfully the Sixth Republic has progressed along the path to the complete democratization of politics. This chapter will tum, in particular, to examine how democratic reform politics and agenda setting were undertaken by Korea's new democracy, following the successful democratic transition. The cultural context of reform politics in this chapter follows an earlier discussion in Chapter 2 on the role of the Confucian cultural legacy in realizing the ideals of modernization and democratization. As the new ideas of democracy were put into effect by the Kim Young-Sam administration, how were the programs of political reform and reform agenda setting influenced by cultural norms? Or, conversely, how did they cause a culture shift? As "culture matters" in shaping ideas and values in the post-Confucian society of Korea, a new set of ideas like modernization and democratization have also come to influence the government policies that, in turn, will bring about cultural changes. In the process of culture shift, traditional norms and values as well as modernization ideals will influence action by shaping a repertoire (or 102

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"tool-kit'') of "habits, skills, and styles" from which to construct "strategies of action" on reform agenda (Swidler, 1986: 273, 277). 2 This chapter will first clarify the conceptual and theoretical questions of what reform entails, in the light of the challenges of democratic consolidation. This will be followed by analyses of the efforts of the Kim Young-Sam administration (19931998) to deepen democracy building via a broad reform agenda, an effort that was arguably culturally conditioned. The study will, in particular, examine the record of President Kim's leadership in advancing the domestic political agenda of democratization during his five-year term. This will-enable us to evaluate the contribution of the Kim Young-Sam government toward democratic consolidation during this period. The spectacular rise and fall of Kim Young-Sam as a political reformer will illustrate how South Korea was still beholden to Confucian cultural norms (Hahm, 1997: 65-77). When Kim Young-Sam was elected president in December 1992, South Korea's Sixth Republic seemed to be embarking on a new era of democratic reform politics. Kim Young-Sam was the first civilian head of state to be elected to the office in thirty-two years. His election was hailed as a success story, with South Korea blazing the democracy trail in Asia. Kim's electoral victory represented the Korean people's aspiration toward liberal democracy. As a candidate, Kim campaigned on the slogans of"clean government" and "new politics." The Kim YoungSam administration was able to launch a set of far-reaching and wide-ranging reforms aimed at bringing about "reform all the way down" and transforming the Korean society overnight. The reforms launched by the Kim Young-Sam government resulted in the purge of numerous public officials, old politicians, businessmen, and military officers, touching on the core of the elite leadership of the Korean establishment. Initially, President Kim enjoyed widespread popularity and strong support among the Korean public. Yet, with the passing of time, Kim's reform lost steam and became unpopular, to the extent that his approval rating, which reached as high as 92 percent at one point, began to decline after a year and a half into his tenure. Toward the end of his five-year term, the president was stripped of all his authority, and many considered his earlier reform agenda to be an abject failure (Hahm, 1997: 66). The attempt of the Kim Young-Sam administration to bring about democratic consolidation through reform measures unfortunately ended with mixed results. "Reform halfway down" was what transpired in the end. At the outset, it is useful to clarify how reform is related to democracy. Although the ideas of democracy originated from Western culture, reform is a universal concept and has been attempted in both democratic and nondemocratic contexts. Both reform and revolution bring about change to the established political order. Unlike revolution, however, reform intends to create change, "step by step," by peaceful means. Revolution, on the other hand, entails an abrupt form of political change and transformation of the society that involves, in most cases, the use of force and violence.

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Reforming Post-Confucian Society Reforming a rapidly developing and modernizing country is a political challenge that is by no means an easy undertaking. Some countries have tried but failed, while others still wait for the verdict. The former Soviet Union under Mikhail Gorbachev, for instance, succeeded in glasnost but failed in perestroika. In postMao China, under Deng Xiaoping and his successor Jiang Zemin, a dual transition in communist systems took place that followed the path of economic reform through marketization and the evolutionary authoritarian route in politics (Pei, 1994: 19). The politics of economic reform is often compared to "riding the tiger," in which once "you're riding a tiger, it's hard to get off' (a Chinese saying cited by White, 1993: 3). Even in established democracies, like Japan, political reform is rarely successful because of the peculiar political culture and the strongly entrenched and vested interests that are opposed to political change. The challenge became even more acute in Korea's Sixth Republic as it attempted to achieve the double breakthrough of political reform (democratization) and economic reform (marketization) when the society was undergoing slowed economic growth and domestic political changes.

The Post-Confucian Society and Reform The post-Confucian society, according to Peter R. Moody, is "society that once was Confucian but is not quite so any more" (1988: 3). Confucianism, the reigning ideology of the Choson dynasty (1392-1910), as already noted in Chapter 2, left its lasting legacy on Korean society. Modern-day Korea has clearly been a postConfucian society. The imprint of Confucian culture is pervasive throughout contemporary Korean life, as is evident in politics and economics. An important question in the study of Korean politics is to ask how the ideas of modernization and democratization affect, and are impacted by, traditional cultural values and norms. A democratic society is governed by institutional rules and arrangements for enabling a peaceful and orderly transfer of power, via election and the electoral process, between the regime and the political opposition. The ruling and opposition parties in the National Assembly vied for electoral support and victory to form a representative government in South Korea. The political contest between the yo (the ruling) and the ya (opposition) was like a cutthroat competition in Korean politics. This led to the fierce competition between the ruling and opposition parties in the National Assembly from 1985 to 1987 that culminated in the democratic opening in 1987, as discussed in Chapter 3. Throughout Asia, as in South Korea, "the drama of politics is being played out by leaders and followers whose roles are largely prescribed by culturally determined concepts about the nature of [politics and] power" (Pye, 1985: vii). The cultural theory of politics, following Lucian W. Pye's lead, posits that "political

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power is extraordinarily sensitive to cultural nuances," and therefore "cultural variations are decisive" in determining a country's political life and the course of its political development. In this politically charged environment, the ideas of modernization and democratization have been adopted by the intellectual elites and put into effect by the successive governments. This followed the successful political transition, away from authoritarianism toward liberal democracy in the late twentieth century. The ideas of modernization have worked to alleviate poverty and enhance prosperity for the Korean people. These ideas were adopted by the government and put into effect as economic development policies and programs. However, whether the ideas of democratization can usher in an era of democratic peace and happiness for the Korean people remains to be seen. These ideas were put into effect as the reform agenda by the democratic government, but the causal path between ideas and democracy is more complex. The reform agenda must filter through cultural values and context, as the subsequent analyses will show. In the post-Confucian society of East Asia, where modernization has not quite taken hold, there is a tendency for authoritarian politics to strengthen the political state and to weaken nascent civil society. Under such circumstances, it is difficult to aggregate social interests. A civil society in the post-Confucian context means that "practical infra-structure and countervailing institutions [that are] able to check the monopolization and abuse of state power did not arise" (deBary, 1998: 16). The post-Confucian society will exhibit the rise of the clearly demarcated political forces of the regime and the opposition. Neither regime nor opposition in postConfucian society will have a fixed social base in which to operate; the regime will be compensated for this lack by its coercive power, while the opposition tends to remain divided and weak (Moody, 1988: 10). Under these circumstances, which prevailed in the authoritarian politics of Taiwan and South Korea prior to the democratic opening, "there was little to push political development in a democratic direction" because, as Moody notes, "lip service to democracy was virtually universal in these societies both among regime and opposition" (10). Korean political culture is a variation of East Asian Confucian ideology and value systems that, according to Pye (1985), are characterized by "a bold, risktaking style" and "by extremes" of political action. In this view, "the Koreans have a strong attachment to disciplined and formal manners, to deference, and to a stiff and aloof style of authority; yet Korean culture also tolerates brashness and cockiness toward authority, boldness of action by leaders, and self-assertiveness by practically everyone .... The gentleness of the Confucian scholar-superior can at any moment give way to brusque and often cruel assertions of authority" (58). Contrary to the popular notion, Confucianism and reform are not incompatible. Confucius was a reformer in his time, and many reforms were likewise attempted in traditional Confucian China and Korea. In the late nineteenth century, imperial China suffered from an ill-fated reform movement of 1898 that was led by Tan Sitong, Liang Qichao, and Kang Youwei. In fact, Kang wrote a treatise called

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Confucius as Reformer, placing Confucius as a progressive reformer in his time rather than a status-minded ideologue (deBary et al., 1960: 730--735; Eckert eta!., 1990: 222-230). Confucianism and Western-style democracy may not necessarily be incompatible. In fact, according to Francis Fukuyama, "there are fewer points of incompatibility between Confucianism and democracy than many people in both Asia and the West believe" (1995c: 21). The post-World War II "modernization theory" has proved correct because economic development tends to be followed by political liberalization whether in the West or in East Asia (21). The future of democracy in Asia will depend, therefore, "less on the theoretical compatibility or incompatibility of Confucianism with democratic principles" than on "whether people in Asia feel that they want their society to resemble that of the United States" or any other democracies in the West (32). In the meantime, Korea's Sixth Republic created its own approach to and style of democratic consolidation. The Sixth Republic under Roh Tae-Woo accomplished the feat of reform and transformation via state reform, as Robert E. Bedeski (1994) argues. That is, reform led by the state from above. The challenge of democratic reform in postConfucian Korea, however, has been to turn the direction of this reform around and become a reform led not only by the state from above, but also by the civil society from below. This will make the reform movement genuinely popular and democratic, in that both the state from above and the citizen movement from below can go hand in hand to transform the society toward modernization and democratization. Democratic reform in the post-Confucian society of Korea is, in short, perfectly feasible. Once democratic transition is complete, the democratic regime is expected to pursue an agenda of reform politics. Political reform is a slow and deliberate, yet no less significant, process of political change that is peaceful and evolutionary. Political reform, if it amounts to anything, should do more than improve the administrative procedure designed to terminate corruption or make the existing system more efficient. (This is how the phrase "political reform" is frequently employed in urban politics in the United States.) Political reform, to be meaningful, should constitute more than limited changes in government institutions. In the context of putting the ideas of democratization into effect, reform must represent full integration of what it stands for into all aspects of society. To accomplish this requires a culture shift away from traditional culture norms toward greater civic culture and democratic orientation. The Challenges of Democratic Consolidation via Reform

Once the democratic transition was complete, South Korea's Sixth Republic was ready to move to the next logical stage of democratic consolidation. Both democratic transition and democratic consolidation can be conceived of as a continuum and yet these processes are distinctive and may also overlap. When the

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initial stage of democratic transition is instituted and promoted, the subsequent step of democratic consolidation must also begin as a result of the initiation of reform measures (Diamond, 1999; Karl and Schmitter, 1991; O'Donnell, Schmitter, and Whitehead, 1986). The process of democratic consolidation, as J. Samuel Valenzuela notes, typically "consists of eliminating the institutions, procedures, and expectations that are incompatible with the minimal workings of a democratic regime" (1992: 70). An elimination of the old practices of an authoritarian era, through instituting reforms, will enable the newly elected democratic government to begin democracy building. The tasks of democratic consolidation following successful transition, according to Larry Diamond, are democratic deepening, political institutionalization, and regime performance (1999: 74). If any of these tasks fails to materialize, the third wave of democratization that Korea's Sixth Republic inaugurated would encounter the danger of reversal in democracy. Can South Korea's Sixth Republic ultimately be regarded as an agent of great reform? "Great" reforms, according to Michel Oksenberg and Bruce Dickson, should "involve more than improving the administration of the state" and should "fundamentally transform the political system" (1991: 238). This transformation should affect, at least, four aspects of a political system: the relationship between the state and society, the relationship between the state and the economy, the distribution of power and authority among and within the constituent institutions of the state, and the relationship between the country's political and economic systems and the external world. To be designated as great or successful, the political reform initiated by the Kim Young-Sam administration had to alter the basis of legitimacy of the political system, redistribute power and authority in the constituent elements of the state, significantly alter the tasks of governance, and change the country's foreign relations. These requirements may offer a standard against which any reform efforts could be measured. Future historians will come to reexamine Kim Young-Sam's democratic reform in the light of the subsequent historical trajectory and "path dependency" of Korea's earlier historical episodes. The Kabo reform movement, for instance, lasted for more than sixteen months, from July 1884 to February 1886. During this period of King Kojong 's reign, the Deliberative Council adopted a total of 210 reform bills and was responsible for 660 reform documents (Eckert eta!., 1990: 222-230). History shows that the "great" political reform of 1884 did not succeed, however, because of the conservative political reaction and strong power rivalry and imperialism surrounding the Korean Peninsula. Whether the Kim Young-Sam government could bring about such political reform and the transformation of South Korea's post-Confucian society, of course, was more than a matter of speculation and anticipation. Leaving the question of evaluating Kim Young-Sam's reform politics to future historians, we can begin to assess Kim's vision as a reformer at the outset of his administration in 1993-1994. 3

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Kim's Vision of"Reform" Politics and Democratic Consolidation After the successful democratic transition, the government of President Kim Young-Sam confronted a set of political challenges associated with democratic consolidation. The ideas of democratization and of undertaking political reform became identified as the same task in Kim's mind and the minds of many of his followers. Once the process of democratization was completed via the successful regime transition from authoritarianism toward democracy, the immediate task of the posttransition government was to consolidate its political gains, as far as Kim was concerned. This was done by carrying out the public pledges to "clean up the mess" of nondemocratic practices and excesses committed by the preceding state and regimes. In this process, the notion of fighting against corruption and eliminating political irregularities inevitably emerged to become the main reform agenda. President Kim Young-Sam faced enormous challenges as he attempted to implement democratic consolidation. As a newly elected president, Kim Young-Sam wanted to carry out the new mandate of "democratic reform." In so doing, Kim relied on a rather "exceptional model of democratic consolidation" that, according to one observer, utilized "the communitarian and substantive notion of democratic politics," rather than the more familiar model of the "libertarian" and liberal notion of democratic politics that gives emphasis to a minimum definition of democracy (Shin, 1999: 199-203). 4 The "positive" aspect of Kim's reform agenda comes from this "communitarian" notion of putting the community ahead of its individual members. For Kim Young-Sam, democratic consolidation required the "building of a truly moral community by removing every authoritarian enclave" of the past under the name of a new Korea. His vision of the new Korea was to create a freer and more mature democratic society in which "freedom must serve society." Kim's vision of the new Korea was also "a sharing community, working and living together in harmony," in which "justice will flow like a river" and "a higher quality of life will flourish and the dignity of the individual will be upheld." It was also an honorable society that would no longer "give currency to the immoral notion that the end justifies the means" (Y. S. Kim, 1993). In building "a democratic community" of new Korea, Kim Young-Sam emphasized the importance of not only "changing unethical habits and corrupt practices among citizens and officials," but also "building democratic institutions and procedures" usually included in a minimal definition of consolidated democracy. Four specific sets of changes would require that the public, as Kim Young-Sam put it, "stop considering narrow self-interests and demanding one's own share too greedily," "give greater consideration to the larger common good," "root out misconduct and corruption and restore national discipline," and "cultivate wholesome character and unwavering democratic belief' (as cited in Shin, 1999: 201). The more "negative" dimensions of Kim Young-Sam's reform agenda, accord-

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ing to the same observer, come from his emphasis on the importance of purifying the authoritarian past and purging authoritarian elements from the democratic political process. The Kim Young-Sam model of "negative" democratic consolidation, in the end, has had mixed results: while successful in doing away with "the power base of the old authoritarian governments and delegitimating authoritarian rule itself," this was not essential nor effective in consolidating democratic institutions and legitimating democratic values. While Kim's model forestalled the kind of overwhelming wrong-doing common among his predecessors, it failed "to uproot the endemic political corruption and irregularities" in Korean business and politics, as "political corruption still remains as Korean as Kimchi" (Shin, 1999: 218-219; Kristof, 1997). Before passing a final verdict on Kim Young-Sam's success or failure as a democratic reformer, a more thorough and systemic analysis and evaluation is needed regarding his overall efforts to confront directly the chronic ills of Korean society as Kim saw them and his ways of rectifying the sins of the authoritarian past. Successive Waves of Democratic Reform: Positive or Negative Consolidation? The primary means of consolidating democratic gain for Kim Young-Sam was to carry out the agenda of "positive" reform. To do so, Kim first laid out the blueprint of an ideal society, which he developed during the election campaign and articulated in his inaugural address. In launching a series of successive waves of democratic reform in 1993, the Kim Young-Sam administration was enjoined by the ruling Democratic Liberal Party (DLP) in parliament. During the preceding general election held on March 24, 1992, to elect members of the fourteenth National Assembly, Kim Young-Sam's DLP captured 149 seats in the 299-member parliament, one seat short of a simple majority. But with the help of some of the twenty-one members of parliament elected as Independents, Kim's DLP in the National Assembly was in a secure position to continue its status as a viable governing party. Later, Kim Young-Sam carried out his reform program in several "tsunamilike" waves and stages. In the first stage, he launched a daring blitzkrieg anticorruption campaign. The second stage, although it took the country by surprise, was more deliberate in planning and the speed of implementation. The third stage, which was intended to provide the guidelines for the second half of his five-year term, was performance oriented but problematic in its attainment due to the rushed nature of its policy design as well as rapid shifts and changes in political and economic fortunes both at home and abroad. In carrying out his reform program during the first wave stage, Kim YoungSam presented himself as a "populist" democratic politician, true to his political image as the leading dissident and staunch fighter for the cause of democracy

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during the authoritarian era. Kim was bold and decisive in launching a broadgauged campaign for eliminating corruption and irregularities in and out of the government at the top echelons. The new president seemed not to be afraid of political retaliation or challenges to his authority, because he was armed with the newly acquired mandate and legitimacy for rule as democratic leader. A talented calligrapher, he was fond of writing a four-character scroll in Chinese (which he gave out to some as a personal gift) entitled Daedo Mumun (Broad Road [requires] No Gate). The highway of democracy that one travels, it seemed to Kim, would require no entrance gate or barrier, and all would be welcome, so long as they were on the side of justice and righteousness. Also, there is a saying in Korea, as in other cultures, that what counts in the end is "not word or promise but action and performance." Many felt that the slogan of Yongdu Sami (Dragon Head and Serpent Tail), as known to many Koreans, was appropriate as the symbol for how Kim's tenure had ended, with the mismanagement of the economy on the eve of the 1997-1998 Asian financial crisis. Before rushing to judgment, however, we need to first examine specific details of the reform agenda proposed by the Kim administration. The living tradition of Confucian cultural mores worked in Korean society to influence the political process during authoritarianism prior to 1993. Although this tradition also made a difference in an age of democratic transition and reform politics after 1993, the primary goal of reform, as a moral crusade undertaken by Kim Young-Sam, was to change the attitude and behavior of the people by adhering to the idea of democratization and the newly acquired democratic values. If successful, this would bring about democratic cultural change. During the presidential campaigns of 1992, Kim Young-Sam campaigned against what he termed "the Korean disease," by which he meant a widespread practice of structural corruption and irregularities, both in and out of the government. In so doing, Kim injected a new moral tone into the election. While condemning the old practice of corruption and irregularities, he promised to resuscitate the "dying and sick" society in order to become a truly democratic Korea. In his inaugural address of February 25, 1993, entitled "Let's Join Forces for New Korea with Hope and Vision," Kim Young-Sam proclaimed the birth of "a new Korea [that] will be a freer and more mature democracy" (1993: 1). This new Korea, according to Kim, "will be a sharing community, working and living together in harmony" by undertaking reforms in "three essential tasks: first, misconduct and corruption must be rooted out; second, the economy must be revitalized; and third, national discipline must be enhanced" (1993: 3). The objective of President Kim's reform policy seems to conform to the Confucian intellectual tradition of founding a moral political and economic order. In rooting out corruption and misconduct, Kim proclaimed his "immediate reform will start at the very top." As for restoring economic vitality, his government "will do away with unwarranted controls and protection and instead guarantee self-regulation and fair competition." Finally, he added a moral tone to his appeal

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for restoring national discipline. Saying that Koreans "have grown lax," Kim argued that "when power is grabbed by foul means, governmental legitimacy is lost and law and order is bound to break down. This gives currency to the immoral notion that the end justifies the means. [Therefore,] there must be an end to the dark political night" (Kim Young-Sam 1993, 3). Kim Young-Sam relied on the strategy of launching a successive series of reform agendas, one after another, during his five-year term in office. Some of the reform agendas were already enunciated at the beginning of his administration while others were kept secret until they were put into effect on short notice. Kim worked toward achieving the overall objective of democratic consolidation via reform in five specific waves of campaigns: building a new Korea and waging anticorruption campaigns (first wave), institutionalizing democratic political reform measures (second wave), enhancing political legitimacy by rectifying the authoritarian past (third wave), establishing economic reforms, including the realname accounting system (fourth wave), and securing the future through a local autonomy and globalization agenda. Each of these formidable tasks and agendas required careful planning and implementation.

The First Reform Wave: Eliminating Corruption and Irregularities by Setting an Example Following his inauguration, Kim Young-Sam moved rather quickly to carry out his campaign promises for democratic reform. One of his first acts as president was to make a public disclosure of his personal and family assets. He also made a public pledge that he would not seek political contributions, implying that he was determined to do away with the questionable practices involving money and political collusion practiced in electoral campaigns. These are an example of a leader carrying out reform by one's own initiative and exemplary acts. These were combined with an announcement of the release of several political prisoners, including the Reverend Mun Ik-hwan, and a large-scale amnesty affecting more than 41,000 persons held in prison (Korea Newsreview, March 13, 1993: 4-5). Before his inauguration, Kim announced his choice of both prime minister and director of the board of audit and inspection prior to releasing the names of his new cabinet. An Anti-Corruption Measures Committee was newly established under the direction of this board so as to conduct an inquiry and investigation of those government officials implicated in questionable and illegal activities. 5 The institution of "censorate" in old Korea was revived, as it were, and utilized as a means of carrying out Kim Young-Sam's reform agenda. In May 1993, the National Assembly acted to give an important legal basis for the anticorruption and reform drive pursued by President Kim. The National Assembly enacted the Public Servants' Ethics Law, a bill on public disclosure of assets by lawmakers and ranking government officials. Under the new law, lawmakers and

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an estimated 7,000 government officials from the first grade up, including bureau chiefs, three-star generals, and higher-ups in the service branch, were required to disclose their own and their immediate family members' assets each year in office (Korea Newsreview, May 29, 1993: 6). One of Kim Young-Sam's favorite and oft-quoted sayings that he used to cultivate an image of being "a clean politician" was that "unless the upstream is clean, the downstream will not be clean." Again, President Kim was anxious to set a high moral and ethical standard at the top of his administration. When some of his newly appointed cabinet members proved to be controversial, due to the appearance of amassing fortunes while in public service before joining the cabinet, Kim acted decisively to remove them, although he should have been more deliberate and careful in choosing his associates in the first place. These replaced cabinet members included the ministers of law, construction, and public health, as well as the newly appointed mayor of Seoul. A total of twenty-nine cabinet-rank high officials in his administration followed the lead of President Kim by making public disclosure of their assets. This act was followed, two weeks later, in a similar move by 125 high government officials of vice ministerial ranks (Korea News review, March 27, 1993: 4-6). The Kim government directed its inquiry into some of the most powerful and influential officials of the previous administration. Former president Roh Tae-Woo's national security advisor, Kim Chong-hwi, was indicted on a charge of possible bribery in connection with an F-16 fighter plane decision, whereby the Roh TaeWoo administration purchased a fleet of U.S. fighter planes as part of the defense modernization program. Roh's former defense minister, Lee Chong-ku, and others were implicated in the financial scandal. Roh's former chief economic advisor, Kim Chong-in, then serving as a member of parliament (MP), was also indicted on a bribery charge, convicted, deprived of his parliamentary seat, and sentenced to a prison term. Park Chul-un, Roh's former cabinet member and close confidant, who was also serving as an MP, was arrested and tried in open court on bribery charges on a slot machine licensing decision (Korea Newsreview, May 22, 1993: 6). He was convicted and sentenced to serve a prison term. His wife successfully ran in a by-election to fill the seat that he vacated. Under the newly enacted law, over 1,100 ranking government officials and lawmakers were required, by September 7, 1993, to make their assets public. Since discrepancies developed between initial disclosures and subsequent disclosures of assets, many of those officials who engaged in the questionable practice of amassing private fortunes had either to tender their resignation or be subjected to an inquiry and further fact finding. Not surprisingly, the ruling DLP took punitive measures against eight of its lawmakers who were known to have problems with the way they had amassed their wealth. Five others were given "warnings" by the party, and two members were forced to resign (Korea Newsreview, September 25, 1993: 6). Reform was also applied to the judicial branch and the police administration. Kim Dok-ju, the chief justice of the Supreme Court, was forced to tender his res-

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ignation early in September, after revealing that his wealth had been acquired through land speculations before he joined the court in the late 1980s. This was followed by the resignation of Attorney-General Park Chong-chol, the chief law enforcement officer, and many other high-ranking judges and police chiefs throughout the country. Park reported assets totaling $2.4 million, making him the fifth richest of about fifty senior prosecution officials required to register their wealth under a new ethics law (Wall Street Journal, September 14, 1993). This led to a wholesale replacement of personnel in the judicial branch of the government (Korea Newsreview, May 22, 1993: 7; September 25, 1993: 7). This house cleaning of law enforcement agencies was a necessary step before launching into the anticorruption investigation of other higher officials who had benefited from the ethically questionable and illegal practice of bribery and kickbacks through "influence peddling" pervasive in the previous authoritarian regimes. A total of 234 government officials were confirmed to have "problems" with regard to the way they had amassed private fortunes. Suspected of reporting their financial statements in a dishonest manner and of engaging in illegal real estate speculation or tax evasion, some 94 of these officials were urged to leave public office, while 140 of them received a warning, with their future promotion adversely affected (Korea Newsreview, December 18, 1993: 12). This action was taken after auditing a total of 15,032 officials of the central government and government-affiliated organizations with higher civil servants with grades ranking between two and four who were required to register their assets in accordance with the Public Officials' Ethics Law (Korea Newsreview, December 18, 1993). The other branches of the government were pressured to follow suit by adopting a new policy of asset disclosures. The ruling DLP started first and was followed by the opposition parties in parliament. As the ruling party members were pressured to follow President Kim's lead, Park Joon-kyu, the speaker of the National Assembly, announced that he would step down from the speakership. As an influential member of the ruling DLP executive committee, Park decided three months later that he would simply resign from his seat in the assembly. Park, a veteran lawmaker, was clearly implicated as one of those old "corrupt" politicians who had amassed a fortune while serving in the legislature. Two additional ruling party lawmakers, Yu Hak-song and Kim Mun-ki, were also deprived of their seats after refusing to disclose their assets (Korea Newsreview, April3, 1993: 6-7). Purifying the Military

The military's legacy of intervention was the most difficult challenge confronting the new president. Less than two weeks after his inauguration, President Kim removed Army Chief of Staff General Kim Jin-yung and Intelligence Commanding General So Wan-su. This was followed, on April 2, by the replacement of the field generals directly responsible for the protection of the government itself, that is, the Special Forces and Capital Defense commanders. Next, other

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powerful generals were relieved from duty, including Joint Chiefs of Staff General Lee Pil-sup, and three high-ranking generals who were placed on reserve. All of these generals were implicated in the December 12, 1979, coup, which was engineered by then-major general Chun Doo-Hwan to found the Fifth Republic (1980-1988). Three former Republic of Korea (ROK) navy admirals, including a former chief of operations, were arrested for bribery charges associated with promotion decisions while in office. This was followed by the arrest of five ROK air force officers implicated on similar bribery charges. Chang Se-dong, a former Central Intelligence Agency chief, was arrested in connection with a bribery charge scandal. The civilian director of the Military Affairs Bureau, in charge of administering the military draft, was also arrested on a bribery charge (Korea Newsreview, May 1, 1993: 8-9; May 8, 1993: 10). Other high-ranking officers were investigated on charges of accepting bribes for defense contracts. For a civilian president to remove high-ranking generals from active duty was a bold act and full of risk, but Kim Young-Sam prevailed because of his newly acquired legitimacy as an elected president. As a result, the civilian control of the military, as stipulated in the constitution, became the democratic norm in theory and practice. President Kim was determined to purge the "political" generals and to restore professionalism in the military service. In an attempt to do away with the political activities of the military once and for all, he wanted to expose secret societies operations within the army. Hence, the government had the press release the names of 105 members on the list of the Hanahoe Club who were widely regarded as being close to former presidents Chun Doo-Hwan and Roh Tae-Woo, and many former generals of the ROK army. The Hanahoe was a secret association within the army consisting of select graduates of the Korean Military Academy. Both former presidents Chun Doo-Hwan and Roh Tae-Woo were charter members of this organization. As a result of this move against the Hanahoe, the civilian control of the military was formally restored as the ROK constitution stipulates. By purging most of the generals associated with past authoritarian regimes, Kim sent out a clear message that he wanted to restore professionalism in the military service. Civil-military relations were redefined to reflect the democratic orientation of the state. In the end, Kim Young-Sam was able to replace all the posts held by the four-star generals, as well as three-quarters (73.3 percent) of three-star generals and two-thirds (68.3 percent) of two-star generals who had been appointed by his predecessor (Korea Newsreview, February 26, 1994). The Second Reform Wave: Further Securing and Enhancing Political Legitimacy

The second wave of reform measures unleashed by the Kim Young-Sam government had to do with further securing and enhancing the political legitimacy of his administration. President Kim's claim oflegitimacy was derived from the nation-

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alist ideology that he hoped to restore and cultivate. Under such plans, the remains of five nationalist leaders of the provisional Korean government, exiled to Shanghai during Korea's occupation by Japan prior to 1945, were returned home for reburial in August 1993. It was during the meeting of President Kim with Qian Qichen, the visiting Chinese foreign minister, in Seoul in late May 1993 that such a request was made (Korea News review, August 14, 1993: 4-5). This act coincided with the belief that the ROK was the successor to the provisional Korean government in exile during Japan's colonial rule of Korea. Such was, at least, the political calculus behind Kim's decision. Another important symbolic act of President Kim was to order the dismantling of the main building used by the Japanese colonial government, subsequently used as the National Museum. This towering granite structure overlooking downtown Seoul was built by the Japanese colonial government on the Kyongbok Palace grounds. The building was also known to have the symbol of the rising sun reflected in its structural design and layout. Even if the demolition of this structure was costly, President Kim was determined to do away with the remnants of Japanese colonialism and to restore the royal sanctuary of the Choson dynasty to its original grandeur. This was clearly a reflection of nationalism pointing to the administration's determination to recover the self-respect and independent spirit of the Korean people. He also instructed the cabinet to build a new national museum that would represent 5,000 years of Korean history in preparation for the unification of the Korean Peninsula at a future date (Korea News review, August 14, 1993: 4-6). Whereas Kim 11-Sung of North Korea had exploited nationalism and an anti-Japanese guerrilla war struggle to his advantage, Kim Young-Sam seemed equally determined to exploit the theme of nationalism by liquidating the remnants and legacies of Japanese colonialism from Korean soil. The Independence Day ceremony in 1994, marking the forty-ninth anniversary of Korea's liberation from Japan on August 15, 1945, was held at Independence Hall, forty miles south of Seoul. Kim delivered an address that clearly reflected patriotic and nationalistic themes. Many observers wondered how his government would confront North Korea's proposal to invite seventy South Koreans to attend the dedication ceremony of the Tan'gun tomb, which they claimed was recently uncovered. Tan' gun was a legendary founder of the Korean nation some 2,700 years before Christ. Passing of Political Reform Bills

Kim Young-Sam's campaign promise to reform the existing laws on election, political party, and campaign financing was finally realized, after months of parliamentary debates, in the National Assembly special session in early March 1994. Speaking before the National Assembly in September 1993, Kim Young-Sam called for "an electoral revolution ... to eliminate any room for improper and corrupt

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campaigning and voting." He also called on political parties to sever collusive links with businesses and raise political funds in a legitimate manner (Korea Newsreview, September 25, 1993: 5). The passage of these political reform bills was one of Kim's most solid accomplishments as he attempted to usher in a new era of clean politics by making political funds more public. Some argued that the 1994 political reform bills were similar to the 1830 Reform Bill in England that did away with "rotten boroughs" to make the electoral districts more commensurate with the constituency. Whether the 1994 electoral revolution deserved such an honor, however, would remain to be seen in the local autonomy elections of 1995. Starting in 1995, South Korea went through major elections every year to make reform bills timely and appropriate. In June 1995, local government elections were set up first, to be followed by the fifteenth National Assembly election in 1996 and the presidential election in 1997. The political reform bills of 1994 consisted of three separate laws on election, political funds, and local autonomy (Korea Newsreview, March 12, 1994: 4). Under the existing election laws, a presidential candidate was allowed to spend up to 36 billion won (about $35 million), while a parliamentary candidate could spend 125 million won (about $160,000). It was openly known, however, that most candidates actually spent far more than the set amount. The new election law limited a presidential candidate's spending to 20 billion won for a campaign and a parliamentary candidate's spending to about 50 million won. If a winning candidate exceeded the limit, according to the new law, the election would be declared null and void. The new election law stipulated other safeguard measures to make elections more open and fair. The election of a candidate, for instance, would be ruled invalid if his or her campaign workers or family members violated election laws. Candidates whose elections were ruled invalid would be banned from serving in public posts or running for subsequent elections for ten years. The new law also required all candidates to use only the money withdrawn from their bank accounts for campaigns to help authorities monitor spending. To defray expenses, candidates would receive a government subsidy for publishing their individual small campaign publications and pamphlets. The new law also prohibited rallies sponsored by political parties during election campaigns. The parliamentary seats elected from the national constituency, in turn, would be distributed to parties in accordance with the number of votes, instead of the number of seats, they gained in a direct vote. The political fund law was revised so that subsidies from the state coffers to political parties could also be increased, from 600 won per eligible voter a year to 800 won. The amount of an individual contribution was likewise increased to 150 million won (about $190,000) to political parties from the current limit of 100 million won. Finally, the new Local Autonomy System Law was expected to usher in a new era of local self-government. This law laid the legal basis for the government plan of reorganizing local administrative units. The new law empowered local governments to initiate important measures, such as effecting mergers of cities and their

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surrounding counties. All four local elections, including the county, city, special city, and provincial levels, were held simultaneously on June 27, 1995, so as to reduce the cost of elections. By electing local administrative heads at various levels, instead of the existing system of appointment by the central government, the Korean government would be held more accountable to the voters at the grassroots level. Koreans would come to learn democracy firsthand by participation in local self-government.

The Third Reform Wave: Rectifying the Authoritarian Past The third wave of democratic reform undertaken by the administration was the more delicate and challenging one of severing ties with the authoritarian past. The primary means of attaining this goal was to rewrite past history by correcting "alleged" mistakes and injecting a newer perspective on major historical events. Kim suggested, for instance, that the December 12, 1979, incident, led by then-major general Chun Doo-Hwan, was a "military coup d'etat-like incident," and the May 18, 1980, Kwangju riot incident was "the civil pro-democracy uprising in Kwangju." He also redesignated the April 19, 1960, student uprising as "the April 19 Revolution" and the June 10, 1987, "Great March" that he took part in as an opposition leader as "the June 10, 1987, Struggle for Democracy" (Oh, 1999: 135). President Kim instructed that the honor of those who had been prosecuted by the military regime of the Fifth Republic be fully restored. Using the president's constitutional authority to "grant amnesty; commutation and restoration of rights" (article 78), his government released 5,566 political prisoners and destroyed the conviction records of more than 500,000 political prisoners from the previous military regimes. Also, his government removed 239 fugitives from wanted lists of the former regimes, and 102 fugitives who had turned themselves in were forgiven. Under his directives, schoolteachers who had lost their jobs for trying to form labor unions were restored to their previous positions, and 2,046 students who had been expelled for their political activities from 85 colleges and universities were ordered readmitted. Finally, the honor of the Kwangju victims and of others who had been prosecuted by the Chun regime was fully restored (Oh, 1999: 135-38). In 1995, President Kim Young-Sam was faced with a difficult decision to make regarding the political status of his two former presidents. Should the past authoritarian practices for which these predecessors were held responsible be condemned and rejected outright? Should the past authoritarian leaders who initiated liberalization and democratization measures be acknowledged or be subjected to immediate arrest and trial? Should they be given leniency or forgiveness for their past errors and, if so, on what grounds? These were some of the difficult questions facing the postdemocratization regime of President Kim. In the end, Kim decided to let the court system and procedure decide; thereby, the "rule of law" process was established and institutionalized for the sake of the new democracy's future. This strategy chosen by Kim Young-Sam permitted placing the two former presi-

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dents on public trial on bribery and sedition charges. This proved to be the most celebrated and memorable of his reform policies for rectifying the authoritarian past. This risky and daring move, as well as the publicity generated by the trial of former presidents, which was dubbed Korea's "trial of the century" by the media, will be set aside as a separate topic for analysis. This section will only address the political context and implications of Kim's campaign for political reform. During democratic consolidation, regimes give more attention and priority to righting the balance and rectifying the ills of authoritarian rule (Cheng and Krause, 1991: 6). This type of consolidation problem, stemming from the regime change to democracy, asks how to deal with the mistakes of the past. This question, as already noted and expounded further, asks where to draw the line in expunging the past errors, by punishing the authoritarian leaders who had committed errors but who also initiated liberalization and democratization, either formally or informally, through leniency. If they were forgiven, what would be the grounds? Three kinds of problems awaited South Korea's third wave of democratization once it had successfully undergone the process of democratic transition. These problems, as Samuel P. Huntington (1991: 211) argues, are the torturer problem of whether to "prosecute and punish" or to "forgive and forget" the past crimes of dictators; the praetorian problem of how to tame the military, by curbing its excesses and fostering professionalism; and the contextual problems that are unique to the situation of time and place that stimulate and herald the transition to democratic consolidation. Democratic consolidation necessitated that Kim Young-Sam's administration give priority to righting the balance and rectifying the ills of the years of authoritarian rule (Cheng and Krause, 1991: 6). The complexity of consolidation of democracy initially led to questions about how to respond to the mistakes of the past. On April 13, President Kim made an important political statement regarding military intervention. His position was basically to avoid extremes and maintain a semblance of balance. While characterizing the December 12, 1979, episode as a "coup-like military revolt," Kim made it clear what he intended to do to restore justice with regard to the bloody suppression of the K wangju riots by the military regime of President Chun Doo-Hwan. He called for "restoring the honor of those participating in the May 1980 Kwangju democratization movement" (Korea Newsreview, June 5, 1993: 10). During this period, former presidents Chun and Roh were fearful of the personal consequences of political reform and of President Kim's redefining the coup of December 12, 1979, and the Kwangju suppression of May 1980. They had a sense of temporary relief when the Kim government decided to end the investigation of the authoritarian past. Hwang In-sung, Kim's prime minister, rejected the opposition call in parliament for open public hearings and a probe into alleged corruption and irregularities ofRoh Tae-Woo while in office (Korea Newsreview, May 15, 1993: 6).

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The Fourth Reform Wave: Putting the Economic House in Order The fourth wave of the reform program of the Kim Young-Sam administration dealt with the more practical, important aspects of the economy: the ways in which to sustain and improve the standard of living for all members of the society. In this effort, the ancient Confucian teaching and notion of Kyungse Jemin ("manage the world and rule the people") seemed to come into play for Kim Young-Sam. In March 1993, Kim announced a 100-da~ economic stimulus package, coupled with a promise to initiate a new five-year reform and development plan for a new economy (1993-1997). The latter plan, unveiled in July, called for an average annual economic growth rate of 6.9 percent, with a major emphasis on administrative reform, financial and market liberalization, technology upgrading, and enhancing of South Korea's international competitiveness. The actual gross national product (GNP) growth rate in 1993 was 5.8 percent, only slightly better than the 5.1 percent growth rate in 1992. During the presidential campaign, the candidate Kim Young-Sam pledged to revitalize an economy that, in 1992, had recorded the slowest growth in twelve years. This goal of enhancing the economic growth rate was important for the new democracy in the short run, perhaps more so than carrying out the difficult economic reform agenda. However, the economic package faced difficulties from the very beginning. In his attempt to stimulate economic growth, Kim relieved the Bank of Korea president, a fiscal conservative, over a disagreement concerning monetary and credit policy. Some critics charged that Kim's move was politically motivated and potentially harmful to the economy in the long run. They considered difficulty with the economy to be a structural problem as much as a result of the economic mismanagement of his predecessors. Therefore, the expected benefit of economic reform and change were unlikely without drastic changes in domestic policy. Kim moved to introduce three specific measures of economic reform: chaebol specialization, real-name accounting, and financial market liberalization. Chaebol Specialization Reform

The chaebol (business conglomerates) specialization reform was included in the new Five-Year Economic Plan of July 1, 1993, which had three interrelated goals: to reduce the chaebol's predominance in the Korean economy, to promote the small- and medium-sized enterprises marginalized by the chaebol, and to improve the international competitiveness of each chaebol by encouraging it to specialize in a few core business activities. The Kim administration required the top thirty conglomerates to submit, by January 1994, a list of core industries on which they would choose to focus. This policy of reforming the industrial structure of the economy, however, was not carried out because of the economic uncertainty prevailing at the time and the government desire to push the country rapidly out of the economic slowdown.

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Since the chaebol constituted the main engines of the Korean economy, the Kim administration wanted to improve its relations with the chaebol rather than enforcing the newly announced chaebol reform policy. During Kim Young-Sam's tenure in office, the chaebol continued to expand their business lines. The average number of subsidiaries of a chaebol increased from 18.3 in 1992 to 19.1 in 1994, and the number of chaebol subsidiaries grew 10 percent between 1993 and 1996 (Far Eastern Economic Review, Asia 1995 Yearbook, 1995: 155; C. K. Lee, 1996: 57). Another obstacle to economic prosperity for the new democracy was the loss of international competitiveness associated with higher labor costs and wage increases. This erosion of competitiveness was the result of traditional protectionist trade policies and practices, rather than from liberalization and the opening of the Korean economy. Economic growth was also at a low. Although it was difficult to establish cause and effect relations between regime types and economic growth, democratic changes in South Korea had resulted in higher consumption, wage increases in excess of productivity gains, and inflationary pressures (Cheng and Krause, 1991: 3). Kim Young-Sam's approach to economic reform relied more on the moral persuasion of labor-management talks on wage disputes than on forcing government intervention in the labor talks. In a gesture intended to woo the business community over to his economic reform package, President Kim attempted to tame the chaebol. Kim invited thirty business tycoons to individual dinners or lunches at the presidential palace. He called on business leaders to expand their investment programs and to strive for peaceful labor-management relations. His intention clearly was to revive businesses' confidence in the Kim administration's economic policy. Kim also promised to do away with what he called "unnecessary" government regulations. In 1993, Korea's protected rice market was subject to a forced opening as a result of the Uruguay Round negotiation talks in Geneva. The Korean farmers' protest reached crisis proportions. As a result, Kim Young-Sam had to carry out a cabinet reshuffle with a new prime minister, Lee Hoi-chang, who was instructed to accelerate the ongoing reform drive. In so doing, the government went ahead with Kim's earlier commitment to opening the agricultural market in stages along the lines of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) trade negotiations.

Real-Name Accounting Reform On August 12, 1993, President Kim issued a decree invoking an emergency clause of the constitution. Article 76 oftheROK constitution stipulates that the "emergency powers" of the president can be invoked "in time of ... a grave financial or economic crisis." This permits executive orders having the effect oflaw "only when it is required to take urgent measures for the maintenance of ... public peace and order, and there is no time to await the convocation of the National Assembly." In addition to the exigencies of the financial and economic crisis, national security contingencies such as "internal turmoil, external menace, natural calamity" are also identified as reasons for the ROK president invoking the emergency decree clause.

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This measure, subsequently approved by the National Assembly, was aimed at doing away with the use of false names and introducing the real-name accounting system. The old system, instituted originally to encourage economic development through saving, was widely misused to avoid paying taxes and became embedded as the source of corruption through a money and power nexus. Under the new law, all accounts under aliases had to be switched to real names within sixty days. Without certification of the real name of bank account holders, withdrawal of any deposits from financial institutions was banned (Korea News review, May 15, 1993). Kim insisted, "Unless the real-name accounting system is introduced, corruption and the collusive links between government and business cannot be severed" (Korea Newsreview, August 21, 1993: 4, 14). Although intended primarily as an economic reform measure, the new policy would do away with the existing practice of close ties between money and power. The existing system was closely identified with the practice of corruption and bribery of government officials. The real-name accounting system thus gave Kim Young-Sam the weapon needed to carry out the anticorruption campaign that he had laid out thus far. This measure was considered essential also to eliminate an underground economy that was diverting money toward illicit and speculative investments. The underground economy, using fictitious or borrowed names for bank deposits, was estimated to be sizable. Although the law on the real-name accounting system had been enacted before, it was not put into effect by the previous regimes due to strong resistance by parliament during the Fifth and Sixth Republics. By the October 12 deadline, an estimated 2.7 trillion won in fictitious accounts at banks and financial institutions was converted to real-name accounts. This represented 95 percent of all alias accounts. Depositors with 266 trillion won in realname accounts, representing 78 percent of341 trillion won in real-name accounts, were also identified and their accounts were confirmed (Korea News review, October 23, 1993: 14). Deposits of 140 billion won were estimated to be associated with depositors who did not want their identities disclosed. Since this amount was perhaps accumulated by illegal means or dodged taxes, they were now subject to an investigation by authorities for possible tax evasion. With the real-name accounting system in place, secret funds could no longer be diverted to questionable use in politics or in business. Kim's anticorruption and irregularities campaigns proved to be the center piece of his successful economic reform measures. Although these financial measures initially caused temporary disturbances in the market, the long-term effects were considered to be healthy and sanguine. Financial Market Liberalization In June 1993, the Kim Young-Sam administration unveiled the Financial Liberalization and Market Opening Plan, followed by the Foreign Exchange Reform Plan a year and a half later. By calling for liberalizing interest rates and reducing the scope of government intervention in the financial sector, these plans encouraged

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greater foreign participation in the South Korean financial and capital markets and led in 1994 to the abolishment of the ceiling on overseas borrowing by overseas branches of domestic firms. Since the Kim administration also adopted a new policy to encourage South Korea investments abroad so as to develop new markets, these measures dramatically increased offshore financing as well as encouraging outgoing foreign direct investment by South Korean enterprises. The financial market liberalization was motivated both politically and economically as a way of neutralizing domestic political resistance to bold reform measures like real-name accounting systems and helped to raise much needed investment capital through foreign sources. Unfortunately, the financial market opening was done without any real effort to make the financial system more transparent and internationally competitive. This could have been accomplished, for instance, by opening the highly protected domestic financial market to foreign direct investment. In November 1994, as resistance to his economic reform measures started to grow, the Kim government launched a segyehwa (globalization) drive as the top priority of his administration for 1995 (C. Kang, 2000). 6 To further this new policy, Kim carried out in December 1994 a major reorganization of the powerful economic bureaucracies of the government. He formed a new superagency, the Ministry of Finance and Economy, by merging the Economic Planning Board with the Ministry of Finance. Whereas the former agency was a key promoter of segyehwa, the latter was more reluctant to carry out rapid financial liberalization. By promoting segyehwa, Kim Young-Sam sought Korean membership in the Organization for Economic Cooperation and Development (OECD), which required its members to maintain a high degree of liberalization in financial transactions. South Korea's formal application was initiated in March 1995.

The Fifth Reform Wave: Political Reform with Unintended Consequences The fifth and final wave of democratic reform undertaken by the Kim Young-Sam government had to do with a series of measures reflecting Kim's desire to establish an enduring legacy before his term was to end in February 1998. This effort was more future-oriented and tentative. These measures were intended to transform South Korea into a thriving and successful democratic society by fostering local autonomy and self-government, promoting good neighborly relations, and taking preemptive measures toward globalization. When these measures would be attained and institutionalized, South Korea would be ready to become an advanced industrial and democratic society. Promoting Local Autonomy and Self-Governance The first phase of Kim's effort was geared toward undertaking institutional reforms at the community level. South Korea had long suffered from the practices of

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central government and a top-down rather than bottom-up process of administration. Unless the measures of local autonomy and self-government were firmly established at the regional and local levels, there would be no possibility of ensuring that the new democracy would be genuinely institutionalized. The Kim YoungSam government knew that well. Kim's reform agenda during the first stage was highly visible, but only at the national level, because some of his reform measures, including ethics law for public servants, were largely confined to the upper echelon of civil servants in the central government. However, many believed that, unless an anticorruption campaign was also carried out in the lower echelon of the government bureaucracy, there could be no genuine reform of the civil service system. In September 1994, the Kim Young-Sam government had a lucky break in uncovering a tax embezzlement scandal in the Inchon district office. Tax collector bribery was widespread for many years, as was privately pocketing taxes. The conspiracy of tax embezzlement in this particular case was investigated and subject to criminal indictment, and the government proceeded under the assumption that it might not be an isolated case confined to one locality. A nationwide investigation into the local government tax administration was launched. The purpose here was to purify the public servant's ethical and professional standards at the lower level of bureaucracy in the central and local governments. A citizen-led rally was held in Seoul as a "moral" crusade against the rampant social malpractice, including heinous crimes, murder, and white-collar embezzlement. A heinous crime called Jijonp'a was uncovered in September involving the extortion and murder of innocent victims as well as the conspiracy of kidnapping well-to-do citizens based on a sample of department store clients' lists that were illegally obtained (Han'guk Ilbo, September 23, 1994). So long as public opinion and the press were fully behind the government's renewed policy of reform, Kim Young-Sam was able to keep the political reform agenda alive and well at the lower echelon of the government. The local-level reform was timely and important for the scheduled local elections in the summer of 1995. If the public was kept informed, Kim's overall efforts at political reform would be rewarded politically and he would be regarded as successful. His calculation was that if he could keep the issue alive, local autonomy measures would soon become a reality. A series of local government elections were held in the summer of 1995 to choose mayors and governors as well as members of the deliberative councils. In many of these provincial and local elections, the ruling party candidates unexpectedly failed to capture the key seats of governorship and provincial legislative bodies. Regional issues rather than national politics were the primary concerns of many voters in these local-level elections.? In mid-January 1995, Kim Young-Sam let his political partner Kim Jong-Pil, a former prime minister, know that he would be removed as chairman of the ruling DLP at the coming party convention in February. Thereupon, Kim Jong-Pil left the DLP with his followers and formed the United Liberal Democrats (ULD) (Shim,

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1995a: 17). This split was mentioned by political observers as responsible for the DLP defeat in the June 1995, a historic first in local elections. The ruling DLP won only 33.8 percent of the vote while the largest opposition party, the Democratic Party (DP), gained 30.5 percent, and the newly established ULD 10.8 percent, with independent candidates winning 24.9 percent (Shim, 1995c: 36). The strong showing of the DP in the elections led to the return of Kim DaeJung from his self-imposed retirement after his defeat in the 1992 presidential election. Kim Dae-Jung formed a new political party, the National Congress for New Politics on September 5, 1995. This comeback of Kim Dae-Jung and Kim Jong-Pil's departure from the DLPprovided a difficult problem politically for Kim Young-Sam (C. Kang, 2002). 8 To make the political situation worse, the real-name reform unexpectedly led to a startling revelation in late 1995, as will be noted in the next section of this chapter. Former president Roh had accumulated a staggering sum of business contributions during his tenure (Shim, 1995b: 16-17). This started a political chain reaction that unfortunately implicated Kim Young-Sam as sitting president. The question arose as to how Roh had spent 330 billion won out of the 500 billion won he had amassed. A strong suspicion naturally arose that Roh had given the bulk of money from his secret coffer to Kim Young-Sam, who was after all a candidate of Rob's DLP for the 1992 presidential election. Clearly, Kim's democratic and reformist credentials had become severely tarnished by the time of his party's defeat in the local elections of 1995. More importantly, as a result, the large window of opportunity for transforming the key pillars of the South Korea developmental state was rapidly collapsing, and Kim's reform measures were in full retreat (C. Kang, 2002). The Promise of Foreign Policy and Diplomatic Moves

With the ruling party's failure to win local elections, and other domestic reform agendas unfinished but left behind, Kim Young-Sam chose to move ahead with a new foreign policy initiative and to carry out a diplomatic offensive abroad. In doing so, Kim had his foreign minister, Han Sung-joo, articulate a new foreign policy or new diplomacy. This new policy was designed to diversify South Korea's foreign relations and to increase its global activities. These measures were expected to overcome competition with North Korea, inject a new "moral and ethical dimension in diplomacy," and streamline the policy making and implementation processes. The implications of these policies may be assessed in the light of Korea's Confucian traditions. That theme will be further explored in Chapter 7. It can be argued, however, that Kim's new diplomacy agenda was governed by Confucian notions of Sadae Kyorin (Serve the Great and Promote Neighborliness), the guiding principle of diplomacy during the Choson dynasty. This int1uence was ret1ected in a series of diplomatic state visits to various countries during thP, first and second years of his administration. Kim received President

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Bill Clinton in early June 1993, as well as Japanese prime minister Morihiro Hosokawa in October. Kim's first official trip abroad was a state visit to the United States in December 1993, followed by official visits to Japan, China, and Russia in the spring of 1994. These visits were an attempt to promote trade and economic relations. He also welcomed leaders from all of these countries except China. Despite these busy diplomatic activities, Kim's foreign policy was said to lack substantive programs and ideas as to how to use diplomacy to enhance the welfare and interest of the people. His foreign policy was also criticized as lacking consistency and vision. Inter-Korean relations, however, faced particular challenges and frustrations. Since 1993, South Korea had not been able to carry on a meaningful dialogue and negotiation with North Korea. Thanks to an intermediary role played by former president Jimmy Carter in June 1994, an opportunity to break the stalemate arose when Kim Young-Sam accepted an offer by North Korean leader Kim 11-Sung to hold a summit meeting. Kim 11-Sung's sudden death on July 8, 1994, however, aborted the summit. Unless there was a drastic change and reform in Seoul's approach to Pyongyang, no fruitful negotiation between the two Korean states would take place. The Geneva talks on the nuclear issue, between the United States and North Korea in 1993-1994, provided a new modus vivendi to overcome the tensions on the Korean Peninsula. 9 In this process, the ROK was not directly involved but played a supportive role to the United States on the sidelines. The attempt to upgrade inter-Korean relations did not succeed during the Kim Young-Sam administration. The principles for reconciliation and cooperation, as adopted in the 1991 basic agreements between the two sides, provided a way of normalizing interKorean relations and an eventual reunification of Korea. But, due to the intransigence of North Korea, these principles never had a chance of being implemented. The Kim Young-Sam government was therefore unable to make headway toward improving inter-Korean relations. 10 Preemptive Measures Toward Globalization

The third phase of Kim's reform agenda that had unintended consequences was to promote globalization and internationalization. Internationalization was presented as a way to reinvigorate economic reform at the close of the Kim Young-Sam administration. Whereas globalization was said to reflect the changing reality of the world, moving toward greater economic integration in a borderless economy, internationalization was considered to be an active adaptation and survival strategy in an increasingly interdependent and competitive world economy. Initially, the Commission for Internationalization was created as an advisory body to the prime minister, launched in May 1994, with fourteen members and chaired by Kim Kyong-won, the former Korean ambassador to the United States during the Chun Doo-Hwan era. However, this body was subsequently preempted and newly orga-

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nized as a presidential commission six months later (Kukjehwaui kenyom mit ch 'ujin kibon banghyang, 1994: 6--9). At the same time as the Seattle meeting of the APEC (Asia Pacific Economic Cooperation) forum in November 1993, President Kim actively began to promote his new agenda for the internationalization and globalization of the Korean economy. That is why, for instance, the Kim administration decided to go along with the Uruguay Round of the GATT negotiation terms of settlement on agricultural trade by acceding to international pressure for South Korea's opening of the rice market. The Kim government was preoccupied in 1995 with the questions of how to adjust to changing trade requirements in the post-Uruguay Round. The challenge was to keep up with increasing external pressures for the opening of the domestic market while making Korean industries more efficient and sufficiently productive to remain in the global marketplace. This required new thinking and hard decisions by both government and big business in terms of future investment and structural adjustment. Without internationalization measures, Kim reasoned, the Korean economy would be ill prepared for the more competitive and borderless world economy of the twenty-first century. More specific measures of internationalization included Kim's plea for productivity enhancement in industry by greater investment in research and development, promotion of harmonious management-labor relations, and an amicable settlement of labor disputes by keeping wage increases within reasonable bounds. To accomplish this ambitious program, the government had to adopt a fiscal policy that would hold inflationary pressures down and also invest heavily in infrastructure building and modernization. Examples included the construction of a new information infrastructure and a rapid railway transportation system. These progressive measures were right on target, in so far as the ideas of responding to globalization pressures were concerned, but the Korean economy was basically ill prepared to confront the challenge of the global economy. The South Korean economy was ill suited to participate in the competitive world market without first undergoing the structural reform of the mercantile economy in favor of market-oriented business practices and a free enterprise economy. This subject will be addressed further in Chapters 5 and 6. Underlying Kim's globalization policy initiative called the segyehwa drive and the financial liberalization measures of the Kim administration in 1995-1996 was the concern over the economy and a determination to further its growth in the second half of his five-year term. Kim Young-Sam was well aware that the economy had started to slow down during the last year of the Roh Tae-Woo administration in 1992 and he wanted to avoid that situation. As compared to the performance of the economy during the preceding ten years ( 1983-1992) of his predecessors, the economy as a whole was experiencing difficulties in sustaining the high annual growth rates of gross domestic product and exports. Table 4.1 shows the overall performance of the Korean economy from 1993 to

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Table 4.1

Korean Economic Performance, 1993-1997: Select Indicators Indicators: Annual economic growth rate(%) Inflation: CPI increase(%) Growth rate of exports (%) Growth rate of imports(%) Unemployment ratio(%)

1993

1994

1995

1996

1997

5.5 4.8 7.3 2.5 2.9

8.3 6.3 16.8 22.1 2.5

8.9 4.5 30.3 32.0 2.1

6.8 4.9 3.7 11.3 2.0

5.0 4.4 5.0 3.8 2.6

Source: Korea's Economy 2000, Vol. 16 (Washington, D.C.: Korea Economic Institute, 2000), p. iii, 54; "Major Statistics of Korean Economy," National Statistical Office, Seoul, 1995 (www.nso. o.kr).

1997 on key indicators. Whereas the economy started turning around in 1994 and 1995, it was preceded and followed by slower growth rates and slower growth rates in trade sectors. By launching the segyehwa drive of liberalization reform, Kim Young-Sam was determined to avoid the appearance of a lame-duck presidency, with slower and slackened economic performance in the last year of his administration. Ironically, the Kim Young-Sam administration ended with the same problems as did his predecessor Roh Tae-Woo despite-or because of-the segyehwa initiative that was not well conceived to prevent havoc to the Korean economy in the last year of his administration in 1997. ll The Korean economy in 1996 was relatively sound, registering a 6.8 percent GNP growth rate with a 4.9 percent growth in inflation. The growth in the foreign trade sector, however, was sluggish and the current account deficit marked a record high of $2.37 billion dollars. Despite these contradictory figures, many observers forecast that the Korean economy would see a full economic recovery in 1997. This prediction had turned out to be false because of a series of corporate bankruptcies. These business failures, in turn, had adversary effects on the financial institutions that had lent money, while the credit ratings of the Korean banks were downgraded by international credit rating agencies. Hanbo Steel Company's bankruptcy on January 23, 1997, for instance, caused Standard and Poor's and Moody's Investor's Service to downgrade the rating for Korea's First Bank, Hanbo's leading creditor bank, to "very watchful." As the economy began to lose international credit ratings, the Kim Young-Sam administration established an economic policy team, headed by Finance and Economy Minister Kang Kyung-shik and Senior Presidential Secretary for Economic Affairs Kim In-ho, to confront the economic situation. In March 1997, it was reported that Korea's foreign exchange reserves had tumbled to $28 billion, far below the International Monetary Fund (IMF) advised minimum level of $34 billion. In April1997, the Bank of Korea announced that Korea's total debts were

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$104.5 billion at the conclusion of 1996, up $21.6 billion from the previous year. In March 1997, the ailing Sammi Steel Company sought court receivership, and provincial merchant banks began to suffer from a serious shortage of foreign funds. Other business conglomerates, like Dainong, Hanshin, and Samlip Food, declared bankruptcies in May. In July, the third largest auto company, Kia Motors, showed signs of difficulty that led to Kia business group, the first chaebol to do so among Korea's top ten, to apply for extension of insolvencies to give more time to revive the businesses. On November 1, Haitai and New Core Business Groups also sought court mediation. The major causes of the Korean economic crisis in 1997 had to do with excessive dependence of the Korean chaebol on loans and the reckless expansion of business when the economy became sluggish in 1996 and 1997. The Korean chaebol competed among themselves at home and abroad by expanding facilities for producing such capital-intensive industries as automobiles, semiconductors, steel, and petrochemicals. Constructing the plants required huge investments, and the chaebol relied heavily on loans. The Bank of Korea data indicated that the average debt-toequity ratio for Korea's manufacturing industry at the end of 1996 reached 317 percent, and for the top thirty conglomerates, 386 percent. These figures were in sharp contrast to the 85.7 percent rate in Taiwan and 206 percent in Japan (Korea Annual1998, 1999: 62). Excessive loans thus fanned the deterioration of corporate profitability that resulted in insolvencies. The Rule of Law and the Court Trial of Former Presidents

Kim Young-Sam's initial launching of his administrative reform package was a great success. Six months after his inauguration, Kim Young-Sam's popularity hit an all-time high of 80 to 90 percent popular support in the polls. However, his popularity started to wane and wax with the implementation of more difficult economic measures that would affect the pocketbooks of average citizens. Following the series of economic reform measures in 1994, Kim's job approval rating started to drop to around 40 percent by November 1994 (Shim, 1994: 15). While struggling to keep the economic house in order, Kim Young-Sam was suddenly awakened by the unfolding story of political scandal, involving mainly his predecessors but implicating himself as well. Kim Young-Sam seemingly had no choice but to let loose the process of uncovering the scandal by bringing his predecessors, former presidents Chun Doo-Hwan and Roh Tae-Woo, to public trial on corruption and sedition charges. The arrest, court trial, and conviction of South Korea's two former presidents on bribery and sedition charges clearly underscored the gravity of South Korea's political scandals at the highest level of the country's national politics. The court trial of the two former presidents was undertaken in the name of establishing the rule of law. 12 This trial was also hailed as an act of South Korea's new democracy consolidating itself. The sentencing of former president Chun to death, in particu-

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lar, was a landmark decision, although the appellate court later commuted Chun's term to a life sentence. In a broader context, the episode may have helped institutionalize the rule of law, rather than the rule of men, in South Korea's emerging new democracy. Roh Tae- Woo's Graft and Corruption Case The case of former president Roh Tae-Woo was exposed first by an opposition MP in the National Assembly. This led to a probe by the prosecution, constituting the first scene of act one. On October 19, 1995, Representative Park Kyedong disclosed in his speech that around the time he stepped down as president, Roh deposited 400 billion won [some $500 million] in slush funds at numerous city banks, of which 30 billion won was deposited at a local bank in Seoul. He then produced a copy of a bank account document that showed the flow ofRoh's money. Although a similar claim earlier in August (by Government Administration Minister Seo Suk-chae) was dismissed as a "wild rumor," this time prosecutors took it seriously. One week later, on October 27, Roh Tae-Woo appeared before national television and tearfully confessed to amassing some 500 billion won in slush funds while in office and that he still had about 170 billion won. On November 15, he was summoned, questioned throughout the night, and then arrested the following day. Further interrogations revealed thatRoh received money from thirty-five businessmen, including the Sa!llsung and Hyundai groups, either as political contributions or as bribery in exchange for favors. His former senior presidential aides and former commerce and industry minister, Kum Jin-ho, who happened to be Roh's brother-in-law, were summoned, along with thirty-six leading businessmen and six other government officials. Roh's graft trial then began on December 18 at the Seoul District Court, where he admitted receiving money from businessmen but denied that the money was in return for any favors. The money, according to Roh, was part of routine contributions that he received as part of his ruling party fund. The businessmen also said that they handed the money to Roh as routine contributions, election funds, or farewell funds, but never asked for any business favors in return. When asked if he handed money to any candidate during the 1992 presidential election, Roh refused to answer, stating, "I cannot disclose it because if I do, it would bring great confusion to the nation." Earlier, Kim Dae-Jung revealed, however, that 2 billion won had been paid to his campaign by former president Roh. This left Kim Young-Sam to make such an admission. Prosecutors' demand for harsh punishments for all those involved was popular, as they argued that the money in question was raised while Roh served as president by taking advantage of his position. They wanted to cut off the collusive government-business link "once and for all" as President Kim Young-Sam set out to do when he assumed his office on February 25, 1993.

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Chun Doo-Hwan's Graft and Corruption Case As for the graft case of former president Chun Doo-H wan, the second scene of act one, the prosecution began investigating Chun on November 30, but the investigation expanded when the treason charges, stemming from the December 12, 1979, military coup and the massacre of civilian protestors in the Kwangju riot of May 1990, were added. The investigation of Chun also revealed that he had raised 950 billion won, of which 750 billion won came from forty-three businesses, while in office. Of the total, prosecutors determined, about 223 billion won was taken in bribes from these forty-three business firms. Just how pervasive corruption was is evident in an episode where Chun's former defense minister Chung Ho-yong received 20 billion won from Samyong Chemical Company, a producer of tear gas and other chemicals. The same company handed over another 10 billion won to Roh Tae-Woo. Chun was indicted on January 12, 1996, along with six of his former senior aides. Chun's trial began on February 26, 1996, at the Seoul District Court. When asked if he had received money from businesses during his presidency, Chun admitted that he had, but stressed that the money was not received in return for favors but for election campaign funds. According to prosecutors, the Hyundai and Samsung groups each gave 22 billion won to Chun and other businesses gave smaller amounts.

Rectifying Past Mistakes via Legislative and Judicial Acts After bribery charges and prosecution were initiated, act two of the political drama started when the other politically sensitive subject of "rebellion" was added to the court proceedings. In order to convict the two former presidents, the Kim YoungSam government had to move with caution and due process of law. Earlier, on May 13, 1993, President Kim maintained that the May 1980 coup d'etat and the brutal suppression of the Kwangju uprising would be better left to history to make a final judgment. However, on November 24, 1995, with the revelation of bribery charges against the two former presidents, President Kim changed his mind and asked his party (by virtue of his serving concurrently as head of the DLP) to try to enact a special law to prosecute those involved in the 1979 coup and the 1980 Kwangju suppression. By reversing his position, President Kim hoped to obtain the upper hand in domestic politics. This popular move would strengthen his hand politically to influence the fifteenth general elections (scheduled for April 1996) and the presidential election (in December 1997) in favor of the ruling party. As the demand for enacting a special law grew, the prosecution ruled in July 1995 that it had no right to investigate those responsible for a successful coup. However, enraged civil leaders (398 in all) filed a petition with the Constitutional Court to challenge the prosecution's decision. The court began to review the petition on August 8, 1995,

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and in its seventh session on November 23 it ruled that the prosecution's claim that it had no right to investigate coup members was unconstitutional. Spurred by this judicial ruling, the ruling DLP moved fast. On November 25, only two days after the ruling, the DLP formed an ad hoc committee in support of further development of a special law. The move to draft the bill was joined by the opposition parties. The two opposition parties initially demanded that a special prosecutor investigate the case, while the ruling party objected to this idea. As a result, the special law was passed through the National Assembly, on December 19, 1995, with a vote of 225 in favor out of the total 247 present. The law was promulgated on December 21 on being adopted by the cabinet. Not all members were present when the vote was taken. Many of those absent from voting were the faction of the ruling party who supported former president Roh.

Sedition Trial Act three of the political drama began when former president Chun Doo-Hwan was arrested on December 1, 1995. Charges against him included masterminding a rebellion, arbitrary departure from duty, and murdering military superiors and gua(ds. On December 21, Chun, along with Roh, was indicted on military rebellion charges in connection with the December 1979 coup. An investigation was launched into thirty-four supporters involved in the December 12, 1979, coup and forty-seven were charged with having played roles in the May 1980 Kwangju incident, including three incumbent lawmakers who were placed under arrest. The three lawmakers were members of the National Assembly: Chung Ho-yong, the Fiftieth Division commander at the time of the coup, and Hur H wa-pyong and Hur Sam-soo, both officers of the Defense Security Command headed by then-major general Chun Doo-Hwan. Those indicted by the special law thus included two former presidents, three incumbent lawmakers, eleven minister-level officials, and four vice-ministerial-level officials. Chun vowed that he would not cooperate in the probe and launched a hunger strike for forty days because, he argued, the prosecution had no right to reinvestigate an incident that had already been closed. In fact, in December 1989, a political deal had been arrived at among political leaders at that time, between President Roh and the three opposition leaders-Kim Young-Sam, Kim Dae-Jung, and Kim Jong-Pil. They had agreed to conclude the case against Chun in return for Chun's testimony at a National Assembly public hearing. Chun's defense lawyers filed an appeal with the Constitutional Court on January 20, 1996, arguing that the enacted special law violated the constitution, which prohibits the legislation of any retroactive laws or statues. The ROK constitution stipulated the statute of limitations of fifteen years. The Constitutional Court, however, ruled on February 16 that the special law as enacted by the National Assembly was indeed constitutional. Of the nine justices on the court, four t>ndorsed the constitutionality of the special law, while there-

132 CHAPTER 4

maining five agreed with Chun's lawyers; a minimum of six votes was required for the law to be ruled unconstitutional. Chun and his colleagues again filed a constitutional appeal against the reinvestigation of those involved in the May 18 riot. However, the court unanimously rejected this appeal on February 29, ruling that the issue regarding the special law was not subject to judicial review. On February 28, 1996, prosecutors announced the outcome of their investigation of Chun, Roh, and eighteen others charged with playing key roles in the December 12, 1979, and May 18, 1980, incidents and turned their cases over to the court. All of them were indicted on various charges. Interestingly, however, on the inspection of the K wangju massacre, prosecutors confirmed that "there were massacres of innocent citizens" but they could not file any charges because "no culprits could be determined." In many instances during the massacre, "many killings were not done only for the sake of Chun's rebellion, but were simply random acts of homicide" and that "the statute of limitations for such crimes had already expired" (Shindong A Monthly, 1996). The historic trial of those involved in the December 12 and May 18 incidents began on March 11, 1996, at the Seoul District Criminal Court. In the trial, the prosecution tried to shed light on the course of events in the May 1980 riot. These included the arrest of Martial Law Commander and Army Chief of Staff Chung Seung-hwa, acting president Choi Kyu-ha's belated approval of the arrest, and Chun's seizure of military control. Other events included the forced merger of news agencies, the expansion of martial law nationwide, and the resignation of then president Choi Kyu-ha. Choi became acting president with Park Chung-Hee's assassination in October 1979. As a caretaker in transition, he served as president until August 1980, when Chun took over after the rubber-stamp electoral college elected him as new president. After more than five months of trial proceedings in 1996, the Seoul district court, on August 26, sentenced former president Chun Doo-Hwan to death after finding him guilty of mutiny, treason, and corruption. Roh Tae-Woo, Chun' s successor as president, was sentenced to twenty-two and a half years in prison on similar charges. The presiding judge in a three-judge panel declared, in reading out the verdict and sentences, that the crimes committed were serious enough to warrant the most severe punishment. Roh was spared the punishment of life imprisonment demanded by prosecutors on the grounds (as Judge Kim Young-II said) that Roh had only been following Chun's lead and that Rob's efforts to promote democracy in South Korea had been taken into account. Both Chun and Roh were found guilty of amassing hundreds of millions of dollars in illegal political funds during their terms. Chun was fined $270 million and Roh $350 million. 13 A few days later, the verdict was appealed. According to a press report, Choi Kyu-ha was the only former ROK president not currently in jail, but he was fined for ignoring a court order to testify in the appeals trial of his two successors, who had been convicted of mutiny and treason in August ("Ex-South Korean Official Fined," 1996). Choi had been a caretaker leader for eight months in 1979, between

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the assassination of Park and the military coup that brought Chun and Roh to power. Choi 's testimony was deemed crucial to clarifying events around the coup, which was central to Chun's and Roh's convictions. Choi steadfastly refused to testify, citing presidential immunity. Senior Judge Kwon Sung fined Choi $120 and issued a new summons for Choi to testify the following week, a summons that Choi ignored. Thirteen other former generals who were tried along with the former presidents on sedition and treason charges were also convicted. All except Chun received lesser sentences than those sought by the prosecutors; one ex-general was found not guilty. Verdicts subsequently were also rendered in political corruption cases involving other top officials and business executives and sentences were handed down. Thus ended act three of the political drama of "the trial of the century." Importance of the Verdict

What is the significance of these events? The trial was viewed by many as "less a hearing on the specific crimes committed" some years ago and more "as a pivotal step toward the establishment of the rule of law" by a country trying to cleanse itself of its brutal and corrupt past. The verdict represented an ignominious ending for the two former army generals who ruled South Korea during the 1980s and early 1990s and [who] were instrumental in shaping its emergence as an Asian economic powerhouse. Indeed, the spectacle of the two former rulers, dressed in prison uniforms like common criminals and standing powerless before the three judges, riveted the nation. South Koreans gathered around television sets in homes, stores and offices to watch the unfolding of a drama that has become a symbol of the political transformation that South Korea has undergone in the past three years. (Sugawara, 1996: A01) President Kim's bold decision on the court trial of two former presidents was praised by many of his followers. Through his actions, Kim Young-Sam seems to have combined the virtues of both the "rule by men" practice, the Confucian cultural legacy of the past, and the "rule of law" principle, the democratic norm of the present and for the future. In this sense, Kim was truly a transitional figure between the old and the new political traditions and institutions of Korea's modem politics. Kim's reform agenda had scored a dramatic success over anticorruption. He then moved on to other pressing issues to carry out ongoing and unfinished reform measures, like the segyehwa drive, as already noted in the preceding discussion. This discussion will be resumed in Chapter 5.

Structure, Culture, and Failed Reform President Kim Young-Sam had pledged to clean up old politics by severing the ties of power-money collusion once and for all. He officially refused to accept political

134 CHAPTER 4

contributions and distanced himselffrom business leaders. Kim's image as a clean politician, however, was shattered toward the end of his five-year term. His promises of democratic reform and moral politics were irreparably damaged when his most trusted aide, Hong In-gil, was arrested on charges of influence peddling and a loan scandal in association with Hanbo Steel, which eventually collapsed. When his second son, Kim Hyun-chol, was also tried and convicted for illicit activities on behalf of chaebol interests, President Kim Young-Sam lost his power of moral persuasion. In the context of Korea's Confucian culture, the father is the source of moral authority of the family and his son's illicit acts caused Kim Young-Sam to lose face and moral authority as a political leader. Kim Young-Sam's anticorruption campaign and the agenda of democratic reform were visibly weakened over time, even without the Hanbo Steel scandal. Toward the end of his tenure, his national governance and reform politics became paralyzed and did not achieve any significant results. Hence, the economic crisis along with political corruption and unfinished democratic reforms remained as legacies of Kim Young-Sam's presidency (Moon and Mo, 1999b: 402). Not surprisingly, public approval of President Kim Young-Sam fell drastically from 90 percent in 1993 to 10 percent in 1998. His five-year tenure in office was called the most "heroic" failure in the history of Korean political history (Shin, 1999: xxxi). How do we explain this failure of political leadership during the Kim Young-Sam government?

Kim Young-Sam as Reformer At the time of Korea's democratic opening and transition in 1987, Kim YoungSam was already a proven veteran politician. Kim had long been a champion of democracy and his credentials as an opposition party leader were battle tested and proven during the era of South Korea's authoritarian politics. In 1979, when former general Park Chung-Hee was in power, Kim was expelled from the National Assembly for labeling the Park regime "dictatorial" in his interview with the New York Times and calling on the United States to support Korea's democratization. In 1983, when former general Chun Doo-Hwan was in power, Kim staged a twentythree-day hunger strike to demand democratic reform. Before the hunger strike, which almost led to his death, Kim was under house arrest for more than three years (Shin, 1999: 199). Unlike Roh Tae-Woo, Kim's immediate predecessor, who was a leader in the 1979 military coup d'etat and subsequently elected as civilian president in 1987, Kim Young-Sam was a seasoned parliamentarian and a veteran party politician. Kim had won nine elections to the National Assembly and served five times as an opposition floor leader. He had also served as the leader of four different opposition parties after he broke with the first president of Korea, Syngman Rhee, who amended the constitution to permit a third term. Kim Young-Sam's role as the leader of an opposition party, however, ended in January 1990 when his party and

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another opposition party decided to merge with the then ruling Democratic Justice Party to form a new majority party for the Roh government. During Korea's authoritarian politics, Kim Young-Sam was a rebel with a cause and a strong belief in democracy. As an elected president, Kim turned into a reformer with a sense of historical mission to tum the post-Confucian society of Korea into a Western-style, modernized, and democratic nation of freedom and prosperity. Kim Young-Sam's vision was to make South Korea more competitive in the world marketplace in the new age of international competition. Whether and how the post-Confucian society of South Korea could be transformed overnight into an advanced democratic society, however, remained an unsettled issue. Kim's reform package consisted of three separate and disjointed steps. First, he needed to further secure and enhance the political legitimacy of the Sixth Republic. Second, he launched an ambitious program of "clean politics" or house cleaning by eliminating business irregularities and corruption practices in politics and economics. Third, he wanted to enhance Korea's status internationally by promoting active diplomacy and a new initiative toward North Korea. At the time of Kim's presidency in 1993, the challenge of South Korea laid not so much in restoring governmental legitimacy, which was already secure and sound, as in ensuring political leadership that was both effective and efficient in carrying out democratic consolidation. President Kim Young-Sam, as a democratically elected leader, had solved the legitimacy question in South Korean politics. No other regimes in the past, except the Second Republic under Chang Myon, could make such a claim. However, Kim Young-Sam's reform agenda during the first year of his administration was a necessary, but not sufficient, basis for leadership. After all, he was elected as president of the country to govern the land for a fixed term of five years. Without slowing down the pace of reforming the society, Kim Young-Sam could prove that he was indeed capable and successful as a president who could provide a sense of direction and vision for the country. Kim's leadership should have been demonstrated both in a domestic policy agenda, by reviving the economy and making the life of ordinary Koreans happy and prosperous, and in a clear foreign policy agenda. There were indications that the Kim administration was too preoccupied with the question of legitimacy and not concerned enough about performance and related issues of how to enhance economic prosperity. The government was criticized for not being effective in implementing both domestic and foreign policy agendas, including international trade and finance, because of Kim's indecision and lack of clear-cut policy directions and guidelines (Cho, 1994). President Kim Young-Sam's reform program was the substance of his blueprint for "curing the Korean disease" and building a "new Korea [that] will be a freer and more mature democracy." Kim's reform agenda, the mainstay of democratic consolidation and realizing mature democracy, was carried out in several stages and successive waves of reform, with at least five identifiable sequences and steps

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already examined. Each step of the reforms was characterized by a cycle of rise and fall in the zeal and enthusiasm for reform. Whereas the first three waves of reform were relatively smooth and met by surging popularity, the fourth wave of reform on the economy and the fifth one on local autonomy and segyehwa were more difficult to carry out successfully. By the time Kim undertook the fourth and fifth waves of reform, there was sufficient lead and warning time to alert those with vested interests who were either opposed to reform or less enthusiastic about changes in the status quo. The zeal for reform, inspired by moral conviction and a political sense of justice, had dwindled and was counteracted more by practical and pragmatic considerations. Kim Young-Sam's reform program beyond his second year in office had already turned into a more or less watered down version of what he called "change, reform, and progress" with less focus and direction. His reform package was now criticized as containing more rhetoric and verbal attacks. His reform on chaebol specialization failed to get off the ground as the government approved, on December 7, 1994, Samsung's bid to enter the already crowded automobile industry with five domestic manufacturers. His administration lacked the political will and acumen to use a stick and carrot effectively. Forceful sanctions were considered essential for enforcement and punishment of the perpetrators of injustice. In this sense, Kim Young-Sam's reform programs, except the trial of the two former presidents in the third year in 1995, became basically moderate and conservative rather than radical and innovative. Basically, Kim was not a revolutionary but a reformer intent on bringing about political and socioeconomic change by peaceful means rather than by forceful means or violence. His reforms, even if behind schedule, were not likely to lead to violence or any type of change amounting to revolution. On December 26, 1997, in consultation with President-Elect Kim Dae-Jung, President Kim Young-Sam granted amnesty to former presidents Chun Doo-Hwan and Roh Tae-Woo. Kim Young-Sam as a reformer was not going to allow a forceful change of the new political order of liberal democracy or an overthrow of the capitalist economic system. He was a product of Korea's traditional culture that emphasized moral and ethical values, overlaid by the sense of harmony and moderation that Confucianism represents. Yet, Kim Young-Sam was at the same time reflective of a political process and movement that aspired to bring about liberal democracy. The rapid modernization and socioeconomic changes that visited South Korea from the 1970s to the 1990s gave rise to pluralism and activated a form of civil society that, in turn, promoted the conditions for democratization and political democracy (S. Kim, 2000). Kim Young-Sam's Legislative Blundering The 1997 economic crisis, the financial bailout by the IMF, and the placement of the national economy under IMF trusteeship may have wiped out whatever gains the

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Figure 4.1

137

A Political Situation of Launching Reform Measures, 1995-1996

Parliamentary Arena

Opposition

(1)

(3) Employer/Worker Arena

Ruling Party (NKP)

(2)

Societal Arena

Big Business

ROK economy enjoyed from an enhanced international status. Something went wrong with Kim's efforts under the banner of segyehwa. Figure 4.1 shows the theoretical situation of the Kim Young-Sam government vis-a-vis the major domestic actors at the time of the launching of its reform agenda and the segyehwa drive in 1996. The primary political actors involved in the December 1996 decision on reform legislation, in proactive moves regarding the globalization impact, were, of course, the Kim Young-Sam administration and its ruling New Korea Party (NKP) in parliament. They introduced a series of reform bills, including labor legislation, to the National Assembly. Opposition political parties in parliament, which were close in alliance with civil-society groups outside parliament, including the trade unions and nonunion workers, were bypassed in the process of enacting these reform bills. There were three main structural arenas in the interaction among the relevant political actors and their interaction processes. These interaction arenas and the pattern of their interaction, in terms of whether their respective position was positive, negative, or neutral on the issues of reform measures, are shown as follows: Structure of Arenas 1. Parliamentary arena 2. State/Business Arena 3. Employer/Labor Arena

Pattern of Interaction (Positive, Negative, Neutral)

+

In 1996, on the eve of launching the segyehwa drive, the Kim Young-Sam government was confronted with the difficult situation of harmonizing its policy of economic reform that the globalization agenda required and the interests of the major actors of opposition in parliament and others of big business and labor/unions in the civil society. Figure 4.1 shows the game theoretical situation of the Prisoner's Dilemma of the government vis-a-vis the political opposition in parliament in 1996. Kim Young-Sam's chaebol specialization reform, announced in the new FiveYear Economic Plan of July 1, 1993, had three interrelated objectives: to reduce the chaebol's predominance in the economy, to improve the international competi-

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tiveness of each chaebol by encouraging specialization in core business activities, and to promote the small- and medium-sized enterprises as a countermeasure to dominance by the chaebol. Clearly, the pattern of interaction between the state and business was positive, as contrasted with the ruling party and political opposition relations in the parliamentary arena and the employer and labor relations in the economy, which were confrontational rather than harmonious and cooperative. The political situation at the time of launching Kim Young-Sam's labor reform measures in 1995-1996 was as follows. Although Kim Young-Sam was elected president as the DLP candidate in December 1992, he soon acted to reconstitute the ruling NKP by changing its name, which resulted in some defections and realignment in the National Assembly. The new NKP actively campaigned for the general elections to choose members of the fifteenth National Assembly held on April11, 1996. 14 In this election, Kim's NKPwon 139 seats, including those allotted by the proportional representation system. The result was 11 seats short of a simply majority in the 299-member parliament. However, the NKP succeeded in securing a house majority by winning over twelve lawmakers-elect, who switched their party affiliations and joined the ruling camp, which included independents and some opposition party members. Therefore, the Kim Young-Sam administration was able to control the legislative agenda through the ruling NKP in parliament during the remainder of its five year-term in office. However, with its majority stance in parliament, Kim's ruling NKP made a serious legislative blunder in December 1996. By the ruling NKP pushing major reform bills through the legislature in the early hours of December 26, 1996, without debates and participation by the opposition parties, the Kim Young-Sam government alienated political opposition in both the parliamentary and employer-labor arenas. The only initial support and positive response given to the government was in the state-business arena and that was soon the target of antigovernment street demonstrations waged by students and the progressive forces in civil society. These "blitzkrieg" tactics of railroading the major bills, including one on industrial relations, through the National Assembly backfired. They were met by public outcry and by organized labor with charges of foul play and strong-arm tactics and by antigovernment demonstrations and protest strikes (Koo, 2001: 199). In pressing the measures through parliament, the ruling party was in alliance with the business sector in its attempt to stimulate the economy and enhance the competitiveness of the Korean economy in a globalized economy. To be successful, however, globalization must be preceded by the prior measures of liberalization, deregulation, and rationalization. These were the forces fundamental to comprehensive realignments of the economy. Taking incentives away from the old vested interests and creating new beneficiaries required corresponding structural changes. A key tenet of globalization is deregulation, which opens all sectors of the economy to outside competition. The intent is to increase efficiency to strengthen the economy as a whole. Such structural realignments did not take place under the Kim Young-Sam ad-

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ministration and the result was a discrepancy between the power base and policy behavior. Despite the government's effort to press for active globalization, every sector of society resisted its moves. While business firms were reluctant to adopt global standards in corporate management, bureaucrats also sabotaged deregulation and rationalization more subtly. To workers, farmers, and teachers afraid of losing their rent haven, the implications of globalization were an anathema. Even lawyers opposed the globalization program one way or another (Moon and Mo, 1999b: 405; Koo, 2001: 201). Kim's earlier pledges to undertake labor reforms in favor of workers were altered to accommodate business demands, which ultimately failed to satisfy either party. Likewise, tensions and contradictions between mandates of democratization and globalization posed profound structural constraints on the Kim Young-Sam administration reform drive (Moon and Mo, 1999b: 407). The pro-business stance of the administration drive toward globalization was shown by the fact that chaebol reforms started to dwindle and did not go beyond making the top thirty conglomerates submit a list of core industries on which they wanted to focus. It took many years for Japan, after joining the OECD in 1981, to arrive at full compliance with OECD standards on protectionism and market opening, especially in agriculture. But for Korea's Sixth Republic, South Korea's OECD membership involved almost immediate and instantaneous response to globalization pressures. The requirements for the Kim Young-Sam administration to comply with OECD rules and norms for liberalization were clearly harsher and stricter than they were for the earlier Japanese entry.

Structure-Culture Interface of Reform Politics Kim Young-Sam, as a long-time opposition politician, had a vision of, and commitment to, democratic consolidation and reform. Indeed, the Kim Young-Sam administration made important achievements; it not only depoliticized the military by purging the dominant Hanahoe faction, which was a constant source of military intervention in civil politics, but it also ensured government neutrality and fairness in electoral management. In fact, if not for these achievements, the election of Kim Dae-Jung as new president and the first peaceful transfer of political power by a coalition of opposition parties would not have been realized in the December 1997 presidential election. While preserving freedom of expression and association, local elections and autonomy of self-government at the provincial and municipal levels had come to flourish during the latter half of President Kim Young-Sam's term in office. Despite strong opposition from conservatives and the business community, the Kim administration introduced the real-name financial and real estate transaction systems. These reforms had profound implications for economic distribution (Moon and Mo, 1999b: 402). Despite these positive achievements, the administration fell short of completing democratic consolidation. Politics remained stagnant due to regional polariza-

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tion, a divided National Assembly, a fragmented party system, political corruption, and political apathy that continued to prevail. Of course, one can argue that achieving democratic consolidation was the responsibility of more than a single political leader. While structural rigidity emanating from coalition dynamics delimited the scope of democratic reforms, according to Chung-in Moon and Jongryn Mo, "the partisan divide blocked a cultural shift necessary for democratic consolidation" (1999b: 403). Furthermore, there was no significant transformation of either the elite or mass public during the Kim Young-Sam era. Patterns of old politics recurred, such as protracted regional, factional, and personal politics. Authoritarian trends remained embedded in the governmental style, while voting behavior remained skewed along regional lines with accompanying political apathy. Absence of political learning and slow progress in the rise of civil society delayed the process of culture shift and democratic consolidation. Thus, Kim Young-Sam as a politician was more "a victim of transitional democracy torn between the new mandates of democratic reforms and the old inertia of traditional politics" (Moon and Mo, 1999b: 404). The failure of the Kim Young-Sam reform agenda can be explained by an interplay of the political structure and cultural factors. Three structural factors severely constrained the effectiveness of Kim's reform politics. The first structural constraint came from coalition dynamics (Haggard and Kang, 1999). Kim YoungSam created a grand conservative ruling coalition through the merger of his party with the DJP in 1990. This coalition gradually worked to undercut Kim's liberal posture and ultimately contributed to derailing reform efforts. The second constraint was related to state structure. The constitutional arrangement of the Korean state had produced the myth of a strong state. But a closer examination would reveal that the entrenched bureaucrats undermined Kim's leadership as they had derailed his reform efforts. Institutional arrangements also mattered. The single, five-year term made the president vulnerable to the lame-duck phenomenon, thus diminishing his authority sooner than expected. At the same time, the weak and personalized nature of the political party system failed to generate institutionalized support for Kim's reform efforts (Moon and Mo, 1999b: 403). The third constraint on cultural factors was equally critical in Korean politics during the Kim Young-Sam era. Democratic transition in South Korea was not followed by the corresponding cultural shift, giving rise to a timely institutionalization of democratic civil society. Patterns of political socialization were still governed by traditional templates of political culture (Hahm and Rhyu, 1999). Citizens' blind loyalty to regional, local, blood, and school ties delayed the behavioral and civic-cultural reorientation toward democratic consolidation. While traditional cultural norms deepened factionalism and regionalism in Korean politics, these also undermined Kim's agenda on national governance. Local-level political leaders also manipulated the regional divisions to their own advantage, thereby undermining the process of elite settlement and democratic consolidation (J. Choi eta!., 1999). Old practices of exchanging political patron-

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age for financial support continued even after the democratic transition, as evidenced by the arrest of President Kim's second son and his associates. "High cost politics in South Korea compounded the situation, aggravating political corruption and eroding the people's trust in government and politics" (Moon and Mo, 1999b: 403). Democratic transition and consolidation can be regarded as a constant process of political learning through trial and error without which democracy may not develop and mature. Even though some industrial-labor relations showed signs of political learning, there was no significant breakthrough in overall political learning for either the elite or the masses during the Kim Young-Sam era. These included the recurrence of patterns of old politics and protracted regional, factional, and personal politics, along with lingering authoritarian tendencies in governance style, highly skewed voting behavior along regional lines, and pervasive political apathy. "Absence of political learning delayed the process of cultural shift and democratic consolidation" (Moon and Mo, 1999b: 404). In view of these structural and cultural constraints, it seems misleading to blame the failure of democratic reforms entirely on Kim's leadership or lack of it. Consolidatin~ a new democracy for South Korea required joint efforts by both leaders and followers to secure support for democratic change, cultural shift, and overall behavioral modification. During the Kim Young-Sam era, however, the precarious entanglement of both structure and culture left Kim Young-Sam and his administration without the prerequisites of a maturing democracy; Kim's failure to provide strong and effective leadership simply made the situation worse (Moon and Mo, 1999b: 404). While democratization posed internal challenges to the Kim Young-Sam administration, globalization generated formidable external pressures (Ikenberry, 1999; and Bobrow and Na, 1999). Unlike his predecessors, however, President Kim Young-Sam responded to "waves of spontaneous globalization in a proactive and even preemptive manner." Kim declared segyehwa to be the leading doctrine for national governance in the second half of his term. He ratified the Uruguay Round agreement and blessed the launching of the new World Trade Organization. He also pursued early, voluntary admission to the OECD. These strategies required opening financial markets and significantly enhancing South Korea's international status. The costs of the proactive globalization drive proved to be high. In retrospect, the segyehwa strategy of President Kim Young-Sam was faulty in its conception and was consequently unable to face the economic and political fallout. The plan was hastily drawn up and the country unprepared to face the consequences. The globalization campaign was initially designed not only to pacify domestic political opposition, followed by the ratification of the Uruguay Round agreement and the subsequent liberalization of domestic markets, but also to serve as an ideological alternative to replace democratic reforms that were losing popular appeal. The domestic political use of globalization rhetoric, while underestimating its negative boomerang effects, led to catastrophic consequences like the 1997-1998 economic crisis (Moon and Mo, 1999b: 405).

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This leaves us with the question of how to further the cause of democracy in post-Confucian Korean society. Despite the popular perception that democracy and Confucianism do not appear to be compatible, the fact remains that "culture is no destiny [but] democracy is," as the opposition leader Kim Dae-Jung claims in "Is Culture Destiny: The Myth of Asia's Anti-democratic Values" (1994b), and that it is possible to further political democracy in post-Confucian society (see Chapter 9). One needs to work with the reality that contemporary Korean society is not only influenced by the legacy of Confucianism, but also by the rapid changes and modernization caused by industrialization, urbanization, and the information revolution. Moreover, acculturation or cultural change is still taking place in such economically developing Asian societies as Japan and South Korea. As such, the new culture of political democracy in Korea is still evolving. Conclusion

Although democratic transition took place, it did not reach the stage offull democratic consolidation during the tenure of the Kim Young-Sam government. Even if constitutional consolidation by the Kim administration was completed by 1993, South Korea was still short of institutional, behavioral, and civic-cultural consolidation. While traditional political culture impeded democratic reorientation of citizens' behavioral and civil-cultural attitudes as well as elite settlement, vested interests of the conservative coalition prevented the Kim Young-Sam government from completing the processes of institutional consolidation (Moon and Mo, 1999a: 15). In fact, the critics point out that the Kim Young-Sam administration failed to complete democratic consolidation because the "vested interests of conservative forces, an inertia-driven bureaucratic system, newly emerging political gridlock, and traditional political culture all prevented Kim from completing his democratic reform agenda" (Moon and Mo, 1999a: 21). The South Korean case illustrates that democratic consolidation is much more challenging than democratic transition following authoritarian decay and democratic opening. The new policy initiative of Kim's globalization agenda was undertaken, for instance, without corresponding domestic reforms, as Chapter 5 will argue, resulting in a "premature opening" and subsequent hardship. More critical was "the resistance of domestic political forces which impeded the process of globalization by blocking liberalization, deregulation, and rationalization" (Moon and Mo, 1999a: 21). Thus, the Kim Young-Sam government efforts at democratic consolidation via reform measures were not well synchronized or implemented. Also, Kim's fifth wave of democratic reform, for instance, represented what Moon and Mo characterize as "a period of incomplete democracy and unprepared globalization" (1999a: 22). Kim's inadequate leadership, combined with structural rigidity, parochial political culture, and transitional uncertainty, all held the Kim government at bay, fundamentally limiting the scope of its policy and political maneuverability (22).

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Does the democratic reform of President Kim Young-Sam constitute a "great" reform as stipulated by Oksenberg and Dickson? The answer is both "yes" in promise and "no" in performance. How do we know when and whether a new democracy is consolidated? According to Adam Prezeworski, democratic consolidation is working when the political system "becomes the only game in town, and is so accepted" by the people (1991: 26). From this perspective, the trial of the two former presidents in South Korea was a remarkable feat in that it went through without being challenged by either the military or the conservative political forces, which were the remnants of the past authoritarian rule under Chun Doo-Hwan and Roh Tae-Woo. This is a mark of South Korea's nascent democracy attaining political maturity while successfully attaining democratic consolidation. Of the few lessons to be drawn from the case of South Korea's "trial of the century" (the sentencing of the two former presidents on corruption and mutiny charges), the following are particularly important and noteworthy: First, the rule of law standard was followed in the successful conclusion of the trial. Trial proceedings followed due process of law in an open court rather than being influenced unduly by the political pressures outside the court. Second, the exercise '.lf political leadership was key to the success of carrying out the reform agenda for a new democracy. Without the strong determination and the historical vision that a reformist politician like Kim Young-Sam personified, the trial episode could have led to political disintegration. Third, democratization is an ongoing process that needs to address the issues of both present and past, especially to rectify the past mistakes of authoritarian practices of the bygone era. The agenda of democratic consolidation, once transition is complete, consists of confronting the legitimacy question "openly and squarely" rather than avoiding or postponing it in the name of maintaining stability and social harmony. The idea of government by "the rule of men of virtue and wisdom" was intrinsic to the Confucian tradition. Yet, the idea of government by "the rule of law" is also a basic principle of democracy and of the theory of modern government. Because of this apparent contradiction as manifest during the Kim Young-Sam administration, the Western theory of government as well as the Confucian theory and practice of "good government" should not be taken for granted. The business of government, whether traditional or modem, should be guided by "the rule of law" principle that reflects societal morality and ethical standards. Government by "the rule of men" attributed to the Eastern tradition is tantamount to "the rule of law" as interpreted by "men of virtue and wisdom." 15 What made Kim's "reform halfway down" despite his initial determination to pursue "reform all the way down" was the poor record of performance in the final year of his term when he was a lame-duck president unable to use his leadership to overcome the political stalemate. The collapse of several big business enterprises, including the Hanbo Steel Company, was a serious blow to the Korean economy. The conviction of his close aide and his own son, implicated in the scandal of influence peddling, was a fatal blow to Kim Young-Sam as a reform political leader.

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He had to admit the wrongdoing of these individuals as the special committee of the National Assembly aired its investigation openly. Kim Young-Sam used television to give his apology to the Korean people. Was Kim Young-Sam corrupt as a politician? Corruption is often a loaded political concept. It is a value-impregnated notion because what is corruption to one individual or group may or may not be so regarded by other individuals or groups. Corruption is also culturally sensitive and culturally conditioned as a concept. Culture, and ideas of modernization and democratization, are all interconnected in defining what is meant by corruption. One could argue that Kim Young-Sam may have been corrupt politically but not personally. Without identifying the cultural context, an attempt to define "political corruption" becomes meaningless. From the Western cultural perspective of liberal democracy, Kim Young-Sam was responsible and should have been held accountable for corrupt acts of influence peddling by his close aide and his own son. Political scientists and philosophers emphasize the presence in politics or the state of the following situation as constituting corruption: efforts to secure wealth or power through illegal means-private gain at public expense (Lipset and Lenz, 2000: 112). As a reformer, Kim Young-Sam failed to do away with political corruption, so Kim Young-Sam as a political leader did not succeed in the end to bring about the full measure of democratic consolidation to Korea's Sixth Republic. The aim of the reformists was "reform all the way down" when the first wave of reform, an anticorruption campaign, was launched at the beginning of his administration. To put into effect the policy programs of successive reform measures, the politician Kim Young-Sam as a reformist tended to exaggerate the purity of his motives and desires. Yet, "reform halfway down" was what resulted in an end that closely reflected political reality. To begin with, reform is a political act. Unless Kim's reform had turned into a revolution, with the revolutionary zeal of the French Revolution of 1789 or the Russian Revolution of 1917, the reform movements led by Kim Young-Sam were bound to end up with less than a complete overhauling of the political landscape. Politics, especially practical politics, entails the art of the possible. Politics also deals with the questions of power and influence, which are, by definition, relative in value despite the absolute claims that are made on the grounds of attaining the higher standards of justice and righteousness. This was the tragedy of the reformist Kim Young-Sam, who began his presidency like a roaring lion but ended his tenure with a whimper, as a man downtrodden and brokenhearted. Toward the end of his term in office, Kim's popularity as president was close to the lowest approval rating, between 5 and 10 percent. In Kim's memoirs, published in early 2000, he demonstrates a high regard for his own historical significance by placing himself above all of his fellow politicians. None of the ROK presidents received a favorable appraisal. Kim was uniformly critical and negative toward his predecessors for their lack of

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what he called the "historical consciousness and awareness" that had delayed the democratic transition, with undue misfortune to the Korean people. 16 "Is culture destiny," as proclaimed by Lee Kuan Yew and Fareed Zakaria ( 1994), or "is democracy destiny," as countered by Kim Dae-Jung (1994b) and by other aspiring political leaders of the democracy movement elsewhere in Asia? This debate has not been resolved and will continue, as noted in Chapter 9, under the "Asian values" discourse. The issue has by no means been settled in the Korean context, as the preceding discussion of South Korea's tumultuous years involving the politics of democratization and democratic consolidation shows.

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Part2 Policy Patterns and Processes

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5 Responses to Globalization Sustaining Democracy Through Economic Reform

In the prosperous years preceding the crisis, a policy approach and support coalition developed. Then came crisis, challenging both policy and coalition. Crisis opened the system of relationships, making politics and policy more fluid. Finally, a resolution was reached, closing the system for a time, until the next crisis. 1

Peter Gourevitch, 1986 Globalization itself is neither good nor bad. It has the power to do enormous good, and to the countries of East Asia, who have embraced globalization under their own terms, at their own pace, it has been an enormous benefit, in spite of the setback of the I997 crisis. But in much of the world it has not brought comparable benefits. 2

Joseph Stiglitz, 2002 Winner of the 2001 Nobel Memorial Prize in Economic Sciences How has the South Korean state responded to globalization challenges since 1995? An answer to this question is the focus of this chapter, which offers a study of the policy responses by two South Korean governments, the Kim YoungSam administration (1993-1998) and the Kim Dae-Jung administration (19982003). Korea's new democracy has made serious attempts to cope with globalization impacts abroad and to evolve appropriate strategies for domestic economic adjustments and reforms. In the process of policy responses to globalization challenges, the Korean state has transformed itself, which will be examined in more detail in Chapter 6. In 1995, the Kim Young-Sam administration first enunciated a strategy of responding to globalization challenges, as already noted in Chapter 4. To overcome the havoc wrought by the Asian financial crisis of 1997-1998, the Kim Dae-Jung administration also promoted its own version of globalization policy, along with a robust reform agenda. In drawing a contrast between the two policy approaches to globalization, this chapter will explore the shortfalls of the first and the limited success of the other. The Korean responses to globalization 149

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represented an attempt by the new democracy to respond to the competitive pressures of world production and financing and international standards, and to legal norms of economic reform. The dynamics of globalization, resulting from a greater integration of the world economy based on capitalism, that engulfed most of the East Asian countries in the 1990s, has had both sanguine and disruptive effects on these countries (Haggard, 2000a; S. S. Kim, 2000a). The Asian financial crisis, which brought economic havoc to many East Asian economies, was the third largest economic collapse in the twentieth century, after the 1929 crash and the 1973 first oil shock. The 1997-1998 Asian financial crisis, from the U.S. point of view, involved four basic problems: (1) a shortage of foreign exchange, causing the value of currencies and equities in Thailand, Indonesia, South Korea, and other Asian countries to fall dramatically; (2) inadequately developed financial sectors and mechanisms for allocating capital in these troubled Asian economies; (3) effects of the crisis on the world economy; and (4) the role of the International Monetary Fund in rescuing these currencies and replenishing funds (Nanto, 1998). It began with the collapse of the Thai baht in July 1997, but spread to other Asian countries, including Indonesia and South Korea. It was the least anticipated financial crisis in years because traditional growth indicators, up to the eve of the crisis, had remained basically sound, as the region retained savings and investment levels reaching one-third of its gross domestic product (GDP) (Radelet and Sacks, 1998: 33). Ironically, East Asia had been heralded as a model of development, as the World Bank's 1993 publication The East Asian Miracle notes. Eight nations (Japan, Korea, Hong Kong, Singapore, Taiwan, Indonesia, Malaysia, and Thailand) grew faster than all the other nations of the world since 1960, nearly three times faster than the average of the world economy (World Bank, 1993). As a result of this Asian financial crisis of 1997-1998, the South Korean currency lost its value overnight and its economy and society were adversely affected. With the foreign currency reserves running dangerously low, the Kim Young-Sam government was compelled to tum to the International Monetary Fund (IMF) for financial bailout to back up the value of the Korean won. In exchange, the economy of the country was placed under IMF supervision for the next three and a half years. High inflation, business failure, and growing unemployment led to economic growth of -6.7 percent in 1998, down from 5.5 percent growth in 1997 (Kirk, 2000). One can argue that this financial crisis resulted partly from the failed policies of economic reform at home prior to the crisis and to varied styles and approaches by new democracies in Asia to the globalization pressures in the external milieu (Stiglitz, 2002). Sustaining political democracy through economic reform has been the basic policy choice and challenge faced by all new democracies, including Korea in the postauthoritarian era (Prezeworski eta!., 1995). The ways in which the economic reform measures were undertaken naturally varied among the various Asian counties and between the respective Korean administrations since 1988 (S.S. Kim,

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2000a, 2000b). The clashing styles and contrasting approaches were evident between the two South Korean governments on the eve of and following the 19971998 Asian economic crisis. For the Kim Young-Sam government, the IMF bailout of the economy was a culmination of the ill-fated and misdirected campaign to "catch up with the West" in a hurried way through the segyehwa (globalization) drive. For the Kim DaeJung government, the IMF bailout was a turning point and an opportunity for not only deepening democratization in politics, but also rebuilding the shattered economy into a more competitive and viable economy in the age of globalization. Its stated purpose was to build an information- and knowledge-intensive society for Korea. Since the establishment of capitalism preceded the transition to democracy, unlike some east European countries, the primary task of the economic reform of Korea's Sixth Republic boiled down to the question of how to affect market-oriented liberalization and restructure the economy. This chapter will explore different strategies for economic reform and criteria of their relative successes, focusing primarily on the economic policies pursued by the Kim Dae-Jung administration. An international political economy (IPE) perspective of globalization contends that globalization has political, economic, and social dimensions and consequences and, hence, one can think of globalization in these senses. Globalization was conceived primarily as an economic process, that is, the national economy going "global" or integrating itself with the capitalist world economy. The result could have a deleterious effect on the national.economy. Yet, one could also speak of political globalization, social globalization, and so on, as if they were separate, for analytical purposes (Held et al., 1999). From this perspective, the pressure of economic globalization leads the state to want to become more competitive through greater integration into the world market (Cerny, 1997, 2000). The analysis of how and why this occurs is what an IPE study of globalization is expected to address (Stubbs and Underhill, 2000). Both this chapter and Chapter 6 will explore the argument that the interaction between globalization and the nation-state has led to what might be called the "globalization-competitiveness paradox." Globalization can both undermine the domestic autonomy and political effectiveness of the state and lead to the actual expansion of de facto state intervention and regulation. Both of thes1 ~eemingly contradictory processes have been undertaken by modem states in the name of enhancing competitiveness and marketization of the national economy in the world economy (Cerny, 1997, 2000). The Korean response to globalization generates empirical data to test this hypothesis. Globalization Drive: Advanced-Nation Status or Disease?

The policy of the globalization response through the segyehwa drive was first enunciated by the Kim Young-Sam administration in 1995. The Kim Dae-Jung

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administration promoted its own version of globalization policy, along with a robust reform agenda, in order to overcome the challenges of the Asian financial crisis of 1997-1998. A comparison between the policy approaches to globalization of the two Kim administrations illustrates why the first came to grief and the other has been more successful. Unlike the preceding administrations of President Chun Doo-Hwan and President Roh Tae-Woo, which were both based on authoritarian political culture and tradition, the two Kim administrations were anchored in a firm belief in promoting the new institutional foundation for liberal democracy and open societies. What distinguished the two Kim administrations from the preceding governments was the fact that the Kims intended to go beyond a state-centric model of economic development, which was instituted by the Third and Fourth Republic administrations of President Park Chung-Hee, into a neoliberal market-oriented economic system. The intent was to strengthen the emerging democratic fabric of Korean civil society. How did each of the two Kim administrations react and respond to the impact of globalization and external influence in the world capitalist economy? Their responses can be assessed in each of the following areas: goal specification, strategy, policy instruments, and implementation. The Korean conception of globalization, as Barry K. Gills and Dong-Sook S. Gills argue, represented "the rise to globalism" (2000b ). Globalization for President Kim Young-Sam was a means to attain "advanced-nation status" in a hurry (81-104). To do so, the government pursued a policy of "reform by slogan," ascertaining rather than implementing the specific set of reform measures. These pitfalls were subsequently corrected by the time of the Kim Dae-Jung administration.

The Segyehwa Drive of Kim Young-Sam In his inauguration address, President Kim Young-Sam outlined a new policy initiative for economic reform, including "nonintervention in labor-management disputes."3 This was a significant departure from the previous government's role in industrial relations. The government policy goals in adopting this new policy were twofold: to reduce the rigidity of the labor market and to bring Korea's labor practices up to international norms as referenced in International Labor Organization (ILO) standards. This was to prepare for Korea's entry into the World Trade Organization (WTO) and Organization for Economic Cooperation and Development (OECD) and to be a mark of South Korea attaining advanced-nation status. Kim urgently hoped to achieve Korean economic ascendancy during his term in office. This is why the Kim Young-Sam government chose to undertake reform in industrial relations and to soften the ILO complaints about South Korea's record of less than full compliance with international labor standards. When Kim Young-Sam became president in 1993, after campaigning for sweep-

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ing political and economic reforms, many expected that his administration would continue the process of deregulating and liberalizing the economy. After a long internal debate within the bureaucracy between neoliberals and Keynesian-style economists, President Kim finally decided to reorganize the economic ministries in 1994 (Y. T. Kim, 1999: 451). He used the occasion of a trip abroad to launch a new policy vision of globalization that provided the rationale for subsequently carrying out the drastic economic reorganization measures of his administration. On his way back from the Asia Pacific Econ.omic Cooperation forum's founding meeting in Canberra, Australia, President Kim Young-Sam stopped over in Sydney on November 17, 1994, to announce what was called the Sydney Declaration as a trial balloon to his segyehwa policy. In December, he announced an important cabinet reshuffle and administrative reorganization, specifically intended to be "suited for the pursuit of globalization strategies." The Economic Planning Board and the Ministry of Finance, for instance, were merged into a new superagency called the Ministry of Finance and Economy. Other economic ministries were also streamlined, into the Ministry of Trade, Industry, and Energy. The government abandoned the five-year economic plans, which had been as central to the Korean economy since 1961 as free trade had been to many Western countries. In its place, the government announced a much longer-term economic and social development blueprint that would extend the planning horizon up to 2020, so as to avoid targeted macroeconomic management and long-term sectoral industrial policy. The Presidential Segyehwa Promotion Committee (PSPC) was formally established on December 27, by presidential order, and was launched on January 21, 1995. This commission was to be headed by the prime minister and composed of representatives from government ministries, academia, research institutes, and "socially eminent persons." The PSPC was then given a mandate to give shape and substance to Kim's new visions of globalization. More specifically, the PSPC was to work out policies and programs in six priority areas: education, legal and economic systems, political parties and the mass media, national and local administrations, the environment, and culture and consciousness. The relationship of these seemingly haphazard tasks and their integration into a coherent set, however, was left undefined at the time of the launching of the PSPC. President Kim delivered his first major domestic pronouncement on segyehwa on January 25, 1995, before members of the newly formed commission. In this speech, along with a subsequent one delivered on March 21, 1995, Kim outlined the meaning of globalization. He described globalization as a "global trend" and an era characterized by "a borderless global economy" in which "room for asserting national sovereignty in economic affairs is sharply diminishing." Rapid liberalization of capital, technology, goods, and service would flow across nations and usher in a period of "boundless global competition" (Segyehwa, 1995: 7-16). The Kim government was active in criticizing previous regimes for having been "so obse~sed with growth that they ignored the serious implications of the increasing ccmcentratioP of ~sonomic power in the hands of a few business tycoons, the wors-

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ening income distribution, and the intensifying strife among different regions and classes" (10, emphasis added). Addressing the Seventh Annual Corporate Conference in Seoul, sponsored by the Asia Society, President Kim said: Since my inauguration as President of Korea in 1993, I have taken up change and reform and segyehwa, or globalization, as the foremost goals of state affairs and have since pushed reform and opening up in all fields, including political, economic and social activities .... The segyehwa policy Korea is pursuing represents an effort to eliminate the inefficiency and malpractice stemming from protectionism and regulation and improve and upgrade institutional systems and practices to a world level. ... The ultimate objective is to make Korea a country people all over the world would like to visit, invest in and reside in .... In this sense, the segyehwa policy that Korea is pushing is not for the sake of the development of Korea alone, but also to help the development of the world as a whole. (1996, emphasis added) President Kim Young-Sam was preoccupied with the question of how to reach the designation of advanced-nation status in a hurry, without specifying the means to achieve the designation or laying out a detailed road map on which to travel. A presidential study group of the PSPC issued a series of commission reports. But the PSPC was set up after the fact, following Kim's pronouncement of a new policy on segyehwa, rather than being involved in the planning of policy and making recommendations. According to the PSPC report released in August 1995, segyehwa refers to both objective and subjective aspects of the same globalization dynamics: the changing conditions in the global village; a new paradigm (new cognitive framework) required by the changing global conditions; and a new vision and strategy needed in order to become an advanced, world-class country in the twenty-first century (Segyehwa, 1995: 1). For the Kim government, segyehwa reflected the growing recognition that with the birth of the WTO, South Korea could no longer rely on the policy and practice of state-led market protection and strategic intervention. There was a sense of urgency in which the rhetoric of segyehwa "can be viewed as a more open and market-conforming strategy for enhancing Korea's global competitiveness" (S.S. Kim, 2000b: 245).

The IMF Mandate and the Globalization Vision of Kim Dae-]ung Presidential candidate Kim Dae-Jung, faced with a likely financial meltdown in late 1997, quickly reversed his earlier stand against the IMF. On January 13, 1998, President-Elect Kim met with the heads of the country's four biggest chaebol (business conglomerates) and arrived at a five-point agreement regarding the restructuring of business operations, which they were expected to implement themselves. These included transparent business management, banning the cross-guarantee

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system, improvement of financial structures, defining core sectors and cooperation, and improving responsibility of majority shareholder and management. These measures were deemed in line with the mandate of the Korean government "to deal with the economic crisis under the guidelines of the IMF" and "to enhance its efficiency by downsizing agencies and slashing budgets .... We the business leaders who deal with production and employment take full responsibility for the current crisis and agree on [these] five points," as the statement notes (Kirk, 2000; Mo and Moon, 1999a: 156). In the eleventh hour, the National Assembly also acted to pass a package of financial reform bills on December 29, 1997, that established the independent Financial Supervisory Commission. The legislative aim was to put an "end to government-controlled financial resource allocation" and to restore foreign-investor confidence in the Korean economy by liberalizing foreign ownership in the Korean stock market and enforcing the independence of the Central Bank. During the presidential transition period, a number of important institutional changes and legal measures were also enacted. Special sessions of the National Assembly were called. The assembly successfully enacted the type of major financial reform bills that ironically the Kim Young-Sam administration was not able to legislate prior to the IMF bailout. These measures strengthened the powers of the Ministry of Finance and Economy and weakened the independence of the Central Bank. Included in the list of thirteen major reform bills was the establishment of a joint Emergency Economic Committee, a de facto economic cabinet in charge of all important economic decisions. That committee included the Financial Supervisory Commission, consisting of inspectors from the Ministry of Finance and Economy, the Office of Bank Supervision under the Bank of Korea, the Securities Supervisory Board, the Insurance Supervisory Board, and the Credit Management Fund Agency (Kirk, 2000: 19; Mo and Moon, 1999b: 155). This supraministerial institution was able to stave off bureaucratic resistance to the IMP-mandated reforms and the reform agenda of the president-elect during the transition of power. The transition team of President-Elect Kim Dae-Jung came up with a list of 100 reform measures that were wide ranging, including those relating to finance, economic reform, and foreign trade as well as educational reform, welfare reforms, and foreign relations. In the meantime, a letter of intent spelling out South Korea's commitment to economic reform was dispatched to Michel Condessus, the IMF managing director, dated December 24, 1997, and signed by Lee Kyung-shik, the governor of the Bank of Korea, and Lim Chang-Yuel, the finance minister. This letter was drafted to accompany an IMP-announced action to speed up disbursement of financial aid to South Korea through a $2 billion loan to be made available immediately by December 30, 1997 (Kirk, 2000: 15-40). The eight-point reform agenda of the Korean economy, in response to the IMF condition for an economic bailout plan totaling $57 billion, was wide ranging and included monetary policy, capital market opening, financial sec-

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tor restructuring, reserve management and exchange rate policy, trade policy, labor market policies, fiscal policy, and data publication. Under the monetary policy reform, for instance, the government promised to restore order in the foreign exchange market and provide appropriate incentives for holding won-denominated assets, with interest rates to be raised substantially, reaching about 30 percent by December 24, 1997. Under the capital market opening, the Korean government promised to lift all capital account restrictions on foreign investors' access to the government, corporate, and special bond markets as of January 1, 1998, and to accelerate the announced schedule for liberalizing equity inflows. Under trade policy reform, the Korean government promised to accelerate measures to open the economy to imports and to eliminate trade-related subsidies in order to increase competition and efficiency in the domestic economy. It also pledged to facilitate the necessary movement of workers from declining firms to other employment possibilities and to publish periodically data on total external debt and its relevant components (Kirk, 2000; Mo and Moon, 1999b). Following his inauguration on February 25, 1998, Kim Dae-Jung and his administration enunciated four main targeted areas of reform-financial, corporate, labor, and the public sector-and planned a set of specific reform measures for each area. The details will be explored in Chapter 6. Kim placed economic recovery and reform as the top-most items in his policy agenda. Development of democracy and a market economy were set as parallel objectives for his administration. President Kim's reform policy and agenda were mandated by the Asian financial crisis and IMF support of the Korean currency through its largest rescue package of $57 billion to South Korea. The breakdown of the pledge was $20 billion by the IMF, $15 billion by World Bank and Asia Development Bank, $20 billion by Japan and the United States, and $2 billion by other sources. Globalization for President Kim Dae-Jung involved putting into effect a series of economic structural reforms as he strove to create a world-class Korea with future visions and strategies for the new millennium. In his inaugural address, President Kim Dae-Jung embraced the basic concept of globalization. As he ·stated, "the information revolution is transforming the age of many national economies into an age of one world economy ... turning the world into a global village" (D.J. Kim, 1998c: 1). Nine months later, in November 1998, the president described "universal globalism" as resting on such values as "freedom, human rights, justice, peace, and efficiency." Informatization, according to Kim, was "the most decisive change in the transition from the era of nationalism to an era of universal globalization .... In an era of informatization and a borderless global economy, the culture industry, which encompasses movies, databases, and computer games, has become one of the world's most fundamental industries" (D.J. Kim, 1998b: 1). For the purpose of promoting the globalization agenda, the Kim administration appointed the Presidential Commission on Policy Planning to make recommenda-

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tions on important matters involving mid- and long-term development goals and strategies. The commission made a series of reports to the president, including the one on "Building a World-Class Korea: Visions and Strategy for the New Millennium" in January 2000 (Presidential Commission on Policy Planning [PCPP], 2000). The key catalysts behind changes in the new millennium would include, according to the commission report, "globalization, informatization, and democratization; globalization will emerge as a predominant force that serves to integrate the world, which has heretofore been separated by national boundaries." The report continues, "The competitiveness of nations will depend on their ability to create global actors who can succeed in an integrated world economy and to establish comprehensive networks with other countries." In this process, "knowledge and information will be among the most significant factors that [will] determine national competitiveness, lifestyles, and ways of thinking in the twenty-first century" (PCPP, 2000: 1-200) for which Korea must be fully prepared. In these statements, one can see patterns of cognition and perception similar to those addressed by the PSPC in 1995 (Segyehwa, 1995). Effects of the 1997-1998 Asian Financial Crisis

On the eve of the crisis, South Korea had attained a per capita income of nearly $10,000, starting from a low base of $200 per annum thirty-five years earlier. 4 By the mid-1990s, South Korea was the world's fifth largest manufacturer of automobiles, the largest producer of DRAM microchips, and home of the world's most efficient steel industry. Its seasonally adjusted unemployment rate of 2.1 percent on the eve of the crisis was also the lowest in the country's history, while the current account deficit hovered at 3 percent of the GDP, which was lower than many other Asian countries. South Korea's rise from an agricultural to a modern industrial economy within one generation and the dynamics of its economic development received high marks internationally, although structural problems and imbalances of the economy were noted by expe1ts as a matter of policy concern by the mid-1990s (Song, 1994; Cho, 1994). Despite the strength of the economy, South Korea did not escape the denouement of the Asian financial crisis. In the fall of 1997, there was a drastic change in Korea's economic picture, turning sharply from economic growth to financial crisis. After a series of major corporate bankruptcies, such as the Hanbo Steel collapse, and currency crises in Thailand and Indonesia, South Korea's foreign exchange reserves dropped dangerously low, prompting a full-scale financial crisis and the necessity of massive external infusion of funds. This financial failure, partly resulting from government inaction until it was too late, revealed deep structural problems in the banking and corporate sectors of the economy. The main reason for the Korean economic crisis in the IMF era may be found not so much in the external as in the internal factor of the failure to reform the corporate and financial sectors of the economy in a timely fashion.

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An analysis of the roots of crisis, in Korea and in other Asian countries, leads to the conclusion that mismanagement of the country's monetary and fiscal policy was the major cause of the economic crisis. In the case of Korea, excessive investment, which was substantially larger than domestic saving, resulted in ballooning foreign debt and a foreign exchange crisis (D. Lee, 2000: 33-34). The most serious reason involved structural flaws in the economy, including a high reliance on external private capital, a poorly developed banking system (with an opaque regulatory apparatus), cronyism in the financial sector, and a lack of transparency in the workings of financial institutions (Dittmer, 2000: 34). The region's export boom, first unleashed in the mid-1980s, was fueled by the depreciation of the U.S. dollar relative to the Japanese yen after the Plaza Accord of 1985. This made Korean exports more competitive than those of the Japanese. The chaebol took advantage of massive subsidized "political" loans to engage in highly leveraged overinvestment in productive capacity. Some of these led to business failures. In January 1997, Hanbo Steel declared bankruptcy as already noted in Chapter 4, which was the first bankruptcy of a leading Korean conglomerate in a decade. This was followed in March 1997 by the failure of Sammi Steel and by the difficulty of Kia, Korea's third largest automaker (Kirk, 2000: 3-7). As the economy in 1997 failed to recover due to many business conglomerates filing bankruptcy, the Korean financial institutions that had extended the loans began to face a financial crisis. By the end of September, insolvent debts in banks rose to a record high of 28.5 trillion won (about $32 billion), or 6.3 percent of their total credits given to business. Merchant banks especially suffered from bad debts of 3.9 trillion won by October 1997. Accordingly, banks and merchant banks were forced to halt, giving additional loans that, in tum, increased corporate bankruptcies. It is only natural that the mounting irretrievable debt and a vicious cycle of corporate failures worried the foreign financial institutions that had also provided loans to Korean business. Korea's international credit rating rapidly plunged, as Moody's Investor's Service lowered the credit rating and status of Korea from A1 in October to B-1 in December. Korea's foreign debt was mainly short term, with maturity of less than one year. By the end of 1996, $157.5 billion in total foreign loans were owed by Korea, of which $100 billion or 63.5 percent was short term (Korea Annual1998, 1998: 63). Most of these foreign debts were owed by either established banks or merchant banks, not by conglomerates. There had not been many problems regarding the short-term credit because maturity was automatically rolled over at the scheduled time. In early 1997, however, the situation began to change with the deterioration of the structure of financial institutions, due to the rush of corporate bankruptcies. Foreign creditors became irritated and demanded repayment of short-term liabilities, and they were also not satisfied with the Korean government's lukewarm countermeasures. What aggravated the situation was the plunge of the Hong Kong stock market, which led to foreign investors withdrawing their money from the Korean stock

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market at once. This created an unstable foreign exchange market because the Bank of Korea hastily interfered, only to exhaust foreign exchange reserves. The IMF became the last resort to rescue the Korean currency. The Kim Young-Sam administration struck a deal with the IMF on December 3, 1997. As part of the IMF's bailout request on November 21, the Korean government submitted to the IMF a memorandum for an economic program, in which it promised to open its market wider and carry out the program of economic restructuring. The terms of the agreement, signed on December 4 but with additional provisions on December 24, stipulated that a rescue package of $58.3 billion, the largest in its history, would be made available to Korea: $35 billion from international financial institutions, such as the IMF, the International Bank for Reconstruction and Development (World Bank), and Asia Development Bank, and the remaining $23.3 billion from advanced nations like the United States and Japan. The agreement stipulated far-reaching reforms in the financial sector, accelerated liberalization of trade and investment, and called for radical corporate restructuring measures. The conditions for financial aid included Korea's economic growth rate for 1998 was to be lowered to 3 percent, inflation was to be maintained at a 5 percent level, and the current account deficit was to be kept at less than $4.3 billion, or 1 percent of the gross national product (GNP). The IMF rescue package initially entailed sharp budget cuts, as well as higher interest rates and taxation, thereby reducing overall rates of economic growth. As a result of these deflationary austerity measures, the Korean economy suffered an unemployment crisis and a deepened recession (Kjrk, 2000: 32). For financial reform, a new law was to be enacted prior to the end of 1997 to ensure independence of the Bank of Korea as the central bank. A unified financial supervisory committee was also to be established, in order to effectively address the problems of near-insolvent financial institutions. A tight-money policy was implemented to eliminate uncertainty in the financial market. A temporary rise in the currency exchange rates was allowed through a flexible exchange system. The foreign exchange rate shot up from the 800 won level to a 1,012 won level per U.S. dollar on November 10. It continued to rise to reach the level of 900 won on August 25, and to 2,000 won in 1998, before coming down to the level of 1,300 won. The ceiling for buying stocks by foreigners was to be expanded to 50 percent in 1997 and further to be opened to 55 percent in 1999. Foreign financial institutions were to be permitted to establish subsidiaries in Korea by the middle of 1998. To raise transparency of corporate finances, enterprises would have to introduce international accounting standards and consolidate financial statements. The agreement also stipulated taking measures to strengthen the employment insurance system and to promote the redeployment of manpower in a bid to heighten the flexibility of the lab or market. The Korean government finally agreed to scrap in stages its trade-related subsidies, to discard the import market diversification system, and to completely open the bond market by December 1997.

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As previously noted, presidential candidate Kim Dae-Jung met with four of the top five chaebol magnates to formally agree on a sweeping corporate restructuring program. These included the promises of creating transparency in corporate management and ending mutual debt guarantees among chaebol subsidiaries and an unhealthy financial structure. Under this corporate restructuring agreement (with Hyundai, Samsung, Daewoo, SK, and LG), the chaebol magnates were expected to stop their reckless expansion and sell off marginal and unprofitable businesses and subsidiaries. The implementation of this agreement proved to be difficult, however. As many as ten of the top thirty chaebol became bankrupt after 1997, and Daewoo, which at one time was listed as the number two chaebol in Korea, nearly went bankrupt. During its economic recovery, South Korea attempted to combine policy instruments of economic reforms with such positive Asian values as high savings and investment ratios. The prudent fiscal policy also included measures of reliance on competent technocrats, well-trained and hardworking laborers, and the unusually high educational level of employees, for which South Korea is best known. At least three lessons for the future could be drawn from the experience of the Korean economic crisis, according to Lee Doowon (2000). First, to maintain macroeconomic stability, monetary and fiscal policy must be managed properly to avoid excessive trade and fiscal deficits. Second, a proper supervisory mechanism over financial institutions must be established and maintained by the government. Finally, to address the structural imbalance of the Korean economy, the efforts to reform Korea's financial and corporate sectors must continue for many years to come (34). Before the 1997-1998 Asian financial crisis, the Korean state was primarily geared toward neomercantilist policies and practices in foreign economic policy despite its adherence to the rhetoric of pursuing a reform agenda and opening for greater markets in trade and finance. This was due to increasing external pressures from world political and economic forces. The dominant form of the state was a developmental state patterned after the post-World War II Japanese model of economic development, which the Kim Young-Sam administration had inherited from the previous administrations of Presidents Roh Tae-Woo, Chun Doo-Hwan, and Park Chung-Hee (Johnson, 1995; C. Kang, 2000: 76-101). Unfortunately, the Kim administration failed to anticipate the financial problems inherent in this economic system or take precautionary measures by enacting the reform legislation to strengthen the competitiveness of the Korean economy. The South Korean state during the IMF era faced greater external pressures to change from a state-centered to a market-oriented neoliberal state. This was precisely the kind of new democracy the Kim Dae-Jung administration set out to pursue as a policy goal after 1998. The intent was to make the South Korean economy and state more competitive in the world marketplace. In this process of reform and adjustment, however, the South Korean state acquired a greater capacity to initiate new policies and programs, as manifest in the attempt to mediate the social conflict between big business and organized labor and to revive economic health by confronting global pressures.

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In short, globalization had both positive and negative effects on the Korean economy, for which the country was ill prepared. We turn next to a discussion of the nature of the challenges and opportunities presented by globalization. Korea's new democracy was hard pressed to respond to these challenges on the eve of the 1997-1998 Asian financial crisis.

Is Globalization a Threat or an Opportunity? The idea of globalization generated both negative and positive connotations. Those whose job was threatened by the government attempt to enforce the structural reform of the economy, in the name of adjusting to the external pressures of globalization, perceived globalization with hostility, even fear. They believed that globalization would increase inequality within and between states. Globalization, to the workers, threatened employment and seemed to thwart social harmony. It seemed to threaten progress already made by adversely affecting their living standards and livelihood. However, those in government who wanted to carry out the structural reform of the economy, to make the national economy more competitive in the global political economy, viewed globalization as a process that could be beneficial. Globalization, to them, was a key to the future success of Korea's economic development. Many also considered globalization an inevitable and irreversible force, to which the country had to respond sooner rather than later. For South Korea, globalization meant, first and foremost, its willingness to confront the reality of the changing world. Globalization was about the intensification of political, economic, social, and cultural relations of peoples across national borders (Holm and Sorensen, 1995: 1). Globalization was also the consequence of modernization, where interactive social relations of localities within the nation deepened and expanded globally so that what happened in one locale influenced, and was impacted by, what happened in other localities (Giddens, 1990: 64). Global and globalism, as a spatial concept, thus implied looking at the problems of the globe in a holistic and total way. Globalism and globalization, as noted in Chapter 1, were the products of specific historical conditions in the last three decades of the twentieth century. As such, globalization came to be accepted as a reigning ideology. 5 Globalism is part of the deepening and thickening process of economic interdependence that generates both sensitivity and vulnerability as well as costs and benefits. Globalism is a function of the shrinking distance and instantaneous communication arising from progress in the communication and information revolutions. The forces and policies of globalism that sustained the complex of these tendencies became regarded as inevitable (the popular myth that "there was no alternative" to globalization). Globalization emerged first in the advanced capitalist societies and "with the knowledge, prestige, and resources present in these societies they were disseminated as objective truth among these societies' subordinated classes and to peoples in the rest of the world" (Cox, 1996: 24).

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In classic economic theory, the academic subject of international economy is concerned with the exchange and movements in trade, investments, and payments crossing national frontiers that are regulated by states and by international organizations created by states. In a globalized world economy, however, production and finance are being reorganized in cross-border networks that could very well escape national and international regulatory powers. This pressure on the state and state system has led to a new dilemma: reconciling the dynamics of a globalized world economy with the political inertia associated with defending state sovereignty (Panich, 1996: 83-115). Globalization of the world economy has acquired its own dynamics, "in which capital, production, management, labor, information, and technology are organized across national boundaries" (Castells, 1993: 18). Globalization has left lasting imprints on domestic society. The developed capitalist economies were buoyed by advances in technology in production and communication to accelerate a restructuring of production away from mass production of standardized goods toward less energy- and labor-intensive methods and more capital- and knowledge-intensive ones. The mode of assembly-line production came under attack. The new strategies, instead, emphasized weakening trade union power, cutting state budgets, pushing for more privatization, establishing more deregulation policies, and giving priority to international competitiveness (Cox, 1987). These tendencies had a far-reaching impact on different parts of the world that resulted in the migratory movements of populations, with job losses in the mass-production industries of richer countries and displacement of peasant agriculture in poor countries. Globalization as the product of these interacting and mutually reinforcing tendencies is, according to Robert W. Cox, "the complex of forces, born of the crisis of the mid-1970s, that reversed the different complex of forces that had become consolidated during the three decades following World War II" (1996: 23). Initially, the Korean governments took the position that globalization presented itself as both a threat and an opportunity. The government elites reasoned that South Korea as an emerging economy had no alternative but to adjust and adapt to the changing times, so as to survive and even thrive by taking a positive action and an accommodation to the pressures that emanated from the globalized market. In this way, the Korean government would agree with, and accept, the IMF official view that globalization offered extensive opportunities for worldwide development, even if it was not progressing evenly (International Monetary Fund [IMF], 2000). The crises in the emerging markets in the 1990s, such as South Korea during the 1997-1998 Asian financial crisis, made it quite clear and evident that the opportunities for globalization did not come without risks. These risks had to do more with those arising from volatile capital movements, they reasoned, than from the risks of social, economic, and environmental degradation that might foster and be created by poverty. The successive Republic of Korea (ROK) governments would acknowledge the risks and costs arising from confronting globalization, but would

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not recoil from the path toward globalization or reverse direction. Most Koreans agreed at the time of inaugurating the Kim Dae-Jung administration that the IMF restrictions on the Korean economy were justifiable because it would press all concerned (the government and investors) "to embrace policy changes to build strong economies and a financial system that [would] produce more rapid growth and ensure that poverty [be] reduced" (IMF, 2000: 2). The way that the Kim administration acted to implement the IMF-imposed reform on the economy, as it will be noted in Chapter 6, shows that Korea's Sixth Republic took globalization challenges as an opportunity rather than as a threat. The Kim administration wanted to pursue the policy of enhancing both political democracy and economic prosperity through promoting a globalization agenda, rather than withdrawing from the external world market outside the country. The Kim government opted to restructure the ruined economy, rather than bowing to external pressures and offering passive acquiescence to externally induced changes. Negotiating Globalization Impacts: Clashing Styles and Approaches Confronted with the challenge of globalization in a world economy, the state's power has been in decline, or experiencing what Susan Strange (1996) calls the "retreat of the state." One of the first to make this argument was Kenichi Ohmae in his book The Borderless World (1990). The power of the state, according to this argument, is being undermined by an array of factors associated with globalization. These included the rapid mobility of capital and the increasing integration of capital markets, the rising power of major multinational corporations, the growing revolution in communications, and the expanding authority of international organizations. It is more accurate to say, however, that the state is not only being eroded, but also fundamentally transformed within a wider structural context. As Philip Cerny notes, "in both modem domestic political systems and the modem international system, the state has been the key structural arena within which collective action has been situated and undertaken, as well as exercising structural and relational power as an actor in its own right" (1995: 595). Hagen Koo (1993a) describes the authoritarian political climate from the 1960s to the 1980s in South Korea as the "strong state and contentious civil society" that was ideal for rapid economic development and modernization. However, in the post-Cold War era where the dynamics of globalization emerged as a driving force, South Korean society has been activated by the democratization of finance, economy, and politics. A new and altered model of "the weak state and harmonious society," rather than "the strong state and contentious society," may be in the offing in the new millennium of the twenty-first century (1993a: 231-249; Armstrong, 2002). In negotiating the globalization impacts on the economy, the Korean state under each administration had varied in its approaches to prioritization and sequenc-

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ing of the structural reform of the economy. The "strategic plan and choices," according to Gills and Gills (2000b ), would entail "prioritization" of policy goals and goal-setting by political decision-making. The Kim Young-Sam administration followed an uncharted path of confronting domestic political opposition, within and outside parliament, so as to meet the externally generated pressures of globalization in the world marketplace. The government was expected to institute liberalization reform measures of the economy, while pacifying the opposition by big business and labor to the government policy on structural reform. Its approaches to dealing with the impacts of globalization both with the opposition forces within and outside the National Assembly were what might be called "reforming via coercive measures," to be noted below. In contrast, the Kim Dae-Jung administration learned from its predecessor administration how to avoid the costly mistakes of "strategic planning and choices" on matters of prioritization and sequence of key policy reforms. The Kim approach and style could be characterized as more deliberately oriented toward consensus-building endeavors among big business, labor, and the government, to be called "reforming via forged mandates." The contrast in approach between these two administrations warrants further analysis. Reforming via Coercive Measures? At the outset of his five-year term, Kim Young-Sam made some effort to carry out structural reforms that were long overdue to eliminate government-business collusion and to keep the economy and government "clean." These included the measures requiring use of "real names" in all financial transactions and requiring high-ranking public officials to make public their financial assets, including real estate. On the issue of strategic choice over the sequentialization of reforms, however, the Kim administration made a crucial error. A strategic choice as a matter of prioritization of policy goals entailed the sequence and speed of key reforms, especially "on reconciling globalization with the need for economic and political reforms;' according to Gills and Gills. Kim's segyehwa policy was promoted without breaking the close ties and collusion of "the government-big business-banking triad" (2000a: 29-53). Kim's segyehwa policy failed in restoring mutual confidence and in building working relationships in the area of "the government-big business-labor triad." It is true that the Kim administration set the policy goals and targets for a host of ambitious reform agenda items. These included economic reform to meet such global standards as ensuring transparency in all transactions, fair competition, deregulation of the financial sector, and a fairer tax system. It also included industrial relations reform, expansion of the social security system, administrative reform, and political reform toward a more open, competitive system. The substance of segyehwa reform was quite limited, however, because it

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was primarily oriented toward "an appeal for greater self-help and private sector involvement" with a reduced dependency on the state (Gills and Gills, 2000a: 39). The promised extension of the social insurance and welfare system consisted of a modest expansion of coverage for the indigent, while reform of the social security system, for instance, took the form of computerization and appeals to business to become more involved in employee welfare, primarily on a workfare basis (39). There were other difficulties and irregularities associated with the Kim administration's promotion of the globalization agenda in regard to industrial relations. In the post-1987 era, Korean society had to cope with the issue of a proper role for organized labor and its participation in the political process. The Kim administration had to address long-standing union grievances against restrictive elements in the existing law. This consisted of the four major points of contention: the prohibition on plural unionism, third-party intervention, public-sector unions, and union participation in party politics. While organized labor attempted to gain political and social acceptance as a legitimate social partner of government and business, the chaebol had also demanded new powers to discipline labor and make the rules of the labor market more flexible (Gills and Gills, 2000b: 91). On May 9, 1996, the Kim government established the Presidential Commission on Industrial Relations (PCIR) that included representatives from both big business and the major national trade union federations. The labor movement, represented by the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU), called for establishing the pro-labor rules on plural unionism, legalization of union political activity, third-party intervention, and recognition of public unions. Big business was represented by the Korean Confederation of Employers, which insisted on maintaining the prohibition on plural unions and union political activity and calling for the right to replace striking workers and to abolish severance payments on redundancy. The government's primary concern was to develop a compromise stance that would reconcile the diverse interests of business and labor. The sequence of the reform and the timing was not right, in retrospect, because the emphasis in Kim's segyehwa policy led to the government attempting to bring about economic growth first and "flexibilization" of labor second. This process of mediation on industrial relations was not successful. The KCTU withdrew from the PCIR, claiming that it was biased in favor of the interests of business. In fact, organized labor charged that there was a new reconfiguration of the government-chaebol alliance in the making. As a result, a new phase of industrial relations ensued, with an escalation of conflict between business and labor. In a desperate move, the ruling party in the National Assembly relied on strongarmed tactics so as to pass the pending bills, in the absence of opposition party members in the early hours of the morning of December 26, 1996. The bill on new industrial relations was passed along with ten others in seven minutes. This improper approach to legislation in the National Assembly led to both the public's

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and labor's condemnation of a "new authoritarianism." The KCTU responded by declaring a national strike and successfully garnered public sympathy during the ensuing two-month period of national strikes. When the FKTU joined the strike actions, the government was forced to reopen debate on the labor law (Koo, 2001: 199-201). A special session of the National Assembly convened in February and enacted the new labor law on March 10, 1997. But the damage had already been done to the working relationship between the government and organized labor, a relationship essential for carrying out the reform and restructuring of the corporate sector. The new labor law compromise was finally pushed through the National Assembly. This made concessions to both business and labor demands. The new law increased the flexibility of the labor market by allowing redundancy dismissals and replacement of the striking workers. In return, labor won a two-year moratorium in the redundancy dismissals, approval for labor union financial support of full-time union officers, and the removal of the prohibition on political activities by unions (except in cases in which the main purpose was to promote a political movement) (Gills and Gills, 2000b: 92; Koo, 2001: 200-201). This compromise, unfortunately, did not survive the national economic ordeal of the Asian financial crisis in late 1997. The Kim administration initially planned to reform the corporate sector of the chaebol by demanding the separation of ownership and management and the industrial specialization of the chaebol groups. This populist antichaebol campaign of the Kim government, however, did not succeed. In December 1995, President Kim abandoned his much publicized promise to curb the chaebol in the name of enhancing the competitiveness of the Korean economy in the age of globalization. Kim had to expose the use of bribery by thirty-five chaebol leaders, including Samsung's Lee Kun-Hee and Daewoo's Kim Woo-Chung, who had given a total of more than $1 billion to former presidents Chun Doo-Hwan and Roh Tae-Woo. But only three of the thirty-five chaebolleaders-Daewoo, Dong-Ah, and Jinloreceived suspended sentences and fines, and the others were given a verdict of "not guilty" (Y. T. Kim, 1999: 452). The reason given was that the imprisonment of leading businessmen, according to Kim's attorney-general, could endanger the economy and jeopardize Korea's position in overseas markets (Dong-Ah Ilbo, December 17, 1996).

Reforming via Forged Mandates? The Kim Dae-Jung government used the strategic window of opportunity presented by the IMF crisis to tighten constraints on the chaebol and revive the economy via drastic restructuring. Initially, Kim Dae-Jung, as a presidential candidate, campaigned against the IMF intervention in the Korean economy in the midst of the 1997-1998 Asian financial crisis. Once elected, however, Kim reversed his position. President-Elect Kim was determined to overhaul "the government-big

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business-banking triad" by carrying out steady enforcement, including a fourtiered economic reform policy: financial reform, corporate reform, labor reform, and public-sector reforms (Republic of Korea [ROK], Ministry of Finance and Economy [MFE], 2000: 9). The Kim government emphasized the necessity of making "a decisive break with the previous state-led development model," since "in the age of globalization, mercantilist notions based on the idea of an independent national economy have no place" (ROK, MFE, 1999: 5-6). His government wanted to reconfigure the state-capital alliance by aggressively emphasizing deconcentration measures aimed at breaking the chaebol's stronghold on the national economic structure. This took the form of a new experiment, seeking not only to expand the social safety net and welfare system, but also to incorporate organized labor into the state's decision-making process. This involved economic restructuring via the tripartite commission with labor, business, and government as its members. In carrying out his program of economic reform, the Kim government was helped by the presence of the IMF, which acted as an external source of influence on the restructuring of the Korean economy. A new trilateral commission called No-Sa-Jong Wiwonhoe (Labor-BusinessGovernment Commission) was launched on January 15, 1998. This body reflected a "corporatism approach" to labor disputes based on the idea of equal representation of organized labor, big business, and government (Gills and Gills, 2000b: 92-95; Koo, 2001: 202). Three main issues came up during its first meeting: recognition of union rights, redundancy dismissals (as business demanded), and "fair burden sharing." Based on the principle of fair burden sharing, the cost of economic adjustments would be borne by both business and labor. Whereas the chaebol would be held responsible for overall economic difficulties and duly punished for their mistakes, labor was to relinquish the moratorium on dismissals previously achieved under the Kim Young-Sam government following the 1997-1998 national strike. The government, in turn, was expected to undertake substantial economic and social reforms. This agreement, often called the "social compromise," was made possible because of the prevailing sense of urgency of the financial crisis. However, as economic conditions improved somewhat in the ensuing months, the operation ofthis commission began to encounter difficulties in implementing the social compromise. In June 1998 when the second round of talks was held, the sense of common sentiment dissipated and the immediacy of the foreign exchange crisis subsided. Growing unemployment made labor restless, charging that both business and the government were not living up to the agreement on sharing the burden. The KCTU became more militant, calling for strikes, while the companies demanded greater autonomy in dealing with internal industrial disputes and punishment of illegal strikes. The government took the position that its role was limited to mediation and it could not enforce a solution, while threatening at the same time to deal severely with illegal strike actions as well as with "unfair business prac-

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tices" by corporate managers. In a "Statement on IMF and Kim," on February 22, 1999, the KCTU expressed its disapproval of President Kim's position on the job security issue. It was aired during the Dialogue with the Nation program on television a few days earlier. The KCTU claimed that Kim's "consciousness on the current situation was too naive," especially on the "redundancy dismissal" (dismissal of redundant jobs) that Kim said had to be implemented according to the related law. Organized labor withdrew from the tripartite commission in February 1999, presenting the government with a list of demands for stopping the industrial restructuring and redundancies and calling for shortening the working hours and establishing a social safety net. 6 Under the plan of the sweeping corporate restructuring program, each of the five chaebol magnates (Hyundai, Samsung, Daewoo, SK, and LG) was required to stop its reckless expansion and sell off marginal and unprofitable businesses and subsidiaries. Part of the restructuring plan involved the so-called big deals entailing a "swap" among the chaebol in order to rationalize their business activities. Seven major industrial sectors affected by these "big deals" included petrochemicals, aircraft, rolling stock, power generation, ship engines, semiconductors, and oil refining. The Fair Trade Commission was in charge of monitoring the swaps to prevent delays in restructuring the chaebol. This commission sought to monitor and prevent abuses of chaebol intragroup transactions, such as allowing the business conglomerates to shift resources from core companies to weak subsidiaries. In early 1998, Korea opened its capital and real estate markets to foreign investment and allowed mergers and even hostile takeovers by foreign firms, including the financial sector. The successful renegotiation ofthe short-term domestic banking debt of $21.8 billion into long-term government-guaranteed loans in April 1998, for instance, contributed to stabilizing the financial situation by the end of May 1998. The exchange rate became fully determined by the market, thereby using the acute short-term financial crisis to bring about a radical deepening of economic liberalization (Gills and Gills, 2000b: 88). A new Foreign Investment Promotion Act was enacted on November 17, 1998. This provided unprecedented incentives to foreign investors. These were designed to encourage foreign participation in the government's ambitious ongoing privatization program as well as in private corporate restructuring. The Regulatory Reform Commission was also established, cutting the number of economic regulations on the statute books by as much as half. Through this and other regulatory strictures, an effort was made to improve the corporate governance system in Korea, to lessen the influence of majority shareholders, to bring outside directors into corporate boards, and to increase transparency in accounting methods (Gills and Gills, 2000b: 89). The free-market philosophy and vision of the Kim Dae-Jung administration was put into effect in order to make Korea a more competitive economy. Market

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reform, including the infusion offoreign capital, was combined with the structural reform of business, including the chaebol. These measures of reducing structural distortions were necessary for enhancing the competitiveness of the Korean economy. The continued chaebol resistance to the pressure for reform as well as the labor resistance to reform, however, presented a formidable challenge to the Kim government's reform agenda. The economic crisis exacerbated the underlying tensions in labor's relations with both business and government. Unemployment rose to over 8 percent at the peak of the crisis, and the per capita GNP dropped sharply from $10,543 in 1996 to $6,750 in 1998. The new government of President Kim Dae-Jung had few options but to take emergency measures to relieve distress from unemployment and to restore the financial viability of the Korean currency. These emergency situations led the Kim administration to take a series of forceful actions amounting to structural reform of the Korean economy in 1998-1999. 7 The free-market philosophy and vision of a competitive economy embraced by the government of Kim Dae-Jung was not really different in theory from that of the previous government of Kim Young-Sam. Market forces, including foreign capital, were not sufficient to ensure competitiveness and reduce structural distortions in the economy. However, while the Kim Young-Sam government was unable to implement effective corporate deconcentration measures, the Kim Dae-Jung government seemed to have both the opportunity and the will to pursue this goal with vigor. Still, corporate restructuring remained incomplete because of chaebol resistance and the reality that economic liberalization was easier said than done (PCPP, 2000: 88). In December 1999, President Kim pressed the chaebol magnates to implement corporate structuring based on the five-point compact that he had worked out two years earlier with the five largest chaebol leaders, while he was still president-elect. Unlike previous administrations, the Kim government regarded foreign investment as necessary for long-term financial stabilization. In the past, governments relied heavily on loans rather than on foreign investment to stimulate the economy. In theory, by shifting from foreign debt to foreign investment, South Korea should have been able to reduce its vulnerability to external shocks, as occurred during the 1997-1998 Asian financial crisis. Foreign investment would also have eased the pressures of debt servicing, lowering the domestic interest rate and the exchange rate, stimulating new corporate governance norms, and attracting new technology. The financial crisis of 1997-1998 was exacerbated by an acute short-term credit crunch. Mobile capital (especially short term) fled from Korea, and there were speculative attacks on the value of the Korean currency, the won. Foreign direct investment was expected to alleviate this type of credit crunch. In the area of financial liberalization, the Kim administration regarded foreign investment as neces-

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sary for long-term financial stabilization. In carrying out this and other agreements regarding structural reform of the economy, President Kim's reform involved economic globalization as well as political globalization. His aim was to make Korea a competitive state. This necessitated a new developmental model suited for the new economy in the new millennium. Globalization and Democratization in the Two Administrations

The situation facing the Kim Dae-Jung administration in 1998 was quite different from that facing the Kim Young-Sam administration, which had failed to obtain a legislative solution to structural reform of the Korean economy. Despite the majority stance of the ruling New Korea Party (NKP) in the National Assembly, the Kim Young-Sam administration failed to enact economic reform measures to forestall the onrush of globalization pressures on the eve of the 1997-1998 Asian financial crisis. In 1998, the ruling National Congress for New Politics (NCNP) of President Kim was a minority party in parliament to begin with. It was able to increase its position over the main opposition Grand National Party (GNP) only by forming a ruling coalition with the United Liberal Democrats (ULD) and by persuading several opposition and Independent members of parliament to join the ruling camp. The GNP was a new name for the NKP of former President Kim Young-Sam, which was now placed under the leadership of Lee Hoi-chang, timed with the 1997 presidential election campaign. At the time of introducing the major reform bills to theN ational Assembly in 1998, as mandated by the IMF conditionality, the ruling coalition of the Kim government was engaged in "nested games" in multiple arenas with political oppositions, both in parliament and in civil society. The ruling coalition was also engaged in negotiation and bargaining with the labor unions and the business sector. Figure 5.1 indicates the game theoretical situation confronted by the Kim administration in 1998 under the IMF supervision of the Korean economy. The incentive and payoff structure of negotiation between the ruling coalition, on the one hand, and big business and labor, on the other hand, reflected a nested game situation involving multiple arenas of bargaining and negotiation. Decisions on whether or not to support the government's reform agenda naturally varied between the two time periods of pre- and postfinancial crisis of 1997-1998, when the Korean economy and its management by the Kim government were placed under the IMF trusteeship. The IMF conditionality was instrumental in bringing all of the relevant political players and actors in and outside parliament to come to accept the compromise package deal with economic reform. The IMF enabled actors to overcome the collective action problem. The logic of game theory, as a variation of rational choice theory in economics, dictates that rational actors seek

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Figure 5.1

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Constraints of the Nested Game Situation and IMF Conditionality in South Korea in 1998

IMF conditionality quo

Big business

s

Seek reforms Ruling coalition

Mai

ntai

n st

atus

No concession and maintain status quo

ain

int

Ma

s tatu

quo Labor/unions

Ves mai ted int ntai eres t n st atus s and quo

Political opposition

to ion osit ess p p o usin ses b pres rm of r o o Lab ek ref se

absolute gain when choosing among strategies. Although cooperation was difficult to achieve between the ruling party and political oppositions, and between big business and labor unions, the model shows how all actors and players were operating under conflicting pressures and how the logic of a collective action dilemma enabled the ruling coalition of the Kim government to persuade political opposition, big business, and labor unions to accept suboptimal choices and settlements. Although South Korea enjoyed high rates of economic growth until the mid1990s, the country went into a severe economic crisis in mid-1997 that ultimately resulted in a request for an IMF bailout. Leading up to the crisis, the government of President Kim Young-Sam had embarked on democratic liberalization but not much economic liberalization. In 1998-1999, during the IMF trusteeship of the Korean economy, the government of President Kim Dae-Jung was also confronted with the challenge of harmonizing its policy of economic reform with the interests of major actors of both the opposition in parliament and the big business and labor/unions in the civil society. This complex situation was well captured in a recent study of the game theoretical analysis of South Korea's democratization in undertaking political and economic liberalization measures (Jesse, Heo, and DeRouen, 2002). The reason that the government of President Kim Young-Sam failed to lay the foundation for economic reform, as Neal G. Jesse, Uk Heo, and Karl De Rouen Jr. argue, was not because of the ignorance of the situation but because of the political complexity in which the government was caught playing nested games (i.e., games in multiple arenas) with the political opposition, the labor unions, and the powerful business sector.

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The Kim Young-Sam government's inattention to economic reform was a structural problem that reflected its weakening political position. It was the price his administration had to pay for a democratizing state compelled to attend to competing political pressures and conflicting interests. The new democracy of South Korea's Sixth Republic had to undergo economic reform with acquiescence to big business but without active support by the politically powerful labor-union sector. If the government could have gained the compliance of business for economic liberalization, however, a mutually optimal outcome could have been reached. Unfortunately, this was not what had transpired prior to the IMF trusteeship of the Korean economy in 1998. This line of rational choice analysis of the collective action problem could also apply to the case of the Kim Dae-Jung administration in its successful attempt to adjust to the pressures of economic globalization. Its attempt to carry out economic liberalization to confront the competitive pressures of globalization was enabled by the powerful presence of the IMF that was in a position to impose and dictate conditions for its financial bailout of the Korean currency from 1998 to 2001. The window of opportunity opened up for South Korea in 1998 to launch the much-delayed but needed structural reform of the economy under the IMF trusteeship, which the Kim administration was able to exploit to its advantage. As the Jesse, Heo, and DeRouen study concludes, "[It] is not that the government [of President Kim Young-Sam] made a mistake in initiating liberalization, or that the chaebol, labor unions or opposition irrationally pursued their self-interests during a time of financial crisis. Rather ... that the nested games in which the ruling party found itself discouraged the evolutionary growth of institutions that could have softened the economic and financial crisis in South Korea" (2002: 421-22). Thanks to the IMF conditionality, the Kim government was able to confront the collective action problem, as illustrated by the nested games situation above, and overcome the political and economic crisis in 1998. After winning the December 1997 presidential election, President-elect Kim Dae-Jung, in association with the outgoing president Kim Young-Sam, was able to mobilize the broad political support from the public at large. At the time that the Kim Dae-Jung administration was launched on February 25, 1998, the government reform bills were already put through parliament by the ruling coalition of Kim Dae-Jung's NCNP and Kim Jong-Pil 's ULD and the active support of the opposition GNP. Unfortunately, the window of opportunity was soon closed, as the ruling coalition in parliament did not survive beyond the first two years of the Kim's five-year term in office. The ruling coalition collapsed over the failed introduction of a parliamentary government system. On the eve of the 1997 presidential election, both parties pledged to adopt the cabinet system of government, but the NCNP broke its promise by refusing to bring about the needed constitutional amendment. The coalition partners also clashed over the key policy issues, like the national pension system, special prosecutors, the national security, and so on. The failure of a party merger

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and the failure of the new ruling Millennium Democracy Party (MDP) to win the April 2000 general election constrained the Kim administration from carrying out its legislative reform agenda. The ruling MDP continued to rely on the greatly reduced ULD as a coalition partner, however, in 2001 and 2002. The new ruling MDP, launched on January 20, 2000, campaigned during the April 15, 2000, general election on the platform of three principles of democracy, market economy, and productive welfare. It announced 189 priority policy options to help Korea emerge as one of the world's advanced countries. The options to achieve this goal included the national ranking among the world's top ten in information and education and first in economy. The legislative enactment of bills to achieve these policy objectives did not have smooth sailing in the National Assembly, however, because of the minority status of the ruling MDP in parliament.

Reconciling Democracy and Globalization in the Kim Young-Sam Administration While democratization posed internal challenges to Korea's Sixth Republic, both under the Kim Young-Sam and Kim Dae-Jung administrations, globalization generated formidable external pressures. The Kim Young-Sam administration responded, unlike its predecessors, to "waves of spontaneous globalization in a proactive and even preemptive manner." President Kim declared his segyehwa initiative to be the leading doctrine for national governance in the second half of his term (Ikenberry, 1999; Bobrow and Na, 1999). The Kim administration moved quickly to ratify the Uruguay Round agreement and to bless the launching of the new WTO. His government also pursued an early, voluntary admission to the OECD. These strategies required opening financial markets and significantly enhancing South Korea's international status. The costs of the proactive globalization drive, however, proved to be high. In retrospect, the segyehwa strategy of the Kim administration seems to have been hastily drawn up and the country was unprepared to face the unintended consequences. The globalization campaign was initially designed to pacify domestic political opposition, following the ratification of the Uruguay Round agreement and the subsequent liberalization of domestic markets. It was also intended as an ideological alternative to replace democratic reforms that were losing popular appeal. The domestic political use of globalization rhetoric, while underestimating its negative boomerang effects, led to catastrophic consequences like the 1997-1998 economic crisis (Moon and Mo, 1999b: 405). A complex pattern of interaction prevailed between the ruling party and political oppositions in parliament, as well as between the state and big business and labor unions in the civil society. The nature of the relationship among institutional actors in the political arena was, in theory, either cohesive (or positive), contlictual (or negative), or neutral, and the pattern varied before and after the crisis of 1997-1998.

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Prior to the financial crisis, the ruling party of President Kim Young-Sam was a majority party in parliament. The Kim administration's attempt to bring about structural reform of the economy, by enacting the segyehwa reform bills through the National Assembly, was a dismal failure. On December 26, 1996, Kim made the biggest "legislative blunder" in his political career, as already noted, to be rectified only by the subsequent measures of revisiting the reform packages in parliament in March 1997. The Kim administration's strategic mistakes consisted of miscalculation on several grounds in introducing the reform bills through the National Assembly. Top on the list of Kim's miscalculations was the ruling NKP failure to obtain interparty consensus on reform. 8 Others on the list included: ( 1) exclusive reliance on the parliamentary arena for dealing with opposition, (2) the state-business arena but neglecting the support base of (3) the state-labor arena and overlooking the dynamics of civil-society activism, especially in (4) the business-opposition arena, (5) the labor-opposition arena, and (6) the management-labor arena. Finally, even though his ruling party had a legislative majority in the National Assembly, the Kim government failed to produce a financial reform bill because, in the presidential election year, neither the legislators nor the presidential candidates in the ruling and opposition parties had any incentive to cooperate with a lame-duck president in getting the controversial legislation passed (Haggard, 2000b: 131). The result was gridlock. The segyehwa drive by the Kim administration, as the Chung-in Moon and Jongryn Mo (1999b) study argues, made three critical mistakes in the design of the globalization program. First was the sequencing error, the point also noted by others including Gills and Gills (2000b). In the pursuit of globalization, realignment of domestic institutions and policies should have been undertaken prior to opening and liberalizing the economy. The Kim administration did not follow this sequence (Moon and Mo, 1999b: 405; Gills and Gills, 2000b). Instead, domestic sectors were opened to the outside world prematurely without any precautionary measures: capital account liberalization without prior domestic financial reform presents a classic example of a failed economic policy. This was not the case with the Kim Dae-Jung administration, which instituted the needed structural reform of the economy in the IMF era. Second was the coordination failure. For globalization to be successful, it had to include all sectors of the economy. Unfortunately, the Kim Young-Sam administration focused on specific sectors without attention to coordinating other sectors involved. Most dramatic was the lack of coordination between trade and financial sectors. While trade liberalization was accelerated along with the ratification of the Uruguay Round agreements, liberalization of the foreign investment regime lagged behind. Capital account liberalization should have been linked to the removal of barriers to foreign equity capital inflow. But in reality, those barriers were not eliminated, precipitating an asymmetric structure of foreign capital mobilization that was partly responsible for the genesis of the economic crisis. Such

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erratic policy coordination hindered the globalization of South Korea (Moon and Mo, 1999b: 406). Because of the IMF-mandated structural reform of the capital and bank sectors, the Korean market opening in the IMF era clearly benefited from the inflow of foreign capital, which made the foreign currency holding strong and sound in the Kim Dae-Jung administration. Third, contradictions between globalization and democratization also reduced the margin for policy maneuverability by the Kim Young-Sam administration. Mandates for democratization favored liberty, equality, and the quality of life, while the globalization mandates increased efficiency and competitiveness. The simultaneous pursuit of these two potentially contradictory positions reduced confidence in the Kim Young-Sam government and its overall reform efforts. For example, immediately after his inauguration, Kim Young-Sam announced plans to accelerate chaebol reforms by focusing on the reduction of their ownership, business, and market concentration as dictated by democratic mandates. Loss of international competitiveness and the failing economy, however, drove his administration to abandon chaebol reforms in the name of globalization. Shifting emphases eventually led to the loss of political support from both the chaebol and popular sector. The same could be said of industrial-labor relations. Kim's earlier pledges to undertake labor reforms in favor of workers were altered to accommodate business demands, which ultimately failed to satisfy either party. Likewise, tensions and contradictions between mandates of democratization and globalization posed profound structural constraints on the Kim administration's reform drive (Moon and Mo, 1999b: 407). It took many years for Japan, after joining the OECD in 1981, to arrive at full compliance with the OECD standards on protectionism and market opening, especially on agriculture. But for Korea's Sixth Republic, its OECD membership involved an almost immediate and instantaneous response to the pressures of globalization. The requirements for the Kim administration to comply with the OECD rules and norms for liberalization were clearly harsher and stricter than they were for the earlier Japanese entry. The Kim Dae-Jung administration was better able to turn adversity into an asset in 1998-1999 by using the IMF presence to its advantage. Restructuring the Korean economy was no longer a matter of political slogan, as it was for the predecessor regimes of Roh Tae-Woo and Kim Young-Sam, but a matter of life and death if the Korean economy was to recover from economic failure. Not surprisingly, the Kim Dae-Jung government used the IMF supervision of the Korean economy to press for its program of reform and restructuring of the Korean economy. In this endeavor, the Kim government was determined not to repeat the mistakes of its predecessor by failing to promote the national consensus on reform. The IMF role as an overseer of the Korean economy restructuring itself proved to be a blessing in disguise and worked as the Kim administration processed the reform bills through the legislature during the first three years of its five-year term in office.

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The political situation in 1998-1999 was clearly different from that in 19961997. The ruling coalition of the Kim administration was better able to foster the national consensus and to mobilize the political support of the population behind the agenda of structural reform of the economy placed under the IMF supervision. Further progress on the reform bills, however, was not forthcoming beyond 2001 because the ruling coalition broke apart and the ruling MDP subsequently became a minority party following the April 2000 National Assembly election. Reconciling Globalization Competition Pressures Under the Kim Dae-Jung Administration The reform policy agenda of the Kim administration was dictated by the Asian financial crisis and mandated by the IMF-imposed conditionality in exchange for $58.3 billion rescue package for the South Korean economy. Whereas the Kim Young-Sam administration reform agenda was launched as a series of presidential decrees from the top, the Kim Dae-Jung administration's approach and style of economic reforms were more consultative, involving the public and interest groups in the process. While the chaebol was the powerful engine of economic growth in the past, in the age of globalization the unwieldy size of the chaebol hampered market competition, technological innovation, and productivity gain (Presidential Segyehwa Promotion Commission, 1997: 345). The history of the state-chaebol relationship was one of state dominance in the 1960s, and shifted to a state-chaebol alliance for development in the 1970s. The growth and rise of the chaebol in the 1980s brought with it the decline of the developmental state (E. Kim, 1997). Having attained a dominant position in the economy by the 1970s, the power of the chaebol challenged the power of the state; the tail began to wag the dog. The autonomy of the developmental state and its capacity to constrain the chaebol had been curtailed by so-called money politics, that is, the financial dependence of politicians on the chaebol. Included in the list of chaebol sins in the age of a globalized world economy were ambitious but reckless investment strategies, antiquated management structures, confrontational industrial relations, private family financial control, dangerous financial practices (e.g., the mutual guarantee system), hidden debt structures, and rent-seeking behaviors (E. Kim, 1997; Gills and Gills, 2000a: 34-35). Globalization is a double-edged sword. South Korea is a successful case of the "late-late industrializers" in the twentieth century that relied on the strategy of rapid and "compressed" industrialization by learning, to borrow the expression of Alice H. Amsden (1989: 3-23). Whereas Great Britain's industrialization was based primarily on inventions and the later industrialization in the United States and Germany on innovation, Korea's industrialization process was based on learning processes, that is, on applying already existing knowledge. The South Korean economy benefited from the dynamics of globalization in its pursuit of the strat-

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egy of industrialization by learning. It was not surprising that in 1996, the year before the economic crisis struck, South Korea became the twelfth-largest economy and the eleventh-largest trading nation in the world. In recognition of this feat, the ROK was admitted to the OECD, the second Asian country after Japan to join the world-premier organization. The financial crisis and the IMF bailout was a blow to the Korean sense of selfconfidence, challenging the pride of the people in achieving and sustaining the economic miracle of the Han River that made South Korea a modern and prosperous country in the 1990s. Whether and how South Korea could overcome this crisis and shift from a mercantilist model into a neoliberal, market-oriented economy would have broader implications and relevance for other East Asian countriesnot only the more advanced ones, like Japan and the Republic of China (Taiwan), but also to a host of other Asian newly industrializing countries, like China, Malaysia, Thailand, the Philippines, and so on. Unlike advanced industrial democracies in the West, South Korea was yet to emerge as a functioning welfare state. At the start of the new millennium, Korea, with its new democracy and emerging market economy, was trying desperately to carry out structural reform and industrial readjustment of the economy. It was striving both to overcome the impact of globalization, represented by the consequences of the financial crisis, and to build a welfare state that would accommodate the victims of industrial restructuring through a widening social safety net. Industrial labor disputes like the Daewoo Motor plant shutdown by the workers was a painful example. The union resisted laying off workers in part because of an inadequate safety net and unemployment compensation. The Kim government had to reconcile conflicting and contradictory forces, the market system, and marketizatjon of the economy. Market and marketization of the economy, strictly speaking, are not synonymous with the market system. The market system requires greater commitment to adopting a set of new institutions and institutional norms, while marketization may entail tinkering with policy primarily for enhancing tasks and economic task performance in production and allocation of resources. The East Asian developmental states of Japan and South Korea introduced market forces and marketization into their economies prior to the Asian financial crisis of 1997-1998. China, under the slogan of "market socialism" or "socialism with Chinese characteristics," has also done so since 1979, under the leadership of Deng Xiaoping and his successors. Other East Asian socialist states in the post-Cold War era like Vietnam have attempted to emulate the Chinese model, and so the possibility exists for North Korea as well under Kim Jong-Il. Adoption of the market system, however, requires wholesale changes and a transformation of the economy from state management and control toward marketdriven allocation of resources. In retrospect, the East Asian mercantilist capitalism of the developmental state is said to have "failed miserably as a model for Asia as well as for the rest of us"

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(the world) (Krarr, 1999: 115). The reason given is that "the government bureaucrats and autocrats who claimed to have the answers for spurring economic growth stumbled over their own inherent weaknesses." The list of failed policies would include, among others, "rampant corruption, collusion with favored companies, and cronyism that funneled questionable loans to friends and family of government leaders .... The key lesson that all East Asian economic managers have learned is that they were accountable not only to domestic actors but to the international financial markets and their key players" (ibid.). Globalization has brought about both winners and losers. This is so because "globalization brings the promise, but not the guarantee of prosperity" to the world, as former president Bill Clinton notes (2001). Also, responses to globalization vary not only between sovereign states, but also among governments within those states. Based on the premise that there are clashing approaches to the challenges of globalization and clashing styles of implementing policy responses, this chapter has offered a comparative analysis of the responses of two different Korean administrations. When the two South Korean experiences of globalization responses are compared and contrasted, it seems that the Kim Dae-Jung government learned from the errors and mistakes of the preceding administration. For the Kim Young-Sam government, the onrush of globalization and its pressure for policy adjustment was clearly an uncharted path in troubled waters. The administration of President Kim Dae-Jung had the advantage of learning from past mistakes and failures. For the Kim Young-Sam administration, the onrush of globalization in the world economy was swift and radical. Greater external pressure came from the Clinton administration, along with mounting demands for opening agricultural markets that were generated by the conclusion of multilateral trade negotiations of the Uruguay Round and the 1994 launching of the new WTO regime. The Kim Dae-Jung government was confronted by the IMP rescue plan and mandate of structural reform by the time his administration began in February 1998. The Clinton administration, fortunately, was strongly behind the IMP rescue plans, extending a helping hand to the new South Korean government. Without strong support by the U.S. Treasury Department, backed by financial and business sectors in the United States, the IMP bailout would not have come about in a timely fashion. President Kim Young-Sam's transitional democracy and unprepared globalization dashed his dream of leading South Korea into a fully democratized, first-rate nation during his term in office. But Kim Young-Sam's failures gave opportunities for the new government under President Kim Dae-Jung. The economic crisis and imposition ofiMF conditionality provided the Kim Dae-Jung administration with a new mandate and leverage to implement the unfinished task of addressing the issues of globalization. Within the first year after his inauguration in February 1998, President Kim was able to remove most of the remaining barriers to economic liberalization. These included, for instance, foreign ownership of land,

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mergers, and acquisitions of domestic firms by foreign entities, and hostile takeovers of domestic firms by foreign firms, all of which were unthinkable under the previous administration (Mo and Moon, 1999b: 162). Structural adjustment was also swiftly implemented. Reorganization of banks and financial institutions (or "big bang"), restructuring of big business through mergers and acquisitions (or "big deal"), and social pacts among business, labor, and government were all undertaken without causing much serious social opposition. The failures of Kim Young-Sam's democratic reforms also provided valuable lessons for the Kim Dae-J ung government in charting out new approaches to democratic governance and fostering democratic consolidation. Overcoming regional cleavages, forging elite settlement, institutionalizing the party system, eradicating political corruption, and inducing people's behavioral and civic-cultural reorientation toward democratic consolidation also emerged as urgent tasks of political reforms in the new era. The Kim Dae-Jung administration launched a national campaign for rebuilding Korea by focusing on these issues. The so-called second nation-building campaign, which was not well received by the public, attested to the president's resolve to finish the self-proclaimed task of attaining the parallel goals of democracy and market economy. Kim Dae-Jung was able to exploit an important legislative window of opportunity between his election and inauguration. During this period the National Assembly passed the same package of financial and other reform bills that had languished during the Kim Young-Sam administration prior to the December 1997 presidential election (Haggard, 2000b: 132). During the first year of his administration the Kim Dae-Jung government also proved effective in exploiting "outside pressures" to foster the process of structural reform, especially when the country was in dire need of foreign capital after the IMF bailout (Mo and Moon, 1999b: 160-161). Kim's building foreign support, in fact, had helped him domestically in carrying out his legislative reform agenda because his party did not control the legislature. 9 Nevertheless, prospects for future governance in South Korea remained quite precarious. South Korea was coping with the economic crisis relatively well, and some signs of economic recovery began to appear. On August 23, 2001, South Korea signed a final check for the IMF to end the country's financial crisis nightmare ("South Korea Closes IMF Debt, Signs AIG Deal," 2001). The volatile nature of the regional and international economy could, however, easily shatter a nascent economic recovery. The dangers associated with globalization had not disappeared and would continue to haunt South Korea as long as it was seeking to further integrate itself into the international and regional economy. More troublesome was democratic governance. The Kim Dae-Jung administration was able to pacify the fury of domestic opposition by taking advantage of the economic crisis, but political opposition tended to regroup, once the fear of the economic crisis was overcome. As with the Kim Young-Sam administration, the law of diminishing returns prevailed, undercutting the gains of the Kim Dae-Jung

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government. The structure and culture of governance in Korea had not changed. Lingering domestic political paralysis underscored this trend. Conclusion

Three factors have made a difference in the pattern of South Korean responses to globalization. The first factor was the quality of leadership, reflecting the varying styles and approaches of the respective ROK governments. Leadership visions and styles made a difference in terms of the success and failure of the Korean economic response to the globalization challenges before and after 1997-1998. The second factor was the timing and sequencing of economic reform undertaken by each administration. Domestic political and partisan reasons affected the responses of each of the Sixth Republic administrations as they moved toward structural reform of the economy. The Kim Young-Sam administration took a pro-business stance vis-a-vis the labor unions, despite its rhetoric of reform on industrial relations to the contrary. The Kim Dae-Jung administration, in contrast, made a genuine effort to involve organized labor as an equal partner in the process of carrying out the structural reform of the economy. The third factor was the role of external forces like the U.S.-backed IMF and the Clinton administration in pursuing a neoliberal economic policy agenda for strengthening the WTO free-trade regime. Without the strong backing of the Clinton administration as a hegemonic power, the attempt by the Kim Dae-Jung administration to carry out the bold structural reform of the Korean economy would not have been successful. In addition to these three factors, the Korean mind-set seems to have operated to shape the Korean pattern of responses to the globalization threat and challenges. The inner structure of the psyche of Koreans is probed by C. Alford in his recent study of the attitudes and value orientations of the Korean people, Think No Evil: Korean Values in the Age of Globalization (1999). Based on his field study in Korea in 1997, Alford contends that Koreans tend to regard "evil not as a moral category" but as an intellectual issue. For Koreans, globalization and its impact on Korean society at large were not moral questions of good or bad but intellectual questions regarding how to respond to and cope with an impact on society that can be both attractive and terrifying (1999). The IMF oversight of the economy and its conditionality had proven to be a blessing in disguise. For the Kim Dae-Jung government in 1998, it was an unavoidable but invaluable experience. The Asian financial crisis was a serious threat to the Korean economy, but it also provided an occasion for turning the danger into an opportunity for carrying out the structural reform of the Korean economy that was long overdue. The Kim government moved to carry out the reform of the chaebol, at least in theory, making their management more efficient and productive by adopting the rules of transparency and accountability. Many chaebol failed, including Daewoo and Hyundai, while others weathered the storm of reform. As a result, the South

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Korean economy has become more capable of withstanding subsequent external disturbances. The Korean economy in 2001, however, faced serious performance problems for the year, including a slowdown in economic growth and a decline in trade because of a deterioration of the world economy. The South Korean economy was trade dependent, with 65 percent of its GDP generated by the trade-related sectors. Foreign direct investment, which grew between 1998 and 2000, did not expand in 2001 (Weber, 2001: 1). Most importantly, there were growing crises in the Kim Dae-Jung leadership, at least so perceived by the public. Unless a turnaround took place in a timely fashion, Kim would be relegated to the unenviable predicament of being a lame-duck president during the last year of his five-year term in office, which was to end in February 2003. This happened to his predecessor President Kim Young-Sam at the time of the onset of the 19971998 Asian financial crisis. During the last year of the Kim Young-Sam administration, nothing positive had happened to the Korean economy, and the government was paralyzed by scandal. The Hanbo Steel collapse, in which Kim's son was implicated in influence peddling and tried in court for bribery charges, was the most highly visible example. There was no assurance that a similar charge would not be filed against the Kim Dae-Jung administration during the remainder of his term in office. In fact, this has become the familiar norm and pattern in South Korean politics. Most of the incumbent presidents finish their terms in disgrace. No South Korean president has ever completed his term in office with honor and without impunity. In a rather prophetic note, at the occasion of marking the third anniversary of his administration on February 28, 2001, Kim admitted that his reform agenda was only "semisuccessful" and that he was determined to eliminate corruption in the remainder of his term in office before February 2003. On a more positive and optimistic note, the Kim government used globalization partly as a means through which to alter the state-capital relationship. In a way, the agenda of structural reform of the financial and corporate sectors became the central piece of his economic policy. The challenge of globalization for Kim was that in order for the state to enforce a transition to a market economy via deconcentration and related reforms, it first had to regain sufficient autonomy to impose the change on business and labor. His government sought to wield the powers of a strong and interventionist state, in the short term, so as to bring about a liberal order in the long term. Building a welfare state for South Korea, the initial vision of President Kim Dae-Jung, had proven to be more difficult. To do so would require drastic reforms, not only the structural reform of the economy but also of the political culture and attitude of the people. Kim's experience in negotiating the globalization impact, in terms of the tripartite partnership of business, labor, and government, was on the right path, but it turned out to be a tortuous political path. The policy priorities of the Kim government of structural reform and promotion of

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information technology, together with investment in education, were all good policies. If realized, they will bring about greater reward and return to Korea for its investment in the twenty-first century (PCPP, 2000). Expansion in the use of the Internet in Korea has been phenomenal, as has been the success of venture capital and micro loans to small and medium enterprises in technology fields. New information technology and government policy support were set up to work together in the pursuit of new innovation. The application of new technologies to create social good, however, was expected to go hand in hand with making the national economy more competitive and enabling it to survive the acute competition in the world marketplace. Fortunately for South Korea, there has not been much backlash to globalization, as compared to other countries and regions (Stiglitz, 2002). 11 ROK governments have been trying to seize the opportunity to press not only for continued structural reform of the economy, but also for the creation of an environment for broader sociopolitical reforms. This objective will require no less than a new set of cultural norms that are conducive to institutionalizing the rule of law. It will also require enforcement of the existing laws and regulations without introducing past practices of "money politics" and government bailout of business failure. Business firms should be held accountable not only for their investment and management, but also for their collusive or corrupt practices. When this is realized, it will mean that the South Korean economy will finally have joined the world of open and competitive business in advanced industrial democracies, thereby expunging the image of South Korea's crony capitalism once and for all (D. Kang, 2002). We turn next to examine how competitive pressure in the global market may lead to the transformation of the Korean state in the global political economy.

6 Global Political Economy and the Korean State

[T]he causes of the wealth and poverty of nations-[are] the grand object of all enquiries in Political Economy. 1

Malthus to Ricardo, letter of January 26, 1817 Reciprocity and redistribution are principles of economic behavior which apply not only to small primitive communities, but also to large and wealthy empires. 2

Karl Polanyi, 1957 How has South Korea's democratic state managed to restore its confidence and recover from economic failures in the wake of economic meltdown of 1998? In responding to economic crises at home and difficulties abroad, the South Korean government of President Kim Dae-Jung stated that it would pursue "a parallel development of democracy and market economy .... If democracy and a market economy harmonize and develop in tandem, there will be no collusion between government and business circles," said the new president in his February 25, 1998, inauguration address (1998c). He also added that this would guarantee "no government-controlled finance and no corruption and irregularities." This strategy of simultaneously promoting political democracy and economic growth through market reform, however, was more easily said than done, as the previous discussions in Chapters 4 and 5 have shown. Promoting a "sustainable democracy" was not only ambitious, but also challenging for new democracies. What makes a democracy sustainable, given the context of exogenous conditions of democratization and globalization, are its institutions and performance. Democracy is sustainable, as Adam Prezeworski et a!. note, "when its institutional framework promotes normatively desirable and politically desired objectives," such as freedom, security, justice, and equality, and "when, in turn, these institutions are adept at handling crises" that would arise when such objectives are not met (1995: 107). Whether the Kim Dae-Jung administration successfully met these complex political objectives, an institutional performance that it set for itself, requires a careful scrutiny. His administration certainly went through numerous obstacles in overcoming 183

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crises at home and abroad. The success or failure of the Kim administration depended in large part on the record of performance of the economy. Whether and how the Korean state transformed itself in the process of the institutional adaptation and implementation of this globalization and democratization strategy also needs to be examined. This chapter discusses some of the promises kept and difficulties faced by the Kim administration, along with implications for the subsequent Korean administrations beyond 2003. Recently, a growing body of conceptual and empirical work has illuminated the link between modes of political governance and socioeconomic development (Fukuyama, 1999; Haggard, 1999; Han, 1999). The World Bank has, for instance, given greater prominence to this link in its programmatic initiatives by exploring a "comprehensive development framework" that emphasizes social institutions and governance structures (Stiglitz, 1999; World Bank, 1997). It attributes differences in development experience, with respect to such aspects as the willingness to reform and the scope for civic participation, to differences in the nature of governance. The list of issues includes certain aspects of governance, like corruption and cronyism, that have characterized several East Asian economies (Haggard, 2000a; D. Kang, 2002). The 1997-1998 Asian financial crisis and recovery from it highlighted dramatically this link between political governance and socioeconomic development. As a response to this crisis, significant changes have now taken place in the governance structures of several Asian countries, including South Korea. The global political economy denotes an increasing interdependence and complex relations forged between national economies that provide the proper context for expanding political and economic interactions among the nation-states (Gilpin, 2001). Although globalization has become the defining feature of the world economy, some voices of caution have indicated that the extent and significance of "economic globalization" should not be exaggerated nor misunderstood in public discussion (Boyer, 1996; Wade, 1996). As Robert Gilpin argues, "[W]e still live in a world where national policies and domestic economies are the principal determinants of economic affairs" and "globalization in fact is not nearly as extensive nor as sweeping in its consequences (negative or positive) as many contemporary observers believe" (2001: 3, 362-376). The following discussion will proceed in several steps. The myth of East Asia's miracle economy will be reviewed, first in the light of the Asian financial crises that swept across the region with devastating effects on the Korean economy. This will be followed by an analysis of the nature of the Kim Dae-Jung government's performance and its structural reform of the Korean economy. The Korean state in the post-International Monetary Fund (IMF) years has gone beyond the "third wave" of democratization into the "third way" of politics. This suggests that the Kim Dae-Jung government entertained the future vision of social democracy and the capitalist development path that subscribes to the logic of a competitive state in a globalized economy. Finally, the dilemmas of harmonizing and reconciling

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democracy with development tasks will be addressed as the continuing challenge for the competitive state in Korea's Sixth Republic.

The Unraveling of Korea's Miracle Economy: East Asian Miracle Revisited The World Bank's 1993 report East Asian Miracle credited the economic success of East Asian countries in the post-World War II era, including that of South Korea, mainly with "getting the fundamentals right" (1993; Amsden, 1989; Gilpin, 2001: 321-328). This report also refers to the role of state and identifies important tasks performed by various institutions, such as intermediaries between government and the private sector, as well as to relatively equal distributions of income. 3 Most of East Asia's central governments were said to intervene extensively in favor of particular industries and firms through policies of industrial target setting and subsidization. These policies included state-owning banks, varying degrees of import protection, subsidies, restrictions on foreign investment, controls over trade unions, and spending on applied research (Rowen, 2000: 496). The 1993 report graded these state-led activities positively in countries in Northeast Asia (like Japan, South Korea, and Taiwan), but negatively in Southeast Asia (as elsewhere in the world), attributing the difference to the competency of bureaucrats and their insulation from rent-seeking politics. These findings of the World Bank, however, have proven to be controversial, especially in the light of the 1997-1998 Asian financial crisis that was considered to be the functional equivalent of the Great Depression of 1929 or the world energy crises of 1973 and 1979. 4 Some critics held that the report did not adequately make the case for the role of the fundamentals nor, alternatively, reflect adequately on the merits of the state interventions inN ortheast Asian countries (Rodrik, 1994; Little, 1996). Ian Little (1996), for instance, faults the report for using shaky data in estimating significant gains in total factor productivity as well as for claiming industrial policy successes. He also finds that rapid growth in East Asian countries was mainly based on labor-intensive manufacturing that employed well-educated, hard-working, docile labor forces. According to the critics, these economic achievements in Korea were, in short, fully explicable in conventional terms: high rates of material and human investment, avoiding macroeconomic disasters, and governmental favoring of pet projects, such as shipbuilding, steel, autos, electronics, and others in Korea (Rowen, 2000: 496). This underscores the question of how to account for the rise and decline of Asia's miracle economies. Asian newly industrializing economies (NIEs) like South Korea were lucky in their timing of entry into the world economy. The international environment was favorable after World War II: the Bretton Woods agreement provided for a stable financial system; the industrial countries were booming; the United States provided a large, relatively open market; development assistance was available; and the American military provided protection.

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Of course, not all countries were accorded an equal chance or assistance, but the international environment favored development-oriented and competent governments everywhere, especially those that avoided crippling domestic or foreign conflicts and the ideology of socialism. World trade continued to expand, after the early 1970s, with multinational companies transferring technology to others. The NIEs exploited the potential, first offered by the Little Tigers (South Korea, Taiwan, Hong Kong, and Singapore) and then by Southeast Asian economies (Malaysia, Thailand, and Indonesia). This was followed by China, after 1979, and Vietnam, after 1986 (Rowen, 2000: 491-492). Explanations for East Asia's economic miracle were centered around three key factors and variables: policies, social capabilities, and external influences. Better policies were adopted, and the social capabilities of the Asian countries were greater than those of other world regions, including Africa, Latin America, or eastern Europe. The external influences during the Cold War era favored the East Asian countries allied with the United States. Four contending models or analytical perspectives of the political economy of South Korea have been suggested to explain the context of South Korea's economic rise and decline: the institutional factor of market, the role of the state, social networks, and the international system (Moon and Lim, 2001: 202). The first is the perspective of a market economy, which attributes South Korea's economic success to the interplay between an open economy, market-conforming government policies, and assertive entrepreneurship by the private sector (Balassa eta!., 1982; Hughes, 1988; World Bank, 1993). Those who identify themselves with the developmental state theory school challenged this neoclassic economic theory perspective in the early 1980s, however (Wade, 1990; Evans, 1995). A group of political scientists, sociologists, and developmental economists who belonged to this camp argued that market forces alone could not adequately explain the East Asian miracle. The South Korean state was not a minimalist state, envisioned by neoclassical economists, but had its own developmental objectives linked to building a rich and prosperous economy. The South Korean state made strategic intervention plans for the economy through plan rationale, industrial targeting, and mobilization and selective allocation of resources in strategic sectors (Moon and Lim, 2001: 203). The South Korean miracle economy, as Alice H. Amsden observes, was a product not of "getting the prices right" but "getting the prices wrong" (1989: 139-155). The statist claims were by and large predicated on the dichotomy of state and society, in which the state was assumed to prevail over civil society. State autonomy, which is the hallmark of developmental state theory, began to erode with the rise of civil society and increasing demands by social groups with the 1987 democratic opening in South Korea's political economy. The third school of social networks theory assesses the East Asian economic miracle by arguing that the state and society were constantly interconnected through a myriad of formal and informal networks and that a country's economic performance depended on the nature of these networks (Evans, 1995; Fukuyama, 1995b; C. H. Lee, 1992).

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Rapid capital accumulation and efficient economic policy in South Korea was made possible in the past through restrictions on social demands, not only of labor or the popular sector, but also of rent -seeking business groups. However, the South Korean government was no longer able to overcome this collective action dilemma by insulating economic policy making from these contesting social pressures. The interplay of unique state-society relations, therefore, would explain the bulk of the rise and decline of South Korea's economic miracle. Finally, the external environment of global and regional systems provided a fourth set of explanations as to the rise and decline of the South Korean economy. During the Cold War era, South Korea's geopolitical location and dependency on the United States as an ally gave an advantage to the Korean economy reaching out to the world marketplace through export expansion and export-led strategy of industrialization. However, things no longer remained the same in the era of globalization and global political economy. The onset of the 1997-1998 Asian financial crisis and negative fallout on the Korean currency attested to the fact that the Korean economy was no longer able to pursue the policy of a neomercantilist state in the changing conditions of a more integrated world economy. Why the Economic and Financial Failures?

South Korea, prior to the IMF era (1998-2001), was considered to be one of East Asia's economic miracles (World Bank, 1993). However, South Korea's miracle economy was not to last beyond the Asian financial crisis of 1997-1998. The Korean economy was on the brink of default through acute foreign exchange and liquidity problems in November 1997. What were the reasons for this decline of the Korean economy? The factors that contributed to this economic failure were declining international competitiveness, massive investment with borrowed money, pervasive moral hazard and rent seeking, some critical failures and mistakes of government policies, and external contingencies combined with regionwide financial instabilities in Asia (Moon and Lim, 2001: 214-225). As the South Korean government of President Kim Young-Sam turned to the IMF to rescue its currency through loans and loan guarantees, the Korean economy was temporarily placed under IMF trusteeship and supervision. In exchange for the IMF providing loans to defend the value of its currency, the Korean government pledged to carry out structural reforms of its economy. The Korean economic crisis of 1997-1998 was caused by both external and internal factors (D. Lee, 2000; Mo and Moon, 1999a). Included in the list of external factors was a premature opening of a capital account, current accounts deficits, loss of investor confidence, and a contagion effect of Asian currency failures elsewhere. The Korean currency, defended initially by a government commitment to fixed or heavily managed exchange rates, came under downward pressure, with the exchange rate falling from a high of 800 won per $1 to a low of 2,000 won in

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January 1998. External factors alone, however, could not explain why the Korean economy suddenly failed in 1997. Other East Asian countries, like Taiwan, successfully escaped the externally induced financial crisis. Internally, the economic failure began as a banking crisis. The old practice of the Korean industrial policy was for the government to control credit and allocations. Since the government decided where the money should go, the banks had little incentive to develop their own management capacity. Under this system, the risk to the banks was minimal because the government gave guarantees for depositors and also bailed out the companies that it actively supported. This was a kind of coinsurance scheme among government, banks, and industry that worked well during an early stage of the Korean industrialization but was not suited in the era of liberalization and deregulation of the economy in the 1990s, and left the banking sector vulnerable and inefficient. Most of the banks were unable to meet the Bank for International Settlements' (BIS) capital-adequacy requirements at the time of the IMF bailout scheme in 1998. Other structural problems of the economy undermined the competitiveness of the corporate sector. For instance, Korean businesses blamed the "three highs"the high costs of labor, capital, and distribution-for their troubles. The wages of the worker rose at an average rate of 76.8 percent in real terms during the 19871996 years, often exceeding productivity gains. These wage increases grew faster than productivity and efficiency gains of industry. Business naturally demanded labor and financial reforms as a way of reducing the high costs of labor and capital. On the other hand, others blamed the inefficient management practices of the chaebol (big business conglomerates) and the government policies that promoted and protected them. They argued that the chaebol neglected productivity andresearch and development in their obsession with expansion and market share. The corporate sector suffered from structural limitations. The chaebol organization, for instance, was highly centralized, with a skewed governance structure that undermined business competitiveness. Decisions by owner-managers went unchallenged and no effective internal or external monitoring mechanism for investment decisions existed. The chaebol were also criticized for expanding into businesses outside of their own competencies. "The main instrument of expansion was mutual-payment guarantees, in which chaebol member companies promised to pay third-party lenders if their member firms defaulted on loans" (Mo and Moon, 1999b: 154). On December 3, 1997, the Republic of Korea (ROK) government sent a memorandum of understanding to the IMF director general requesting measures to defend the Korean won. In return, the Korean government promised the IMF to reform the structural distortions of the Korean economy in the labor, financial, and chaebol sectors as a condition for the financial bailout. The resulting sense of national emergency led the National Assembly during the month of December to enact a total of thirteen financial reform bills that the future Korean government, placed under IMF tutelage, was to implement.

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Under these reform measures, the fragmented regulatory bodies were consolidated into a single superagency with streamlined responsibilities called the Financial Supervisory Commission (FSC). The deposit-insurance system was also reformed, and the legal basis was established for raising bank-bailout funds and reorganizing troubled financial institutions. These new institutional arrangements did not become fully operational, however, until Aprill998, after the launching of the Kim Dae-Jung administration on February 25, 1998.

Government-Business Relations and Moral Hazard In building the system of a national economy, a state-led strategy of economic development was adopted because it had provided the backbone for the Korean economic success story in the preceding years. Much of Korea's success reflected the government getting the fundamentals right, such as high rates of literacy, high savings and investment rates, and low inflation rates that stayed within bounds of an outward-oriented economy (Amsden, 1989; Clifford, 1997: 5). The government's steadfast pursuit of industrialization of the economy in the 1960s and 1970s made the so-called East Asian miracle economy possible. The means to achieve economic development were an expansion of international trade by increasing the trade volumes oflabor-intensive manufactured products to the world marketplace. The government pursued "dirigisme," or the developmental state, which was the dominant economic ideology in South Korea before the 1980s (Wade, 1990; Moon, 1999: 2). The government targeted particular industries for support, which led to close government-business relations, and an industrial policy was the primary instrument for economic development. This was all made possible because of the favorable world market that, in tum, led to an expansion in the volume of world trade throughout the 1970s and 1980s. In the early 1980s, the ideas of developmental state policies and state intervention began to fade in favor of the idea of neoliberalism in economic discourse (Y. T. Kim, 1999). The end to the protectionist policy of the development state was heralded by two major events: the political act of the assassination of President Park Chung-Hee in October 1979 and a world recession that precipitated overcapacity in the Korean industry. Korea's democratic opening in the late 1980s and economic globalization in the early 1990s necessitated changes in economic institutions and management styles. The successor state of South Korea's Sixth Republic was ill prepared to confront the changing times. The Korean economy was not ready, for instance, to participate in the new developments in the world economy that started in the mid-1980s, in terms of an expansion of the multinational corporations and foreign direct investment. South Korea missed an opportunity to invite foreign companies to invest in the Korean market, or to undertake joint ventures with Korean businesses, as they did with Chinese businesses. This would have been one way of building a powerful basis

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for the Korean economy and allowing it to become more competitive in the world marketplace. Instead of establishing joint ventures with foreign companies for economic development at home, as was done in China, the Korean companies attempted to ride their own risky overseas investments and expansion throughout the 1990s. Korean business investment abroad turned out, in retrospect, to have been overly ambitious and somewhat reckless. This seemed to have been the case with the Daewoo business group, which mismanaged its overseas investment. Daewoo was no match for foreign competition when it came from the more developed and advanced economies in the West. The close ties that existed between government and big business were considered beneficial in the early days of the developmental state. An export-led strategy of industrialization was opted for by the state that gave government subsidies to protect "infant industry" until the firms became competitive in the world marketplace. But close government-business ties carried risks. Such ties raised the question of "moral hazard" that, with the changing times, contributed significantly to economic vulnerabilities. This protection policy played a major role in the eventual failure of the Korean economy during the 1997-1998 financial crisis. The government-direct dealings with the financial sector involving bank regulations were tantamount, in times of economic recession, to government bailouts of the failing businesses. This close government-business relationship, often characterized as "Korea Inc.," constituted an environment known to economists as "moral hazard." Moral hazard refers to "the presence of incentives that cause individuals to act in ways that could incur costs that they themselves do not have to bear." This was an environment where corruption could thrive because of the lack of institutional oversight, while "key business skills such as risk assessment remained underdeveloped" (Chamberlin, 2001: 41, 56). In the Korean context, this meant that bank owners were not required to account for the bad loans that they made to the chaebol because they knew the government would bail them out in any case. Banks typically lent money to businesses without regard for the loans' viability or transparency. Western observers blamed the "crony capitalism" of the East Asian developmental state as sowing the seeds of its own destruction (D. Kang, 2002). The "flawed" components of crony capitalism included the intimate ties among local politicians, banks, and industry; bank rather than stock market financing of economic development; and nontransparent (or secret) financial arrangements involving government-favored businesses and banks. These practices led to the government recklessly encouraging questionable investments by appearing to guarantee business investors that their investments were free of risk. This was the way that the developmental state created the moral hazard that ultimately led to the Asian financial crisis (Gilpin, 2001: 330). Political liberalization and democratization pressures, however, made businessgovernment relations increasingly contentious and untenable (Haggard and Moon,

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1993; E.M. Kim, 1997). In the early days of the military government, President Park Chung-Hee himself acted decisively to break up rent-seeking relationships between the government and the private sector. But Park's successor governments in the 1980s made peace with the private sector by establishing a variety of consultative mechanisms, including periodic meetings between the president and chairmen or representatives of the major chaebol. As the chaebol grew in size and the government undertook its heavy industry drive in the 1970s, the nature of business-government relations became increasingly controversial. When Major General Chun Doo-Hwan seized power in 1980, the government instituted tighter controls on credit, passed an antimonopoly law, and forced a major restructuring of business. However, at the same time, both Chun and his successor Roh Tae-Woo required resources to compete as the political arena slowly liberalized. Roh won the first democratic election as president by a plurality, in December 1987, because the two opposition candidates-Kim YoungSam and Kim Dae-Jung-had split their votes. In 1995, as noted in Chapter 4, an opposition lawmaker under the Kim YoungSam administration (1993-1998) accused former President Roh of having amassed an enormous political slush fund. Prosecutors were able to trace the funds because the new government had enacted a "real-name" accounting system to end the practice of hiding funds for tax and political purposes. The world was stunned by the size of the fund Chun bequeathed to Roh-$285 millionand similar amounts Roh added to it. This revelation raised the moral hazard questions about the unknown favors that big business had received in return, from licensing and finance to lax tax laws and regulatory treatment (Haggard, 1999: 42-43). In the 1990s, with democratic transition and consolidation, the private sector became more assertive in lobbying against unwanted controls by the government and openly supporting sympathetic candidates. As the Hanbo Steel collapse of 1997 indicated, democracy provided new channels for business influence through the National Assembly. But at the same time, Roh Tae-Woo, Kim Young-Sam, and Kim Dae-Jung were all under continual political pressure-from labor, students, civic organizations, and the public-to "do something" about the increasing concentration of business and corporate malfeasance and corruption. Political battles were waged over the nature of business-government relations which, in turn, became the main policy agenda for both the Kim Young-Sam and Kim Dae-Jung administrations (Haggard, 1999). The government industrial policy and close business-government relations raised the question of moral hazard with the increasing concentration of private economic power and dependence of politicians on particular business firms. The old practices of close ties between the government and chaebol resulted in corruption charges, policy bias, and economic mismanagement (Haggard, 2000a: 15-46; D. Kang, 2002). This system was in need of change and reform under a new democracy. On the eve of the 1997-1998 Asian financial crisis, the necessity for structural

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reform of the Korean economy was widely known and debated. The economic crisis could have easily been forestalled if the government took appropriate and timely measures. For instance, a conference on "An Agenda for Economic Reform in Korea: International Perspectives" was held in January 1997 (Judd and Lee, 2000). It identified three legacies of the Korean economy in the preceding decades: preoccupation with economic growth and less concern with social development; concentration of economic power around large business groups, which generally weakened the position of small- and medium-sized business firms; and immature or undeveloped industrial relations that led to militancy in labor-management disputes. These characteristics of Korea's development strategies in the mid-1990s led to the more serious structural problems of the Korean economy that required rectification and reform. The problem areas of the Korean economy, according to the economists participating in this conference, were a weak financial sector, the development of which had been constrained by the government drive for industrialization; regional imbalance and concentration of industries, which required redressing; and government-initiated development with a multitude of regulations that continued to restrict business activities at home and abroad (Judd and Lee, 2000: 12). Therefore, at the time of launching a new administration in February 1998, President Kim Dae-Jung and his advisors were already well kept abreast of the nature and scope of the structural reform that the Korean economy needed to heighten international competition in the era of globalized political economy. Economic Crisis, Recovery, and Restructuring

As an opposition leader prior to December 1997, Kim Dae-Jung was a fervent advocate of democracy and led his democracy movement as a human rights activist. Once installed as an elected president, Kim Dae-Jung was expected to put his political agenda into government policies and programs and to carry out the mandate of implementing the IMP-imposed structural reform of the Korean economy. Kim Dae-Jung characterized his administration, during his inaugural address on February 25, 1998, as a "government of the people," which was realized by the power of the people, thereby accentuating the ideas of democracy ( 1998c ). 5 Pledging himself to focus on "overcoming national crisis and taking a new leap forward," Kim promised to promote, simultaneously, "democracy and a market economy." His administration would address the pending economic crisis and help Korea to advance "from industrial societies ... into knowledge and information societies where intangible knowledge and information will be the driving power for economic development" (Kim Dae-Jung, 1998c). The primary task of the Kim Dae-Jung administration, therefore, was to overcome the economic adversity following the 1997-1998 Asian financial crisis. The next task was to perform a structural reform of the economy, which was placed under the IMP-imposed restrictions, by implementing financial and banking

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reforms as well as corporate governance and labor market reforms. The central theme of Kim Dae-Jung's economic agenda, highlighting a parallel development of democracy and a market economy, was often called "DJnomics" or "mass participatory economy." One way of judging the level of success of DJnomics is to examine the performance record of the Kim administration on economic recovery and restructuring.

Economic Crisis and Recovery On the eve of Kim Dae-Jung's inauguration as president, the Korean economy was faced with the most serious crisis since the Korean War (1950-1953). It was caused by an accumulation of unhealthy economic conditions and the moral hazards faced by many business corporations. The rapid economic growth led by the state since the 1960s had created an economic structure that was too high in cost and low in efficiency. The result was that Korea's competitiveness lagged behind internationally and Korea's overall economy became unhealthy. Corporations faced moral hazards because there was no clear-cut system of management that took responsibility for business failures. In overcoming the economic havoc wrought by the 1997-1998 Asian financial crisis, some of the Asian governments moved swiftly to address these issues, while others were less successful in policy adjustments (Haggard, 2000a). The Kim DaeJung administration proved to be reasonably successful in promoting both a speedy economic recovery and an extensive restructuring of the economy. The direction of change that the new government of President Kim Dae-Jung initially launched in 1998 could be characterized as a crisis management state. The Emergency Economic Policy Committee was established during the transition from the Kim Young-Sam to Kim Dae-Jung administrations. This was an attempt to coordinate and institute effectively the necessary measures to rescue the Korean economy from a further downslide and to restore the economy to the path of economic growth. In the first year and a half of his five-year term in office, the Kim Dae-Jung administration appeared to attain this stated goal. Table 6.1 shows the evidence to indicate the success of the economic recovery policy of his administration, which was based on an emphasis on balanced and stable growth. The Korean economy had registered a negative annual growth rate of -6.7 percent in 1998, following a slower growth rate of 5.5 percent in 1997, but turned around and began to move upward to 10.9 percent in 1999 and 9.3 percent in 2000. Because of a worldwide economic slowdown and recession in 2001, especially in the wake of the September 11, 2001, terrorist attacks, the Korean economy registered slower growth of 3.1 percent in 2001 but a high of 6.3 percent in 2002. Inflation and consumer price increases were high initially, with 4.5 percent in 1997 and 7.5 percent in 1998, but stayed relatively low thereafter, with 0.8 percent in 1999 and 2.3 percent in 2000. This was due, in part, to the low interest rates on loans that in 1997 had shot up to 30 percent in the wake of the foreign currency crisis. It dropped

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Table 6.1

Korean Economic Recovery, 1998-2002: Select Indicators Indicators:

1998

1999

2000

2001

2002

Annual economic growth rate (%) Inflation: Consumer price increases(%) Interest rate on Call Money end of the year Unemployment rate(%) Foreign Direct Investment (US$ billions)

-6.7 7.5 14.9 7.0 8.9

10.9 0.8 4.9 6.3 15.5

9.3 2.3 5.1 4.1 15.2

3.1 4.1 4.6 3.8 11.3

6.3 2.7 4.2 3.1 9.1

Source: Overcoming a Crisis, Korea Makes a New Leap Forward. Seoul: The Ministry of Finance and Economy, September 2000; Korea's Economy 2003. Washington, D.C.: KEI, 2003; Korea Insight, 5-4 (April 2003), p. 4; www.mofe.go.kr (on Source for Interest rate on Call Money and Foreign Direct Investment, www.nso.go.kr).

to the single-digit level, thereby relieving consumers and companies of a heavy financial burden. Unemployment also registered a high of 8.6 percent or 1. 78 million persons in February 1999, with an annual unemployment rate of 7.0 percent in 1998 and 6.3 percent in 1999. However, government efforts to create more jobs led to the unemployment rate stabilizing at around 4.1 percent in 2000 and 3.8 percent in 2001. As his economic agenda made gains and progressed further, some observers characterized the Kim Dae-Jung administration as the government of the "third way," as in some Western countries. A third-way politician is known to commit him- or herself to "the renewal of social democracy" in terms of what he or she stands for. This term was commonly associated with the British politics of Tony Blair of the New Labour Party or the American "New Democrats" politics of Bill Clinton (Giddens, 1998, 2001). Before being elected president, Kim Dae-Jung had entertained the notion of building a welfare state for Korea. This plan had to be postponed until after the Korean economy that was placed under the IMF trusteeship could be certified as having made substantive progress in carrying out the reform agenda. The welfare state envisioned by Kim Dae-Jung would exhibit the ideas and values of social democracy, with equity and egalitarianism, along the lines of contemporary West European countries after World War II. Three and half years later, in the second half of 2001, the Kim Dae-Jung administration revived this idea of realizing the welfare state vision for Korea, now that the Korean economy was no longer placed in the receivership of the IMP-imposed restrictions. Its better-than-expected economic performance in 2000 led the Korean government to pay back its financial obligation to the IMF six months in advance of its time schedule, in three and half years instead of the full four years. Before discussing the political economy of the Kim Dae-Jung administration in realizing his new vision for Korea, called DJnomics, we will evaluate what progress has been made regarding the IMF mandate on structural reform of the Korean economy.

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The IMF Mandate on Structural Reform Apart from painful short-term adjustments, the Asian economic crisis posed two long-term tasks for governments in the region: financial and corporate restructuring, and redrafting of the social compact. Financial and corporate restructuring proved more difficult because banks and business firms attempted to shift their losses to the government and taxpayers (Haggard, 2000a). The Kim DaeJung administration unveiled its "comprehensive" economic restructuring program, including details on the plan for financial-sector restructuring on May 20, 1998, at the Economic Policy Coordination meeting, which was presided over by President Kim. Korea's economic crisis was triggered by an immediate shortage of foreign exchange reserves, but structural impediments deeply embedded in the Korean economy precipitated the crisis. The banks' reckless lending practices, the corporations' business strategy based on leveraged expansion, and Korea's rigid labor market all contributed to the failure of addressing these structural deficiencies and to make timely adjustments in line with global standards. The IMF rescue plan was involved in easing the immediate liquidity crisis and restoring international confidence. Having resolved, in large measure, the external liquidity problem with the assistance of the IMF and other international financial organizations, the next step for Korea was to carry out long-term structural reform of the economy on financial, corporate, and labor market sectors. It was not surprising that the Korean government, in exchange for the IMF financial bailout, agreed to undertake the structural reform of the economy in four key sectors of financial, corporate, labor, and public-sector reforms. The structural reform agenda, supported by the IMF with a four-year stand-by arrangement, was deemed necessary to deal with the immediate problems and to address the underlying weaknesses of the economy. Given the limited role that market discipline traditionally played in the Korean economy, one of the objectives of the IMF program was to establish a framework that would allow market forces to work more effectively. Although the reform process and restructuring was still going on in 2001 with the completion of the IMF supervision, the policies adopted by the Korean government had worked and been instrumental in the Korean economic recovery from the 1997-1998 crisis (Chopra and Kang, 2001). Financial Restructuring

The financial-sector reforms began by strengthening regulations and the framework for supervisory oversight, starting with the weakest segments (namely the commercial banks and merchant banks), and progressively moving on to the rest of the nonbank financial sector. The BIS became the standard by which the survival and closure of domestic banks were deterrriined. The debt-to-equity ratio of

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8 percent was prescribed by the BIS. The restructuring drive actually began in December 1997 with the government ordering closure of nine nonviable merchant banks that were blamed for taking excessive loans from overseas that contributed to the economic crisis. The FSC was created in April1998 as an independent and consolidated supervisory authority. The Korea Asset Management Corporation (KAMC) was also established to address the problem of nonperforming loans. Under this plan, the FSC closed down sixty financial institutions, five commercial banks, sixteen merchant banks, ten lease companies, and five insurance firms. It required the submission of rehabilitation plans by the twelve banks, which did not meet the BIS capital adequacy ratio. Six weak banks were merged into three. This plan resulted in over 39,000 bank employees, or 34 percent of the banking sector's workforce, losing their jobs (Korea Annual 1999, 1999: 58). The government recapitalized two troubled banks, the Korea First Bank and Seoul Bank, in order to prevent any systemic risk that might result from the bankruptcies of these banks. During the first two and a half years of financial-sector reform, from 1998 to May 2000, the Ministry of Finance and Economy (MOPE) reported that some 448 insolvent financial institutions out of a total of 2,102 were either merged, forced to transfer their assets and debts to others, or went out of business (Republic of Korea [ROK], Ministry of Finance and Economy [MOPE], 2000: 5). The financial institutions as defined in Overcoming a Crisis: Korea Makes a New Leap Forward refer to merchant banks, leasing firms, investment trust, credit unions, and mutual savings. This total included ten banks liquidated out of thirty-three commercial banks listed at the end of 1997. The BIS debt-to-equity ratio ofthese banks rose from 7.04 percent at the end of 1997 to 8.24 percent at the end of 1998 and 10.83 percent at the end of 1999. The rate of dishonored bills went down from 0.38 percent in 1998 to 0.33 percent in 1999 and to 0.16 percent as of June 2000 (ROK, MOPE, 2000: 6). Corporate Restructuring The standard against which to measure corporate restructuring was set by the fivepoints agreement of January 1998 negotiated between then president-elect Kim Dae-Jung and the top five conglomerates. The five points called for raising transparency in corporation management, eradicating debt cross-payment guarantee practices, improving financial structures, closing down noncore businesses, and holding company executives responsible for mismanagement. The actual start of corporate restructuring began in June 1998 with the closure of fifty-five firms, including twenty-two subsidiaries of the top five conglomerate groups. This was followed by these five groups agreeing to clear 11 trillion won of debt cross-payment guarantees by the end of 1998, and to gradually lower their debt-to-asset ratio to 200 percent, by the end of 1999 (Korea Annua/1999, 1999: 57). "Big deals," in which conglomerates were to swap subsidiaries and concen-

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trate on core businesses, were also launched. An initial agreement was reached in seven sectors, including semiconductors, aerospace, and petrochemicals. The Daewoo group, for instance, agreed to take over Samsung Motors in return for giving Daewoo Electronics to the Samsung group, while LG agreed to sell LG Semicon to the Hyundai group. Hyundai and Samsung were to equally own a joint petrochemical venture, while Daewoo and Hyundai would equally divide the shares in an aerospace consortium. Some of these agreements were never carried out because of changing business circumstances, like the impending collapse of the Daewoo conglomerate. The restructuring plans presented by each group in 1998 called for Hyundai to downsize the number of its subsidiaries to thirty-two from sixty-three by the end of 1999, Samsung to forty from sixty-five, Daewoo to ten from forty-one, LG to thirty-two from fifty-three, and SK to twenty-two from forty-nine (Korea Annua/1998, 1998: 57). The real figure has changed with the passing of time, however. Daewoo group, in October 2000, was declared insolvent and its core industry of Daewoo Motors was to be taken over by General Motors of the United States sometime in 2002 after a lengthy negotiation. The Hyundai business group, with the death of its founder Chung Ju-yung in March 2001, began to spin off into several separate and independent groups: the Hyundai automobile subgroup, Hyundai electronics (HYNIX), Hyundai Heavy Industries, and the rest of the Hyundai subsidiaries, including Hyundai Merchant Marine and Hyundai Securities. The corporate-sector reform initially focused on improvements in governance and competition policies. Subsequently, the authorities' attention shifted to financial and operational restructuring aimed at reducing debt levels and strengthening the capital structure of Korean corporations. Measures of financial and corporate restructuring were also formulated in close consultations with both the IMF and the World Bank. The restructuring of corporations was focused largely on separation or dismantling of chaebol subsidiaries. As a result, corporate financial conditions and profits improved, and the average debt ratio of the four largest business groups declined, from 352 percent at the end of 1998 to 173 percent at the end of 1999 (ROK, MOFE, 2000: 6). Companies also restructured themselves to strengthen the transparency of their activities and the accountability of management personnel. Companies listed on the Seoul Stock Exchange, for instance, were now required to appoint directors from outside and also to set up committees of outside auditors. Thirty of the largest business groups were required to issue consolidated financial statements, and they were encouraged to concentrate on core lines of business. Foreigner investment laws regarding bankruptcies and court receivership were revised to simplify the process and to ease restrictions on mergers and acquisitions. More industrial sectors were opened to foreign direct investment, and the ceiling on foreign equity ownership was eliminated. Mergers and acquisitions, both friendly and hostile, were likewise liberalized under this reform plan. The

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following episode of the Daewoo motors dispute in 1999 may not have been an isolated case. When the Daewoo business group declared bankruptcy in November 1999 and its management was placed under government-approved lending agencies, industrial labor disputes intensified over the disposal of Daewoo assets. For instance, striking workers seized a Daewoo Motor plant near Seoul in February 2001, as they defied the government-mediated settlement and refused job layoffs. The striking workers set up barricades in the plant sites and confronted the combat police (Korea Herald, February 21, 2001). In the end, the police crushed Daewoo Motor's labor resistance. The company had to lay off more than 1,700 workers and prepare for a possible sale to a foreign investor. In 2000, General Motors reportedly made an unsuccessful bid by offering $3 to $4 billion, but Daewoo's market value had dropped. Rumors circulated of a selective sell-off that meant auctioning off the Daewoo company in parts (Kirk, 2001). In April 2002, General Motors announced a $400 million deal to take over three auto plants from Daewoo Motor. Labor Market Restructuring

Labor-sector reform benefited greatly at the initial stage from the broad support by the public and effective political leadership. As a result of efforts to improve labor-management relations, the flexibility of the Korean labor market was enhanced. The tripartite commission of labor, management, and government was formed in early 1998 as noted in Chapter 5. Even though it lasted for only one year, it proved to be useful as a vehicle for generating social consensus and support for the government's reform program in the face of economic hardships. The commission helped to improve labor market flexibility by facilitating agreement on layoffs and wage cuts. The government promised, in return, to establish a social safety net that would limit the rise in poverty and help retrain workers. Having the presidential election in December 1997 helped enable this social compact and foster consensus. The election allowed the new government to start with a fresh mandate to implement its economic reform program (Chopra and Kang, 2001: 6). In May 1999, legal status was given to the tripartite commission and it held three sessions to work out key agreements on amending the labor law. The new labor law enacted on February 6, 1998, for instance, legalized mass corporate layoffs of workers in exchange for firms' legal obligations for due process. This included companies' notifying the union and workers sixty days before dismissals and reporting them to the Labor Ministry. Companies were allowed to reassign employees to another work site, giving them more leeway in controlling the size of their workforce. Dismissed workers were granted priority when the company started rehiring, and working hours were reduced, when needed, to minimize layoffs. The gov-

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ernment guaranteed a sixty-day minimum wage payment for dismissed workers, with a promise for expansion of the employment fund. The political activities by union members were also legalized (Korea Annual 1998, 1998: 59). Organized labor continued to present problems, as the above-mentioned episode illustrates. In February 2001, as already noted, the striking workers seized a Daewoo Motor plant near Seoul as they defied the government mediated settlement and refused job layoffs. The striking workers set up barricades in the plant sites and confronted the combat police (Kirk, 2001). 6 Reform in the Public Sector Public-sector reform has to do with downsizing and reorganizing the ROK government ministries and agencies to achieve maximum efficiency. In 2000, the Kim Dae-Jung administration announced the measures of privatizing and improving the management of state-owned enterprises. As a result, in the central government, the reform abolished or reduced the size of 16 offices, 74 bureaus, and 136 divisions. As of August 2000, twelve public corporations were sold to the private sector. New regulations for public corporations were introduced, requiring them to enhance management transparency and employ presidents on a contract basis. The government began closing a number of its offices to eliminate 60,000 positions by the end of 2001. It announced, in August 1998, a plan to privatize or restructure some 108 state-owned enterprises involving 210,000 workers. Under a government plan, 38 of 108 public organizations were to be completely privatized. Another thirty-four would be gradually transformed into private institutions and six public subsidiaries were to be merged. By 2001, 133 institutions directly or indirectly invested in by the government would be reduced to 106 (Korea Annuall999, 1999: 58). By the end of2000, five enterprises were identified for privatization, including the state-invested Pohang Steel Corporation. Government shares in Korea Heavy Industries, Korea Telecom, and the Korea Tobacco and Ginseng Corporation were also on the sale list. The plan to privatize the Korea Electric Power Corporation, despite the strong labor opposition and a pro-labor segment in the National Assembly, was also promoted by the ROK government. In February 2002, the KCTU members staged a one-day nationwide general strike to protest government plans for privatizing selected public corporations. This resulted in the railway stoppage, Gas and Electric Company workers' sporadic strikes, and disruption in telecommunication service. 7 As a result of these reform measures, there was progress in the sale of Korean companies to foreign buyers. For instance, in 2002 the KAMC reportedly sold 1.03 trillion won ($886.4 million) of nonperforming loans to the U.S. firm Lone Star Fund. Seven international and domestic firms, including Goldman and Sachs, participated in the bidding. But Lone Star won an open bid for the loans at a cost of 524.9 billion won, roughly 50 percent of the loans' value (Korea Bi-weekly,

200 CHAITER 6

vol. 18, February 2002). Public-sector reform remained controversial but made headway, with the Korean economy experiencing a strong recovery. These attempts of the Kim Dae-Jung administration of Korea's Sixth Republic, subsequent to the 1997-1998 Asian financial crisis, illustrated the difficult but successful policy response by a democratic state in carrying out the structural reform of the economy. The financial- and corporate-sector reforms, in the short run, could be looked at to see how the government was able to cope with the moral hazard dilemma. The judgment on the long-term viability of the structural reform can only be ascertained with the passage of time. Problems still remained because the government bailout of the failed businesses raised the question of moral hazard. Why should the government be expected to render financial assistance to failed businesses by using tax money, especially when the business bankruptcy resulted from the firm's mismanagement and/or downturn in a business cycle? Also, the IMF bailout of the national economies, such as emergency loans to several Asian countries, including Korea, raised another question of moral hazard. Why should foreign governments and international institutions be expected to provide assistance to failed national economies, such as that of Russia in 1998? D]nomics: Mass-Participatory Economy, Welfare State, and Knowledge State While pursuing the tasks of economic recovery and structural reform, the Kim Dae-Jung administration was also set to reckon with the competitive nature of the world economy. That was a fact of life in the new era. As President Kim noted, "the information revolution is transforming the age of many national economies into an age of one world economy, turning the world into a global village" (D. J. Kim, 1999b). To better prepare for the coming of the knowledge state, the Kim administration stepped up construction of a knowledge-information infrastructure by launching a new Three-Year Development Plan for a Knowledge-Based Economy. Under this plan, the government would promote training of professionals and education in information technology. The major vehicles for implementing the national efforts included the Basic Plan for the Promotion of the Information Capabilities of the National Economy, Cyber-Korea 21, and the Council for Information Strategies. Under this plan, utilization of information technology was encouraged with a view to turning every citizen into a "new intellectual" or innovator. In this connection, development of small- and medium-sized industries and venture-capital businesses was given particular support and emphasis because, according to the MOFE report, "they are a primary source of jobs and can produce high value-added products and services" (2000: 10). The Presidential Commission on the New Millennium was inaugurated in 1998 along with the expectations and the charge that the Kim administration

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would promote the agenda identified in his inaugural address. This commission was to lay the foundation for the Korean people to build a democratic state that would bring about a welfare society of wealth and prosperity as well as a just society that would uphold basic human rights and the liberty of the people. This body was entrusted with the responsibility for charting a grand strategy for policy guidelines and implementation to cope with the globalization challenges. The commission submitted its recommendation in January 2000 (Im et al., 2000). The notion of Kim Dae-Jung's desire to establish a welfare society and the welfare state for Korea was manifest in some of the earlier writings and addresses made during Kim's political career as an opposition leader. In his book Mass-Participatory Economy: A Democratic Alternative for Korea (1985), Kim offers limited criticism of what he calls "imbalances" of economic growth that resulted from the development strategies pursued by the then incumbent administration of President Chun Doo-Hwan and his predecessors. Kim notes that "[b]ehind the fa~ade of rapidly growing exports and aggregate production level, serious imbalances-between industrial sectors, between regions, among income groups, and between large and small firms-have emerged during the past two decades, these imbalances are worsening each year. Unless these imbalances are corrected, growth in aggregate output alone will not bring about economic development in Korea" (1985: 1). The gist of what was called DJnomics, also noted in an updated version of his earlier book (1996), was to balance what he called "three major objectives: growth (efficiency), equitable distribution of income, and price stability" (1996: 2). Kim recognized that these three objectives might often conflict with one another. But, because a unilateral imposition of one particular leader's preference could only result in public discontent, Kim insisted that "the three objectives must be balanced by full participation of the masses [and] that is the goal of my program for Mass-Participatory Economy" (ibid.). He actually campaigned on the theme of promoting a "mass participatory economy" during the 1971 presidential campaign against the incumbent President Park Chung-Hee. In 1999, Kim Dae-Jung advocated what he called a "productive welfare" concept. In a speech he made to celebrate Korea's fifty-fourth Liberation Day, Kim declared that he would implement a policy of productive welfare that would "maintain individual dignity and raise the living standards of all Koreans" (Korea Herald, August 15, 2000: 1). This so-called new paradigm for productive welfare in Korea, dubbed "DJ Welfarism," included the key concept that welfare was tied to respect for human rights, the right to work, and social integration. These measures, according to Kim, would bring about "balanced" development and relationships among democracy, market economics, and productive welfare. The concept of "productive welfare" as the foundation of DJ Welfarism was derived from the experience of the Korean economy moving "from unbalanced to balanced development during [my] administration and also overcoming the eco-

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nomic crisis through promotion of 'social integration'" (D.J. Kim, 1999a). In short, building a welfare state and society for Korea was the vision for the Kim Dae-J ung administration "to achieve a more fair distribution of wealth and to improve relations among all strata of society." The concept of "productive welfare" suggested the way to attain the vision along with the principles of democracy and market economics (xv). One year after his inauguration, an international conference was held in Seoul on the topic of"Democracy, Market Economy, and Development." As a joint sponsor with the World Bank, the Seoul government invited many international dignitaries, including Amartya Sen, the 1998 Nobel laureate in economics, and five former heads of state and prime ministers. A concurrent academic conference was held to address such issues as values, the rule of law, governance, economic development, and political economy of reform. In his opening address, Kim Dae-Jung reiterated why "a paradigm shift toward a parallel pursuit of democracy and a market economy" was best suited as an approach to redevelopment. He notes that"[ w]ithout democracy, we cannot expect development of a genuine market economy under fair and transparent rules of competition. I have long believed economic growth achieved under conditions of political repression and market distortion is neither sound nor sustainable. I believe democracy and a market economy are like two wheels of a cart, and that both must move together and depend on each other for forward motion" (1999b). Kim Dae-Jung also notes that as "a globalized economy has emerged, ... no single nation can be safe or free from the vicissitudes of the world economy" and that therefore "it is necessary for nations to cooperate as well as compete" in that globalized economy (D.J. Kim, 1999b).

Kim Dae-]ung's Vision for the New Millennium Two and half years later, on October 13, 2000, the Norwegian Nobel Committee announced its decision to award the 2000 Nobel Peace Prize to Kim Dae-Jung for "his work for democracy and human rights in South Korea and in East Asia in general, and for peace and reconciliation with North Korea in particular." He was also praised for seeking, as president, "to consolidate democratic government and to promote internal reconciliation within South Korea." In his acceptance address and Nobel lecture, delivered on December 10, 2000, Kim stated that democracy is the absolute value that makes for human dignity, as well as the only road to sustained economic development and social justice.... Without democracy the market economy cannot blossom, and without market economics, economic competitiveness and growth cannot be achieved. A national economy lacking a democratic foundation is a castle built on sand. Therefore, as President of the Republic of Korea, I have made the parallel development of democracy and market economics, supplemented with a system of productive welfare, the basic mission of my government. (D.J. Kim, 2000: 4)

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In his view, the twenty-first century will be "the knowledge and information age" that promises to bring about enormous wealth as well as "the danger of hugely growing wealth gaps between and within countries." Therefore, Kim was determined to "strive to deal with the new challenge" to democracy, human rights, and peace "with steps to alleviate the information gap, [and] to help the developing countries and the marginalized sectors of society to catch up with the new age" (D.J. Kim, 2000: 4). The final report of the Presidential Commission on the New Millennium, released in January 2000, contains a number of bold and imaginative recommendations that if fully implemented could make a difference in terms of enhancing the quality of life and welfare of the Korean people in the future. To begin with, the report identifies three major achievements of the past era by the preceding administrations that could serve as the foundation for subsequent works: rapid and successful state building, compressed industrialization, and political democratization. Once due credit is given, the report continues to identify five major "unfinished" tasks that Korea faces under the Kim Dae-Jung administration: continuation of a divided nation-system; the so-called three negative politics legacy, that is, political disharmony, nontolerance, and nonproductivity; low-efficiency policies; low-trust society; and defensive nationalism (lm et al., 2000: 66). The report turns to the future agenda of what Korea could strive for as a set of "grand visions" and how to get "from here and now to there" in terms of "strategies" and means of implementation. The objective, according to the report, should be one of building a "world-class Korea" in the new millennium. The five building blocks that would constitute the pillars of the world-class Korea would be, according to the report, a plural democracy, a dynamic market economy, a cooperative communitarian society, a creative knowledge-information intensive state, and Asia's "hub" state status for Korea (lm et al., 2000: 66). Ten specific sets of strategies or methods of attaining these "grand visions" are also identified: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Productive and harmonious politics Proactive government reform and renovation Sustainable economic reforms Knowledge-information-based educational innovation Productive social welfare system Democratic civil society and citizen activism Cohabitable environmental commons Cultural pluralism Peaceful North-South Korean integration Proactive global arena participation (lm et al., 2000: 92, 91-164)

These are a set of ambitious goals and bold designs that provide guideposts and road maps. They are wide ranging, from the realm of politics (items 1 and 2) and

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economy, welfare, and environment (items 3 through 7), to culture (item 8), unification (item 9), and foreign relations (item 10). These visions for the new millennium are a reflection of age-old desires and aspirations of the Korean people that seem to represent a consensus among the intellectuals and elites in Korean society. The new millennium, which is represented by the twenty-first century, has now dawned. It is no surprise that the presidential advisory group appointed to study Korea's place in the world, together with the impact of globalization, was named "the Presidential Commission on the New Millennium" and that President Kim Dae-Jung's ruling political party both inside and outside of the National Assembly was named the "Millennium Democratic Party." Beyond "Third Wave" into "Third-Way" Politics? The "third-way" politics reflects an attempt to go beyond the third wave of democratization politics in new democracies as well as the "first-way" and "secondway" politics during the Cold War era. Whereas first-way politics would refer to the state management of the economy, second-way politics was about the neoliberal economics reaction to statist planning and government management of the economy during the 1970s and 1980s. The first two "ways" that had dominated political thinking during the Cold War era were said to have failed or lost their appeal. The first-way politics of traditional socialist ideas, whether radical or reformist, was based on the notion of economic management and planning, whereby a market economy was considered essentially "irrational" and "refractory of social justice" (Giddens, 2001: 2). Today, socialism as a theory of the managed economy has largely been dissolved in the West. The capitalist "developmental" state, as pioneered by Japan and emulated by East Asia's newly industrializing countries like authoritarian South Korea, has also been discredited in East Asia. The second-way politics of neoliberal economics or market fundamentalism, which is represented by Reaganomics and Thatcherism, has also been discarded even by most of its conservative and rightist supporters. The East Asian economic crisis of 1997-1998 showed how unstable and destabi)jzing unregulated world financial markets could be, bringing about economic havoc in the marketplace. The return of left-of-center parties to government, like Tony Blair's Labour Party in England, sent a clear signal that people did not want to be left unprotected in the face of the global marketplace (Giddens, 2001: 2). The election of Kim Dae-Jung to the presidency, in the midst of the 1997-1998 economic crisis, could be interpreted as the Korean voters desiring to protect themselves from the harsh reality of the world market. Third-way politics, according to Anthony Giddens, was about "the new left-ofcenter thinking" regarding how the government and society should respond to changes and transformations that were altering the landscape of politics, such as

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globalization, the emergence of the knowledge economy, and profound changes in people's everyday lives (2001: 3). The influence of globalization was manifested by the expanding role of global financial markets, new developments in electronic communication, and geopolitical transitions, like the ending of the Cold War. Information technology, like the Internet, has brought about the knowledge economy that is changing economic processes of production and distribution, with the social consequences of a new occupational and class structure. The rise of individualism breaking free from the hold of tradition and custom is also felt in terms of the family and gender relations, whereby women have now entered the labor force in large numbers and have acquired new freedoms (4-5). The Kim Dae-Jung administration claimed that its "government of the people" achieved six major tasks during the first three years ( 1998-2000) of its five-year term: 1. 2. 3. 4. 5. 6.

The engagement policy toward North Korea A political reform agenda toward "productive politics" and a "just society" Economic reform and structural adjustments Knowledge-based economy Corruption-free, transparent, and trustful society Active globalism policy via open nationalism (Im et al., 2000: 87-89)

The listing of these alleged accomplishments, however, actually represents more of a menu of choices than proven facts. Some of these claims are more a statement of intention than an actual accomplishment. The political reform agenda (item 2), for instance, was to be attained via rigorous measures of overcoming regionalism, introducing proportional representation and a middle-sized electoral district system, enacting basic human rights laws, revising of the national security law and political funding law, and enacting anticorruption laws. These measures of political reform were far from being realized because the presidential party lacked a simple majority in parliament and its coalition with the United Liberal Democrats (ULD) was not working as well as expected on certain sensitive issues, like electoral reform and national security issues. Other measures, like enhancing economic efficiency through reform in the corporate, financial, labor, and public sectors (item 3) and promoting knowledge industries through venture capital, tourism, and information services (item 4), were all continuous, ongoing processes that had been launched but were inconclusive in so far as their success or failure in outcome were concerned. Also, the engagement of North Korea through the "sunshine policy" (item 1), and active globalism and "open nationalism" by introducing global standards in such areas as education and environment issues (item 6) were complex in nature. These two items require time and patience before the results are to be known. Finally, constructing a "corruption .. free, transparent, and trustful society" through the promotion of fair taxation,

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social welfare programs, and a safety net (item 5) reflected Kim Dae-Jung's political campaign pledges to build a welfare state for Korea, which was inspiring but remained as an ideal rather than a proven reality in Korea. In the second half of its five-year term, the Kim government promised continuation and completion of restructuring in the four major sectors. In addition, five policy goals, called "economic policy orientation during the second half of the Kim administration," were set as follows: completion of four structural reforms, knowledge-driven economy, uplifting middle-class families' incomes, balanced regionalism, and economic cooperation internationally and with North Korea (ROK, MOFE, 2000: 12-15). Although most reform measures for businesses were undertaken, what was important from then on was, according to MOFE, "to make sure that they comply with the new rules faithfully." The government was to keep an eye on "whether the ostensible organization changes will lead to actual democratization and efficiency of management" on the part of business corporations. The government would also encourage "constructive cooperation and productive compromises" in labor-management relations (13-14). In addition to the government plans for the development of a knowledge-driven economy, the Kim administration promoted helping the upward mobility of middleand low-income families while striking a balanced development between Seoul and the regions outside the capital city. The social safety net would be solidified through job training for the vulnerable and income tax deductions for wage earners. Social insurance plans like the national health insurance plans would be integrated to increase their efficiency. A system of direct distribution of farm products would link producers and consumers, and contract farming would ensure the promotion and sale of agricultural products. Finally, the administration's housing policy goal was to enhance the home ownership rate, raising it from 93.3 percent in 1999 to 100 percent by the end of 2002, an unlikely target to meet. To develop provincial areas on a sustained basis, the government also pledged to provide incentives to businesses and banks to set up their headquarters in provincial towns. The government would provide special support to the various industrial centers that developed within provincial cities. It would also revamp the education system, so that local schools and colleges would play a central role in planning the economic and cultural life of their communities (ROK, MOFE, 2000: 14-15). Finally, the Kim administration committed itself to promoting international economic cooperation and inter-Korean relations by avoiding "duplicated and lopsided investments in North Korea" and supporting an "open and liberalized international market conductive to strengthening the competitiveness and efficiency of all nations" (ROK, MOFE, 2000: 15). Free trade agreements between Korea and other countries would also be pursued and unlimited foreign exchange transactions would be instituted. If all these proposed measures had been realized, Kim's third-way politics would have been a landmark achievement, but time was running out before Kim's term came to an end in February 2003.

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Marking the first day of his fourth year in office, President Kim Dae-Jung publicly noted that only about "half of his efforts have been successful" thus far in the three years of his administration. Also, stressing the point of"his regret over the government's inability to root out the problem of corruption," Kim indicated that during the remaining two years of his five-year term in office his administration would focus on solving this problem (Choson Ilbo, February 26, 2001). 8

The Logic of a Competitive State in the IMF Era The negative fallout from the 1997-1998 financial crisis, which wiped out the economic gains of South Korea's NIE, did not last beyond 1999 due to the financial bailout by the IMF and the successful economic recovery programs undertaken by the Kim Dae-Jung administration. In pursuing the IMP-mandated agenda of structural reform, the Korean government relied on what the World Bank chief economist called the "comprehensive development framework" (Stiglitz, 1999). Economic development is identified as a "complex" process that requires a transformation of society beyond trade liberalization or macroeconomic adjustme'lt (Gilpin, 2001: 333). The challenge to the Kim Dae-Jung administration was to enable the Korean economy to be competitive in the globalized world marketplace but to move away from the earlier developmental state toward the competitive state in the post-IMF era of the world economy. The concept of the "competitive state" has emerged from the notions that competitiveness refers to "a nation's ability to renew itself' and that it is firms, not states, that compete internationally (Gilpin, 2001: 182; Eliasson, 1988; Krugman, 1994a: 28--44). The competitive state concept also incorporates the fact that firms are increasingly mobile as they seek the most attractive locations in the global economy, that governments cannot pick winners, and that the choice of technologies must be left up to the private sector (Gilpin, 2000; Reich, 1991). In a "competitive state," governments are expected to be active, and matters of strategic decision on national economy should not be left to the market alone (Gilpin, 2001: 183). A "competing nation" attempts to strengthen the position of its firms in the global economy, as Vincent Cable notes, and attract foreign investment through the creation of a pool of highly educated, flexible workers; an efficient physical infrastructure; sound economic policies; and an attractive quality of life (1995: 48-50). Singapore, the United States, and several west European countries have adopted this strategy to their advantage.

Neoliberal Economics and the Role of the State in Economic Development The theory of the developmental state arose in the late 1980s and early 1990s to challenge the classic and neoliberal economics orthodoxies in explaining the rapid industrialization of the East Asian NIEs. The economic success of Japan and other

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East Asian countries like Korea and Taiwan was attributed to the adoption of the developmental state model in which the state played the central role in guiding economic development and had to lead rather than follow the market (Wade, 1990; Evans, 1995). The neoliberal interpretation of the economic success of East Asian NIEs takes issue with developmental state theory. It says that these East Asian economies had pursued "market conforming" economic development strategies: market, rather than government, policies had determined the path of development. A policy debate on turning Korea into a competitive state in the global market, as a way of revitalizing the Korean economy in the post-IMF era, can proceed within the context of this theoretical debate between the two contending schools on East Asia's economic growth. Theories of the developmental state argue that the governments of East Asian NIEs devised an array of incentives that encouraged private investment in strategic industries. Also, through a variety of policy measures, these governments played a key role in creating an entrepreneurial class (like the state favoring a particular chaebol), identified critical economic areas for development, and targeted strategic industrial sectors to become more efficient and competitive internationally. The policies of these governments deliberately got prices "wrong" in order to change the behavior of firms (Amsden, 1989). These state policies were instrumental in developing an industrial and economic structure that would not have arisen merely in response to market signals. The main finding of the World Bank report East Asian Miracle (1993), for instance, is that there would not have been an East Asian miracle without these economies fostering such economic fundamentals as high rates of savings/investment, education, and prudent macroeconomic policy (1993). The report reaches three main conclusions about the neoliberal analysis of certain limitations of the developmental state. First, industrial policies to promote particular sectors failed to explain the region's rapid growth because "state intervention was ineffective at best and counter-productive at worst." Second, market forces by themselves, even without public-sector intervention, would have brought about the changes in industrial structure. Third, government controls of financial markets, according to the report, had lowered the cost of capital and directed credit to favored sectors. This last point seems to have been an error because, in the light of the 1997-1998 Asian financial crisis, it was "ironic that the Report had praised governments' intervention in financial markets" (Gilpin, 2001: 325). The neoliberal economics interpretation presented by the 1993 World Bank report is not without controversy, therefore, generating criticism from both pro and con points of view. Some neoclassical economists believe that the report errs in giving even minimal credit to East Asian governments for promoting rapid economic development. These proponents of the developmental state denounce the report as "blatantly ideological" by reflecting the laissez-faire bias and position of the United States and the interests of private capital. The authors of the report,

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according to its critics, "deliberately played down their own findings regarding the important role of the state and of industrial policies in expediting rapid industrialization and the crucial role of public financial institutions" (Gilpin, 2001: 325). Critics argue that growth processes were more complex, in that "there can be no single explanation" and that the report's "considerable emphasis on factor accumulation was inappropriate." Critics also find flaws in the report's assumption that one can "disentangle macro basics or fundamentals-investment, education, exportsfrom micro foundations, or supporting sociopolitical institutions." Critics also charge that "fundamentals and institutions cannot be separated from one another" because "a high savings rate does not just happen but is the result of government policies and financial institutions" and the growth process becomes complex when one factors in domestic policies and institutions (Gilpin, 2001: 325-326). The national system of political economy, with its own ideology, private business practices, and public institutions, exists in the real world of nationstates, rather than in an abstract notion of market economies that neoliberal economists tend to emphasize. Likewise, there is no single East Asian economic model. Instead, each country's economic and political institutions have set the East Asian economies apart and produced their own economic fundamentals unique to the nation. It is unrealistic to assume that East Asia's economic fundamentals have been put into place without specific developmental state or certain sociopolitical institutions. The economic fundamentals and the developmental state are therefore closely interrelated. The relationship between exports and growth, for instance, is more complex because it is not only a matter of economic fundamentals. An increase in exports stimulates economic growth, as neoclassical economists assume, but economic growth also causes export expansion, as proponents of the development state will argue.

Domestic Political Constraints in the IMF Era In the IMF era, the Korean economy was mandated to undergo restructuring of its economy. The government policies of reform would be possible and effective only to the extent that domestic political support was available through legislation in the National Assembly. Because of the minority status of Kim Dae-Jung's ruling party in parliament, the National Coalition of New Politics (NCNP), the Kim administration experienced difficulties from the outset in pushing reform measures through the National Assembly that required legislative enactment. During the first six months in 1998, the major reforms were not carried out in a timely fashion and failed to materialize for lack of political support and partisan compromise. Fortunately, the National Assembly had already enacted a total of thirteen financial reform bills during December 1997. This enabled the incoming Kim Dae-Jung government to identify four specific areas of economic reform and

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to direct its primary efforts to each of these areas: financial, corporate, labor, and public enterprise sectors. The coalition government came into being with the second minority party of the ULD as a junior partner. This produced a ruling majority in parliament whereby the prime minister portfolio was given to the ULD, not to the ruling NCNP. An attempt was made to give the ruling coalition a more permanent base by creating a new united party. But this plan did not succeed in 1999. It was timed with the launching of campaigns for the forthcoming National Assembly election in 2000. Finally, the NCNP members only created a new ruling Millennium Democratic Party (MDP), without participation by the coalition partner ULD members. In the general election for the sixteenth National Assembly held on April 13, 2000, the ruling MDP again failed to secure a majority in parliament. By winning only 35.9 percent of the popular votes, the MDP placed behind the main opposition Grand National Party (GNP), with 39 percent, but ahead of the ULD, with 9.8 percent. Under the new legislation, which reduced the number of seats in the National Assembly from 299 to 273, the ruling MDP received only 115 seats (district 96, proportional 19), while the main opposition GNP won 133 (district 112, proportional21), and the ULD only 17 seats (district 12, proportional5) (Ha, 2001: 32). The April 2000 election could be interpreted as a referendum on Kim DaeJung's performance in bringing about economic recovery and restructuring reform. It also revealed the persistent problem of regionalism in Korean politics, especially between the Yongnam (Kyongsang) in the southeast and Honam (Cholla) in the southwest. The GNP won sixty-four out of sixty-five seats in Yongnam, while the MDP won twenty-five out of twenty-nine seats from Honam (even the four noncommitted members elected later joined the MDP). Such regionally based election results made it difficult to undertake issue-based analysis and to identify social bases for reform policies (Ha, 2001: 33). The ruling coalition of Kim Dae-Jung's MDP and Kim Jong Pil's ULD was created, once again, in the National Assembly. The new ULD president Lee Han-dong was made prime minister. But this arrangement broke down fifteen months later over policy differences toward North Korea. The ULD members sided with the opposition GNP to pass a vote of no confidence over a key cabinet member, unification minister Lim Dong-won, who was in charge of the government's sunshine policy with North Korea. The National Assembly, on September 3, passed a no confidence motion by 148 to 119 votes. Instead of dissolving the cabinet, President Kim kept Lee as prime minister. By then, Lee was no longer a member ofthe ULD. The September 2001 political crisis was triggered by domestic policy differences. But increasingly the South Korean state was caught up in more complex foreign policy and economic issues unleashed by the onrush of forces of globalization in the world economy. Today's economic globalization, or global political economy, is subject to influence by several dominant features that are noticeable in the new theory and practice of the world economy. These are:

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• Victory of democratic capitalism over authoritarian socialism, with an end to the Cold War era • Triumph of neoliberal economic theory and the market system over neomercantilism or neo-Marxian dependency economic theories and practices • Technological revolutions in transportation and communication that led to the rise of the information and Internet economy The neoliberal market-oriented economic theories and ideologies associated with these new developments have promoted the policies of government deregulation, privatization, and a decreased role for the state in the economy. Since these changes have come to be associated with globalization or "economic" globalization in the post-Cold War years, we will tum next to examine the globalization-competition paradox and its impact on and implications for the changing role of the Korean state.

Globalization-Competition Paradox When the South Korean economy graduated from the IMF mandate in August 2001, six months ahead of schedule, the Kim Dae-Jung administration launched a new Three-Year Development Plan for a Knowledge-Based Economy. While promising to continue the policy agenda of structural reform, as the preceding discussion has noted, it also wanted to make the Korean economy competitive in the world marketplace. When the economic reform agenda were successfully achieved, the Korean economy in the post-IMF era was expected to become more efficient and competitive in the world marketplace. As a result, the Korean state would change its complexion as well, transforming itself from a developmental state to a competitive state (or what Philip Cerny [1997] calls competition state). For the purpose of the present discussion, the terms of "competitive state" and "competition state" will be used interchangeably. The competition state is expected to emphasize "strategic complementarity" with respect to investment and the problem of coordination. This is because, contrary to neoliberal economics, competitive state theory argues that economic development cannot be left to the market alone and the state must continue to play a key role in starting and managing the process of economic development. In Development, Geography, and Economic Theory (1995), Paul R. Krugman argues that economies of scale and imperfect competition were missing from development theory and that without these two central ideas, the theory and policies for economic development could not be sustained (Gilpin, 2001: 328). Development theorists did recognize the need for economies of scale at the plant level, in order to give a less developed economy the comparative advantage it needed for economic development and international competitiveness. However, these theorists ignored the importance of scale economies and of imperfect competition at the national level. Economic development requires promoting "strategic complementarity" through investment decisions, so argues Gilpin, "supporting

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domestic firms until they achieve scale economies in their production, and breaking the vicious cycle of poverty in which the LDCs have been trapped" (328). These tasks require the guiding hand of what a "competition state" is expected to provide. The rise of the competition state is unavoidable, according to Cerny, in the age of political globalization. Globalization has led to a situation whereby the playing field of politics is not only determined within insulated units of the sovereign nation-states, but also is derived from "complex congeries of multi-level games played on multi-layer institutional playing fields," which are "above and across, as well as within, state boundaries." Political globalization thus involves reshaping political practices and institutional structures so as "to adjust and adapt to the growing deficiencies of nation-states as perceived and experienced by such actors" (1997: 253). At the heart of political globalization is, of course, the transformation of the nation-state from the welfare or developmental state into a competition state that reinvents and redefines the proper role of the state in the globalized marketplace. In seeking to adapt to a range of complex changes that result from political globalization in cultural, institutional, and market structures, both state and market actors are attempting to reinvent the state as a "quasi-enterprise association" in a wider world context. This process, according to Cerny, involves three central paradoxes. The first is the paradox that the process does not lead to a simple decline of the state but to an actual expansion of de facto state intervention and regulation in the name of competitiveness and marketization. The second paradox is closely intertwined with the first in that state actors and institutions are themselves promoting new forms of complex globalization, in their attempt to adapt state action to cope more effectively with what they see as global "realities." The third is the paradox that the development of this new political terrain, in turn, hinders the capacity of state institutions to embody the kind of communal solidarity (or gemeinschaft) "which gave the modern nation-state its deeper legitimacy, institutionalized power and social embeddedness" (Cerny, 1997: 251). The political globalization has enabled the transition and transformation of the nation-states from the welfare state to the competition state. Based on the experience of the advanced industrial democracies, such as the United States and Great Britain, Cerny explains how the state transformation took place during the Reagan and Thatcher eras in the 1980s. The essence of the post-World War II national welfare state "lay in the capacity which state actors and institutions had gained, especially since the Great Depression, to insulate certain key elements of economic life from market forces while at the same time promoting other aspects of the market" (1997: 258). These mechanisms did not merely mean protecting the poor and helpless from poverty and pursuing welfare goals like full employment or public health, but also regulating business in the public interest, "fine tuning" business cycles to promote economic growth,

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nurturing "strategic industries" and "national champions," integrating labor movements into corporatist processes to promote wage stability and labor discipline, reducing barriers to international trade, imposing controls on "speculative" international movements of capital, and the like. (258-259) The expansion of these economic and social functions of the welfare state was seen to be a crucial part of the process of social, economic, and political modernization for any "developed" or developing countries. The transformation of the nation-state into a "competition state" therefore lies at the heart of political globalization, according to Cerny (Cerny, 1997: 251). But in the age of political globalization this compromise of domestic regulation and international opening was eroded by increasing domestic structural costs, like the fiscal crisis of the welfare or the developmental state, as well as the structural consequences of growing external trade and international financial transactions. The ensuing crisis of the welfare states lay in their decreasing capacity to insulate national economies from the global economy and the combination of stagnation and inflation that resulted when they tried. Since the arrival of political globalization, however, the world has seen the emergence of a quite different beast, the competition state. Instead of attempting to "take certain economic activities out of the market, to 'decommodify' them as the welfare state was organized to do, the competition state has pursued increased marketization in order to make economic activities located within the national territory, or which otherwise contribute to national wealth, more competitive in international and transnational terms" (Cerny, 1997: 251). The main features of this process in the United States and Great Britain have included "attempts to reduce government spending in order to minimize the 'crowding out' of private investment by state consumption, and the deregulation of economic activities, especially financial markets" (Cerny, 1997: 359). The result has been the rise of a new discourse and practice of "embedded financial orthodoxy," which is in turn shaping the parameters of political action everywhere that perhaps culminated in the Asian financial crisis of 1997-1998. These transnational development and multilevel games in political globalization have forced four specific types of political change to the top of the political agenda of leadership. Cerny lists four types of shifts taking place for the role of the competitive state in the era of political globalization: 1. A shift from macroeconomic to microeconomic interventionism, as reflected in both deregulation and industrial policy 2. A shift in the focus of that interventionism from the development and maintenance of a range of "strategic" or "basic" economic activities to one of flexible response to competitive conditions in a range of diversified and rapidly evolving international marketplaces, that is, the pursuit of "competitive advantage" as distinct from "comparative advantage"

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3. An emphasis on the control of inflation and general neoliberal monetarism -supposedly translating into noninflationary growth-as the touchstone of state economic management and interventionism 4. A shift in the focal point of party and governmental policies away from the general maximization of welfare within a nation (full employment, redistributive transfer payments, and social service provision) to the promotion of enterprise, innovation, and profitability in both the private and public sectors. (1997: 260) All of these changes and shifts in the policies of the competitive state are associated with the rise of political globalization. Globalization, in short, constrains state autonomy and capacity to act decisively. As economic globalization has forced the state to become a competitive state, the interventionist role of the developmental state in the market is declared to be less efficient and nonproductive. The Korean state is likewise placed under the pressure of economic globalization and is expected to move away from the welfare state toward a competitive state in its economic adjustment and adaptation in the era of globalization. The Korean state has thus emerged to become a competitive state in the post-IMF era, but is struggling to move away from its historical role and the legacy of the developmental state in the pre-1998 years. Joseph Stiglitz (2002) has written a rare behind-the-scenes account of the world economic turmoil and the IMF rescue plan of the Asian economies. The winner of the 2001 Nobel Prize for economics and the former chief economist at the World Bank, Stiglitz argues that the IMP-imposed austere policies exacerbated each area's problems between 1997 and 2001, whether they were East Asia's problems, including South Korea, or Russia's financial problems. He adds that public institutions must be encouraged to reform in more transparent and responsive ways to meet their constituents. The Politics of Gridlock and Collective Action

Economic globalization will have significant consequences for the logic of collective action with regard to the state role in political economy, especially the ways in which the Korean state is operating both domestically and internationally. It has made the Korean state not only more "competitive" in the name of carrying out IMPimposed structural reform of the economy, but has also made South Korea cope with the more fundamental questions of the Korean economy going through a shift from the second industrial revolution (manufacturing goods and exports) to the third industrial revolution associated with a knowledge-intensive and Internet economy. In the process of adjustment to the requirements of economic globalization in the post-IMF era, the Korean state under the Kim Dae-Jung administration confronted political stalemate and stagnation toward the end of its five-year term in 2003, a political situation generally known as the politics of gridlock.

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The lame-duck phenomenon in Korean politics is partially a structural problem rather than one that can necessarily be overcome by incumbent leadership. 9 The built-in strength and weakness of a presidential system based on direct and popular election accentuates the political problem for Korea's new democracy. Generally speaking, effectiveness has less to do with resolve and determination than with the capability of the individual leaders. Under such circumstances, both domestic and international agendas are likely to capture the political attention of the public, and the chief executive is blamed for the success or failure of implementing these policies and programs domestically. The challenge for the president is to harmonize democracy and development and, internationally, to reconcile globalization and democracy. The success or failure of Korea's new democracy will depend largely on the nature and type of political system and institutions as well as the ways in which they are put into effect in practical politics. The constitution of the Sixth Republic, as adopted by national referendum on October 29, 1987, and as "wholly amended" to the original 1948 constitution, has an elaborate body of 128 articles. They are grouped into eleven individual chapters. They range from general provisions to basic rights and duties of the citizens, local autonomy, the economy, and the amendment and enforcement procedures. Three distinctive branches of the government are established to exercise political authority and to conduct the business of government: the National Assembly, the executive, and the courts.

Executive Dominance and Institutional Imbalance Since the founding of the Republic of Korea in 1948, Korean politics has shown several institutional weaknesses and problems. The basic institutional framework of Korean politics was stipulated in the ROK constitution, adopted on July 17, 1948. But over the years, the constitution has been subject to revision and amendment whenever political change moved from one republic to the next. The current constitution of the Sixth Republic was amended and proclaimed on October 29, 1987, the ninth amendment to be exact, after the national referendum to approve the new constitution. The ROK constitution contains several features that are unique. Article 1 stipulates that Korea as "a democratic republic" is committed to constitutional democracy, based on the principles of popular sovereignty and the rule of law. Popular democracy is promoted through the political institutions of electoral and party politics. Scholars have debated as to the strength and weakness of the institutional components of Korean politics. Three aspects of Korean politics are particularly noteworthy because they contribute to the weakness of the Korean political institution. These are, according to David C. Kang (2001), the concentration of executive power, the weak legislature, and the unstable party system. They are identified as the reasons for the stalemate in Korean politics and this is explained by utilizing theories of principal-agency and transaction costs analysis (2001).

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Each of these themes will require further elaboration. In democracy, the voters, ultimately, are the principal, and political parties are to be regarded as the agent representing the collective interests of voters in the political process. Yet, in Korean politics, the ruling party tends to act as an agent of the chief executive rather than as an agent of the voters. Likewise, the ROK president, who is popularly elected by the voters in a direct presidential election, should act as the agent of the voters. Instead, the president as the chief executive tends to act as the principal, not as an agent of the voters or political parties. Free elections using secret ballots are conducted periodically at regular intervals as defined by law, both at the national and local levels. Political parties are allowed to compete for the electoral offices, as "public officials" who are "servants of the entire people and responsible to the public" (article 7). The constitution provides that "the establishment of political parties is free, and the plural party system is guaranteed." The constitution requires that "political parties must be democratic in their objectives, organization, and activities, and have the necessary organizational arrangements for the people to participate in the formation of ihe political will" (article 8). Political parties not only "enjoy the protection of the State," but "may be provided with operational funds by the State," while the government "may bring action against" political parties if the purpose or activities are contrary to "the fundamental democratic order," as determined by the Constitutional Court (article 8). To make sure that a democratic election is conducted in an open, fair, and legal manner, the constitution established the Election Management Commission. The commission is to ensure "fair management of elections and national referenda, and dealing with administrative affairs concerning political parties" (article 114). This body, consisting of nine members, equally appointed by each of the three branches of the government, administers and manages elections at all levels by issuing necessary instructions and procedural guidelines for elections. This body manages election campaigns at each level of government with the guarantee of equal opportunity to all political parties (article 116). Notwithstanding the strong provisions for constitutional democracy, political parties in Korea are not fully institutionalized as organizations for interest aggregation and issue orientation. Instead, political parties in Korea act as a network of individual politicians who are controlled and manipulated by party bosses rather than as representatives of the interests of democratic organization and aggregation. Political parties in Korea are not ideological or issue-oriented political organizations that promote public interest and political participation by the masses. Instead, they are a network of like-minded politicians who maintain close ties and connections with the party bosses and leaders through a tightly knit patron-client relationship. An attempt to create a political party of labor union members to represent their particular interests, for instance, did not succeed in the April 2000 parliamentary election nor in the 2002 June local elections or the December presidential election.

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The popular branch of the government in the Sixth Republic is a parliament where the legislative power is vested in the unicameral National Assembly (article 44). The National Assembly as a representative institution enacts major bills, including budget and taxes, and conducts its business through consent to treaties, investigation, impeachment, recommendation for removal, and disciplinary actions of the members of cabinet. The executive power is vested in the president who appoints the prime minister, with the consent of the National Assembly, and members of the State Council. The president acts as the head of state and represents the state vis-a-vis foreign states. The prime minister assists the president and directs the executive ministries. Actually, the president has the power to appoint members of the State Council based on the recommendation of the prime minister (article 87). The State Council is composed of the president, who acts as the chairman, and the prime minister, who acts as its vice chairman. The council deliberates on important policies that fall within the power of the executive (article 88). The National Security Council was also established "to advise the President on the formulation of foreign, military, and domestic policies related to national security prior to their deliberation by the State Council" (article 91). It is obvious that the president, not the prime minister, is the chief executive of the Korean government. The executive branch of the Korean government consists of thirteen independent offices, such as the Board of Audit and Inspection and the National Intelligence Service, which are placed directly under the president and the prime minister, as well as seventeen separate ministries, such as the Ministry of Finance and Economy, the Ministry of Defense, and the Ministry of Foreign Affairs and Trade. The presidential staff in the Blue House has an elaborate system of presidential aides in the major areas of political and government affairs, including the national security advisor and domestic political affairs. The president in Korean politics is thus all-powerful as a political leader. Not only does the president issue executive orders to the government bureaucracy, but he also directs the ruling political party as its leader. In this way, according to David C. Kang (2001), the expected direction of political control in a democracy-the bottom-up process from the principal to the agent-is not the case in Korean political practice. Instead, the process is perverted into an authoritarian form of an executive dominant: a hierarchically structured and top-down flow of authority. The result is an institutional underdevelopment of Korean politics with too strong a presidency, too weak a parliament, and too unstable a party system. Due to its progress in industrialization and the impact of the information revolution, rapid socioeconomic changes in Korea will have unforeseen political consequences. Ideally speaking, an analysis of contemporary Korean politics should address these and related issues. Recent studies on Korean politics have dealt with the dynamics of regime change and political processes of democratization (S. Kim, 2000). An alternative explanation that goes beyond a conventional and traditional approach is needed in order to address the new issues and agenda of political democratization.

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In 1993, following a popular election, the first civilian president was inaugurated in thirty-two years in the annals of the ROK constitutional history. An analysis of South Korea's contemporary politics should go beyond a discussion of democratic transition to a focus on democratic consolidation. The current struggle for democratic consolidation in the Sixth Republic has been undertaken in the context of moving beyond democratic transition, runaway globalization, the emergence of civil society, mass politics and culture, reconciling conflicting forces of democratization and globalization, and the changing role of the state and its transformation. A possible menu of choices for a future study on Korean politics may include the interface of democratization and liberalization, the formation and realignment of social classes (especially the working and middle classes), regionalism, factionalism, the limits of individualism, and future scenarios of the path regarding Korean nationalism and reunification. Globalization and Governability

When the Kim Dae-Jung administration entered the lame-duck phase in 2002, no new policy initiative was made and many of his policy measures were also stalemated. In fact, Kim's sunshine policy toward engagement of North Korea already entered such a phase in 2001, even before the historic June 15,2000, inter-Korean summit meeting marked its one-year anniversary (Kihl, 2001). In other areas of domestic policy reforms, like health insurance, inertia had already set in, with a visible slowdown and a reversal of policy measures. Why did this politics of gridlock and immobilism happen? The failure of the Korean political system to undertake long-needed economic reforms was the primary cause for the South Korean economic crisis in 1998. The policy and legislative gridlock was particularly responsible, as previously noted, for the defeat of many economic reform efforts prior to the 1998 economic crisis. 10 Some attribute the policy gridlock to the institutional limit of a five-year single term as presidency. Because of the term limit of the chief executive, the last year or two of a presidency is likely to stagnate, barring unforeseen external contingencies outside Korea. A new initiative is not likely to be undertaken by the lame-duck president and no bold and substantive accomplishments are likely to result in the policy arena and administration. Instead, both ruling and opposition parties begin to be engaged in election campaigns, moving toward the subsequent presidential election. In the new millennium, South Korea can be seen as undergoing twin processes of rapid change: the transformation of an economic life through globalization and the expansion of democratic governance. These two trends led to certain misgivings on and resistance to globalization. But both the proponents and critics seem to agree that, depending on how South Korea confronts these challenges, the two competing trends could be harnessed to reconcile and reinforce each other in positive ways. The spread of democracy, for instance, can

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contribute to economic prosperity, while globalization can encourage the trend toward democracy. The question is how to arrive at an optimum, whereby strategies can be fashioned appropriate for making globalization work to the advantage of both democracy and economic prosperity. This meant that the Kim Dae-Jung administration had to devise ways of going beyond the negative stereotypes about globalization. This required that the Kim administration seek new ways of responding to the political and economic fears and needs of both big business and workers, at the time of the IMF supervision of the Korean economy in 1998-2001. At the same time, it was also engaging the civil society in positive dialogue and discourse with the government, academic, and labor representatives. The Kim Dae-Jung administration made it known that it would simultaneously pursue a market economy and a political democracy and that the policy of structural reform of the economy would be based on this principle. This suggests that South Korea under the Kim administration made an earnest attempt to reconcile the progress of economic life through globalization and democratic governance. In a way, the globalization of democracy or democratization of economic globalism was pursued side by side by the Kim administration. The fundamental problem of the globalized world economy, according to one observer, is that markets are straining to become global, while the institutions that are required for their effective funding-legal, social, and political-remain largely parochial and national (Rodrik, 2001). The disjuncture between the reach of markets and the scope of nonmarket institutions has had adverse consequences for both the economics and politics of the nation-states. On the one hand, economic integration remains necessarily incomplete, limiting the gains to be reaped from open trade and investment policies. On the other hand, economic openness raises equity and legitimacy concerns on the part of groups that feel they are left out and ignored (2001). To be successful in the administration of the competition state, prior policy measures of liberalization, deregulation, and rationalization must precede globalization. New institutions must accommodate the forces listed as fundamental to comprehensive realignments of the economy. This will mean taking incentives away from the old, vested interests and creating new beneficiaries that require corresponding structural changes. The new state must be able to withstand a key tenant of globalization, which is deregulation and opening all sectors of the economy to outside competition. The intent here is to increase efficiency and to strengthen the economy as a whole. Such structural realignments of the economy were slow to emerge because of the inertia of the past and resistance by the vested interests. The result led to a discrepancy between the power base and policy behavior. Despite the government's press for active globalization, every sector of society tended to resist its moves. While firms were reluctant to adopt global standards in corporate management, bureaucrats also quietly sabotaged deregulation and rationalization. To workers,

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farmers, and teachers afraid of losing their rent haven, the implications of globalization were an anathema. Even lawyers opposed the globalization program in one way or another (Moon and Mo, 1999b: 405). The challenging question was how to reform the existing rules, norms, and procedures of the international trade regime and financial system and make them more fair and equitable. This is a task that is by no means easy to attain given existing vested interests and arcane legal issues. What we need, according to the voices of reform, are some simple principles that can be widely accepted and acted upon as a beacon in guiding reform efforts. Four such principles, as suggested by Dani Rodrik, include: • The principle of democracy, not markets, providing the proper discipline for public policy • The recognition that democratic governance and political communities are to be organized largely within nation-states, and are likely to remain so in the immediate future • An agreement that there is no "one way" because democratic communities will differ in their social and institutional arrangements, for reasons of both historical accident and genuine differences in national preference • An understanding that the way to attain the maximum "thickness" in economic transactions (in trade and investment flows) must be consistent with maintaining space for diversity in national institutional arrangements (2001). Democracy is the most effective guarantor of good governance, not only in the political sphere, but also in the economic sphere. Civil-society and democratic institutions remain by and large national despite the growth of international nongovernmental organizations (NGOs) and other cross-border alliances. This is unlikely to be overcome by making international intergovernmental organizations more "transparent" and open to NGOs, for the simple reason that the NGOs themselves face problems of democratic legitimacy. Their accountability to their stated constituencies remains more distant than that of the international bureaucrats they criticize. The need for institutional diversity applies with greater force to both developed and developing countries. In short, markets require governance. "Good" governance can be ensured only via democracy. Democracy remains coextensive with the nation-state. These simple facts impose serious limits on how far we can push global economic integration and international institutionalization. Ignoring this fact is a recipe for economic failure and social instability (Rodrik, 2001). In a larger sense, the politics of gridlock in Korea's new democracy is a reflection of the fact that Korea's national system of economy is exposed to changes in the global political economy. The Korean economy in the post-IMF era is caught in the contest between the domestic political requirements of sustainable democratic governance and the rising external economic pressures associated with en-

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hancing the competitive advantage of the Korean economy in world economy. This subject needs to be examined further in its comparative perspective. Comparative Capitalism and the Limits of State Reform In the new era of economic globalization, the nation-state continues to remain central. National governments and their economic policies will remain central for the functioning of the international economy. Despite the increasing significance of the market and economic globalization, economic outcomes are determined not only by economic forces, but also by governments and their policies. Yet, national societies differ fundamentally in the degree to which their governments play a meaningful role in the economy and in the ways in which they attempt to manage their economies (Gilpin, 2001: 147). For this reason, the Korean state and its national system of a capitalist economy may be looked at from a comparative perspective with a view to ascertaining the limits of state reform. A study of comparative capitalism has come into vogue with the passing of the Cold War era in global political economy. As Chalmers Johnson observes, just as during the 1960s the Sino-Soviet dispute spawned the study of comparative communism, the end of the Cold War has put comparative capitalism on the intellectual agenda (1995: 54). Capitalism comes in several forms and many models. Whereas the American model is based on competition, the Japanese model has emphasized an industrial policy of shifting comparative advantage. Instead of a transparent approach, the Japanese government relied on "administrative guidance," which was regarded by outsiders as employing "unfair" trade tactics. East Asia's Late Industrialization

East Asia's economic miracle of industrialization was attained relatively late, as seen from the perspective of a time clock of world history. It followed the successful industrial revolutions in western Europe and North America. East Asia's "late" industrialization was led by the state and government bureaucracy, which provided "administrative guidance" and leadership to the economic entrepreneurs engaged in production. The East Asian model of industrialization was thus unlike the west European and North American models and similar, in some ways, to other "late" industrializing states, like the former Soviet Union's "central planning" and command economy model. Late developers, as Alexander Gershenkron (1962: 9) noted while writing about the "late" economic development of Russia and Germany, have taken advantage of the technology previously introduced by early developers. By focusing on the most advanced industrial sectors and by exploiting economies of scale, late developers, like Japan and Korea, tend to catch up with early developers. Japan was clearly a late "developer" vis-a-vis England and United States, while East Asian NIEs like South Korea and Taiwan were "late, late" developers

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when compared to advanced industrializing countries including those in the West and Japan. To characterize the East Asian approach to industrialization, which was pioneered by Japan but emulated by South Korea and Taiwan subsequently, the term "developmental state" or "capitalist developmental state" was coined by writers like Johnson in his widely acclaimed study of MIT! and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975 (1982) and Japan: Who Governs? The Rise of the Developmental State ( 1995). The East Asian approach to economic development starting early in the 1960s was led, according to Bruce Cumings (1999b), by the Bureaucratic Authoritarian Industrializing Regime. This model is distinguished by certain features in its science of late industrialization: a bureaucratic state, education of the masses, effective surveillance, a metaphysical ideology of "national essence," a political economy of administrative guidance and neomercantilism, and regional political economy and formation (88-92). The pressures for democratization and liberalization affected the political economy of the developmental state. The developmental state pioneered by Japan was the prototype for economic development of several East Asian countries in the 1960s and 1970s. During this time, the state and big business had been increasingly connected with more institutionalized networks. Subsequently, however, their close ties and relationship began to unravel. The pattern of state domination and subordination of big business thus began to change into one of close governmentbusiness relations and business-government collusions (E.M. Kim, 1997; Y. T. Kim, 1999). Then, with the end of the Cold War, globalization has significantly increased international economic instability by triggering the East Asian economic crisis and the global economic turmoil of the late 1990s. The financial speculators, moving billions of dollars from one economy to another "with the push of a button," illustrated the point that international financial markets could wreak havoc on national economies and destabilize the global economy (Gilpin, 2000: 323-324). In the aftermath of the 1997-1998 financial crisis, the emerging economies of East and Southeast Asia (including South Korea) were compelled to undergo drastic rhanges with a reduced role for the state in the management of the economy. Alongside the liberal capitalistic and the Stalinist socialistic conceptions, the developmental state constituted a third category of the model of attaining economic development goals. The developmental state, according to one observer, may not be something sui generis but could be understood as a variant of the European continental tradition (Cumings, 1999b: 62). From this perspective, one can draw parallels between what late nineteenth-century Prussia was trying to accomplish economically, in terms of the state-centric system described by Friedrich List's The Natural System of Political Economy, and what Japan after World War II ;,_nd the East Asian countries were attempting a hundred years later (61). The developmental state should be understood, first and foremost, as a set of volitical institutions called "the state" and be analyzed from the state theory perspec-

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tive. The state can be differentiated because it is not only autonomous, but also endowed with state capacities. The state has its own interests that are manifest in its own right, rather than simply reflecting either class (Karl Marx) interests or interests of the political groups in society (Max Weber). From this perspective, the liberal and Marxian notions of the state, as maintained by American pluralism and the Marxist interpretation of the state, respectively, are clearly inadequate. It is not surprising, therefore, that the character and role of the Korean state in the postIMF era is subject to varying interpretations and analyses.

"Still, an Era of the Developmental State?" According to Gilpin, there are three dominant forms of national systems of political economy in the post-Cold War era: the American system of market-oriented capitalism, the Japanese system of developmental capitalism, and the German system of "social market" capitalism. Capitalism in East Asian countries like Japan and Korea in the Cold War era was not pure and true. Rather, it was a "modified and hybrid" variety with the economy placed under strict control. As such, it was close to a state-planned economy (Hoshino, 1992). The capitalist developmental state was pioneered by Japan but emulated by other East Asian countries. It is known as a "strong state and weak society" model of the political economy. In terms of the origin and development of the capitalist developmental state, Japan since the Meiji era has had an overdeveloped strong state and a less developed civil society, not the other way around as seen in the Western countries. The key to a state-society relationship in any society is to establish the source of legitimacy of the state institution. Whereas the American state is relatively weak as an institution and is said to be legitimated by its processes, the Japanese state is strong and is said to be legitimated by its achievement. How does this relate to the nature of the tasks of the competitive state? Instead of weakening state institutions, Korea's competitive state has enhanced its capacity for monitoring economic actors, like financial institutions, the chaebol, trade unions, and workers in the state-run enterprises. The basic tasks of governance, like assuring physical security and national defense, have not been diminished, but the political leadership has failed to provide moral leadership and the capacity for enhancing citizen welfare and wellness in South Korea's competitive state. This balance is essential if the state is to be effective. The Korean state in the postIMF era has shown that "without an effective state, there can be no democracy" (Prezeworski eta!., 1995: 110).ll In Japan's developmental state, the state was put in charge of"administrative guidance" of the economy and society. Industrial policy and other public policies were instruments of the developmental state. A state is developmental, according to Manuel Castells, when it has "established as its principle of legitimacy its ability to promote and sustain development, and understanding by development the combination of steady high rates of economic growth and structural change in the productive system, both

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domestically and in relationship to the international economy" (Castells, 1992, as cited in Johnson, 1995: 67). Asian capitalism, as pioneered by Japan, was known for a combination of a strong state, industrial policy, production-oriented economics, and managerial autonomy. This has led to the rise of the "unique" corporate system in Japan, but it is no longer suitable and viable in the new age. Managerial autonomy, according to Matsumoto Koji (as cited in Johnson, 1995: 63), was the key that led to the rise of the Japanese corporate system. Japan's secret as a producer economy, according to him, was to be found neither in culture, groupism, feudal survivals, nor in Japan's absorption and emulation of the West. Instead, Japan had a restructured form of capitalism that Matsumoto calls "kigyoism" (corporate system). A new economic system had been developed and nurtured in Japan "inside a shell of capitalism," according to Matsumoto. "Just as a monarchy can have a democratic government, a country can have a formally capitalist system-private property, joint stock companies, markets-and yet not be capitalist," as Matsumoto argues (as cited in Johnson, 1995: 62-63). If one "understands the essence of capitalism to reside in control by those bearing the risk, which leads to managerial autonomy, rather than in private ownership, one can call the Japanese system a restructured form of capitalism that emerged in response to new conditions in a new age" (ibid.). According to Matsumoto, Japan has restructured capitalism in three ways: first, by permitting the autonomy of management in business, second, by shifting "the burden of corporate risk to the side oflabor;' and third, by restricting the ability of workers to move from one company to another (ibid.). In this way, Japanese business achieved "autonomy of management." These practices and innovations in Japan were also emulated by South Korean business. This led to a conclusion that free economic principles alone did not guarantee the growth of productive capacity; managerial autonomy was also needed to free the businesses from the pressures of stockholders and from wage demands. In Japan, this practice was aided, according to Matsumoto, by the fact that capitalists were not allowed to control corporations since the days of the American occupation after World War II. Instead, managers were put in charge of the corporations (Johnson, 1995: 51-68). However, times have changed with the newly emerging globalization of the world economy in the post-Cold War era. The "corporate" capitalism pioneered by Japan and emulated by Korea no longer seems to be suited in the "competitive" environment of the globalized world economy. In order for a national economic system to survive and thrive in the era of economic globalization, the competitive developmental state has to acquire the new task of giving "strategic guidance" to the economy rather than offering "administrative guidance" as it had in the past. In this sense, East Asia suffers from the remnants of the now-defunct developmental state. The challenges of the post-Cold War era are no longer only in security but also in economics. In the age of globalization, the purpose of international trade needs to be reassessed. Is it directed toward competition or toward mutual benefit? Soon after the collapse of the Berlin Wall and the subsequent demise of the Soviet em-

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pire, the question was raised as to how the role of international trade and finance should be defined and ascertained. Can nations like Korea and Japan simply be carried along or must they be active participants in the age of liberalizing and democratizing governance systems? Conclusion

Overcoming chronic poverty through economic development has been the dominant concern and preoccupation of most developing countries through the years. Ensuring economic prosperity for the people at home, while promoting "Korea's Place in the Sun" with enhanced status and standing internationally, has become the driving force of the political leadership in modern Korea (Park, 1963; Cumings, 1997; Chamberlin, 2001). Over the years, the respective ROK governments have steadfastly pursued the goals of power and wealth by adopting a set of "mercantilist" policy guidelines that will achieve these objectives. Naturally, their performance has varied widely with mixed results in implementing the policy agendas. In their search for wealth and prosperity, the political leadership identified the ideas of socioeconomic modernization and political democratization as the principal ways of attaining these goals. More recently, since the mid-1990s, the ideas of responding to globalization pressures have also emerged as the focus of political leadership. Despite the fact that the Korean state has progressively moved away from an interventionist to a free market principle, the state as an institution has proved to be indispensable as an instrument for policy making and implementation. The state continues to play an active-still indispensable, but varied-role in the marketplace in this age of economic globalization. The Korean state has played an active role in promoting socioeconomic modernization since the 1960s, in that the central government has been the primary initiator and dispenser of the development policies and programs. However, since the 1980s the South Korean state has seen significant challenges not only from big business, but also from organized labor and the popular sector. The 1987 democratic opening and resultant democratic transition has influenced the social and political relations between the state and the chaebol (Woo-Cumings, 2001). As a result, there has been a gradual erosion ofthe power and capability ofthe developmental state (Woo-Cumings, 1999). But in the age of economic globalization, "sustainable democracy" via market reform has become the choice and challenge for many new democracies (Prezeworski eta!., 1995). The structural reform of the Korean economy from within, while responding to the globalization pressures from without, has become an important policy agenda. The 1997-1998 Asian financial crisis, caused in part by economic globalization, hit the Korean economy hard by placing it under IMP supervision as lender of last resort in exchange for a financial bailout. This was due largely to the failure to institute the needed structural reforms in the economy in a timely way prior to the onset of the Asian economic crisis. 12

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External factors associated with globalization have also significantly increased international economic instability and triggered global economic turmoil and fallout. The Korean developmental strategies since the early 1960s have reflected government preoccupation with economic growth over social development. This resulted in concentration of economic power around large business groups, which generally weakened the position of small- and medium-sized firms.

State Transformation Halfway Down? In 1998, the Kim Dae-Jung administration inherited the institution of a developmental state. The developmental state in Korea was severely battered by the progress of economic globalization and the rise of global political economy. The Korean developmental state on the eve of the Asian financial crisis brought about economic failures of adjustment to the globalized economy. Therefore, the Kim DaeJung government was determined to change the character and role of the state in the political, economic, and social arenas. In the process, the developmental state changed its character from pursuing a welfare state and third-way politics into pursuing competitive and "competition" state goals. How successful this transformation has been remains to be seen. When the Kim Dae-Jung administration proceeded into the last year of its five-year term in office in 2002, the ROK government was subject to popular criticism in the media, while Kim's presidency began to suffer from the systemic inertia of a lameduck administration. This was manifest in the characteristics of political immobilism and frequent charges by the political opposition that the government was inattentive to the pressing matters of the day. In this sense, the Kim Dae-Jung administration was no different from the preceding Kim Young-Sam administration. As Kim Dae-Jung faced the political crisis during the last six months of his five-year term, he admitted that his reform efforts were only half successful and he offered an apology to the nation for his failure to prevent corruption practices within his administration. As an election year, 2002 witnessed uninterrupted campaigns for the June local elections and also for the December presidential election. The campaign issues naturally dominated the political scene and landscape throughout the year. Polls in June to choose regional governors and district mayors, held during the time of the cohos ted 2002 World Cup in Korea and Japan, were of little consequence, since local governments in Korea had little power. Yet, the local election results, with a landslide victory for the opposition GNP, were still important because they were seen as a dry run for the big one: the presidential election on December 19 to choose Kim Dae-Jung's successor, who would take over in February 2003 for a single five-year term. President Kim Dae-Jung spoke publicly about his determination that his administration would resist the inertia of gridlock arising from the last leg of its journey and that he would finish his five-year term by steadfastly promoting his reform agenda, especially in recovery and the restructuring of the economy. De!>pite his declared policy and the administration's intentions, the government be-

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gan to face numerous slowdowns and inaction. Opposition members in parliament made frequent charges about political corruption that were naturally covered by the media. The charges filed against the Kim administration ranged from alleged corruption and irregularities by his aides to the alleged ineptness of his administration. Charges of corruption extended not only to his political associates, but also to members of his immediate familyP In this regard Kim Dae-Jung's honor and reputation as a moral leader became as tainted as that of his predecessor Kim Young-Sam. Kim Young-Sam's second son Hyun-chol was tried and convicted for the bribery and corruption charges, thereby tarnishing the reputation of his father. Park Kwan-yong, the opposition GNP acting president, stated that his party would organize a special committee to investigate the illegal amassing of money by President Kim Dae-Jung's family and the corrupt practices and measures used to confiscate these funds. Reform fatigue had already set in, as seen in labor unrest. Both rail and power workers went on strike on February 25, 2002, to protest against privatization. Also, a new cockiness set in among the chaebol, which started to use free market rhetoric against Kim's efforts to curb them. The dawn of a new century marked a turning point in the context of Korea's long historical journey and pathway. Korea's historical legacy of the past centuries, characterized first as a tributary state of China, then a colony of Japan, and then a divided nation-with two rival and client states of the contending superpowers during the Cold War-had been replaced by a new epoch of evolving an economically prosperous and democratizing Korea. The competitive state of Korea's Sixth Republic was determined to overcome the obstacles and emerging barriers in the age of globalization and information technology and to chart a new future. Despite all the odds, South Korea became the envy of the world: a dynamic economy and a liberal democracy that has joined the ranks of the Organization for Economic Cooperation and Development and the advanced countries of the world. The Korean people seem active and determined to take charge of their own destiny-unlike the past generations, when they were somewhat passive and victimized by external changes. The "success" story of building a thriving modem nation-state in recent decades, via modernization, industrialization of the economy, and political democratization, has given the world assurance that South Korea's Sixth Republic will write a new chapter, with policymakers that are determined to accommodate and cope with the competitive pressures that mark and reflect globalization in the twenty-first century. Korea's place in the new world order and its appropriate role will reflect its strategic location, which has a significant bearing on remaking a world safe for peace and democracy. If South Korea is to survive and thrive in the twenty-first century in a world that is becoming increasingly interdependent, complex, and competitive, the dynamics of democracy and global governance must be fully grasped. Problems must be critically evaluated in the context of the historic interrelationship among modernization, democratization, and globalization, as well as the current diplomatic options facing South Korea. This is the subject to which we tum next.

7 Foreign Policy and Democracy From Nordpolitik to Engagement

Peace can be seen as essential, for without some degree of peace, neither development nor democracy is possible. Yet both development and democracy are essential if peace is to endure .I

Boutros Boutros-Ghali, 1996 Democracies almost never fight each other. 2

Bruce Russett, 1993 With the progression of democratization and globalization, the direction of foreign policy of Korea's new democracy has shifted over the years. Not surprisingly, since 1988 the foreign policy style, and substance, has moved away from aninitially uncertain and tentative posture during the authoritarian era toward a more confident and secure foreign policy in the Sixth Republic. The government of President Roh Tae-Woo had taken a new policy initiative toward North Korea and the communist-bloc countries timed with the hosting of the 1998 Olympic Games in Seoul. The foreign policy of the government of President Kim Young-Sam followed the diplomatic path laid down by its predecessor, but it struggled with the segyehwa policy implementation, as noted in Chapter 5. The Kim Dae-Jung administration was able to achieve a grand strategy of enticing North Korea to confront the external environment in the new millennium. The questions that guide the study of foreign policy and international politics focus on explaining how and why states act as they do and what makes a country turn inward or outward. This is true in the analyses of foreign policy behavior and action of South Korea under different administrations of the Sixth Republic. These questions also apply when considering North Korea under Kim Jong-11. The quests for security, legitimacy, and development have been the underlying themes for foreign policy objectives of the Korean states both for South Korea and for North Korea. South Korean foreign policy, however, has become over the years more autonomous, pragmatic, and efficacious with its progress in modernization and democratization. 3 The foreign policy ofRoh Tae-Woo was largely directed at managing the diplo228

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macy of joining the United Nations as a regular member during the transition from the Cold War into the post-Cold War era. The Kim Young-Sam and Kim Dae-Jung administrations, however, focused on the challenges of globalization in a world economy, both at the international and regional levels, and were determined to ensure that the South Korean economy would survive and prosper. Kim Dae-Jung also achieved limited success in establishing a dialogue with North Korea at the historic summit meeting between the two governments in the summer of 2000. Ideas matter in foreign policy, much as in the domestic politics of the Sixth Republic of Korea. Because of the successful democratic transition, the Roh TaeWoo administration was able to launch the new foreign policy initiative of Nordpolitik (or Northern policy), which enabled the Republic of Korea (ROK) to expand diplomatic ties with former communist-bloc countries and win their support for UN membership. Efforts at furthering democratic consolidation through reform measures enabled the Kim Young-Sam and the Kim Dae-Jung administrations to promote foreign policies around the themes of globalization to further regional initiatives like the annual Asia Pacific Economic Cooperation (APEC) forum and biannual Asia-Europe Meetings (ASEM). Further progress in democratization prepared the ground for the Kim Dae-Jung administration to adopt the policy of engagement (or "sunshine policy") toward North Korea. In this chapter, the foreign policy initiatives and guidelines of the various administrations of the Sixth Republic will be examined in more detail. It is necessary, first of all, to provide the context for foreign policy making in a transitional democracy by asking how foreign policy is shaped and how interests or national identities are defined to play a role in making and implementing foreign policy. Constructing Foreign Policy in Democracy: Ideas and Interests

Ideas like democratization and globalization have come to influence the foreign policy making and administration of South Korea's Sixth Republic, which has seen impressive gains in both domestic and foreign policy. The Roh Tae-Woo administration, for instance, made gains on two discernible political fronts, the democratic transition in domestic politics and Nordpolitik in foreign relations. Subsequently, the Kim Young-Sam administration made gains in democratic consolidation and globalization in external relations, while the Kim Dae-Jung administration focused on deepening democracy and opening contact with North Korea through its engagement, or sunshine, policy. In both domestic and foreign relations, all three administrations of the Sixth Republic made positive strides, with varying degrees of success, in carrying out their respective reform agendas. The Roh Tae-Woo administration, for instance, achieved remarkable success in Nordpolitik by establishing diplomatic ties with the former socialist-bloc countries in eastern Europe and the Soviet Union, but had difficulty with domestic policy, such as in promoting social welfare and economic growth (Wolgan Sahoel Pyongronsa, 1992). The Kim Young-Sam adminis-

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tration, in contrast, was more successful in undertaking domestic political reforms but less so in launching globalization policy. The Kim Dae-Jung administration, with its economy placed under the International Monetary Fund conditions, was successful initially in promoting structural reform of the economy, while also engaging North Korea in its sunshine policy. Discourse on reunification issues in South Korea was banned during the authoritarian years except through government-sponsored channels. However, the democratic transition enabled renewal of a social movement for reunification and activation of the civil-society groups that had a participatory role in aiding the defection of North Koreans to the South and the flight of refugees fleeing from the North to other countries, like China. The question under consideration is: What relationship exists, if any, between democratization and foreign relations? Is the relationship between the two, domestic politics and foreign policy (Nordpolitik and engagement), part of a planned strategy or the result of serendipity? Does success in foreign relations in a democracy depend on success in domestic politics, or vice versa? Is it reasonable to assume, for instance, that the relative success of South Korea's Sixth Republic in foreign relations was furthered by the progress that the respective administrations made in promoting democratization? Since foreign policy making in a transitional democracy follows its own process and dynamics, it is necessary first to clarify the relationship between regime type and foreign policy. This will be followed by a discussion of the context of democratic transition in South Korea and the conceptual issues relative to foreign policy making and behavior in the Sixth Republic. Regime Type and Foreign Policy The regime type of a developing country such as South Korea seems to have a bearing on the public policy outcome, especially on economic development policy, pursued by the regime (Prezeworski et al., 1995; Deyo, 1987; Wade, 1990). South Korea's status as a newly industrializing economy, for instance, was promoted by the previous, authoritarian regimes of President Park Chung-Hee of the Third and Fourth Republics (1961-1979) and President Chun Doo-Hwan ofthe Fifth Republic (19801987). Although the Sixth Republic ( 1988-1994) was not as successful in sustaining high economic growth as its predecessors, it was able to accomplish vigorous diplomacy and maintain a growth-oriented economy. This chapter evaluates the hypotheses that (1) South Korea's democratization and economic growth are not always compatible as policy goals, (2) the relationship between democratization and economic growth is, therefore, not always positive, and (3) political regime type and economic performance will have limited bearing on the success or failure of a country's foreign policy (Prezeworski eta!., 1995). The democratization drive initiated in 1987 and put into effect through the 1990s provided the context for the foreign policy initiatives undertaken by the respective adminbtrations of the Sixth Republic. In the external environment, the end of the

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Cold War also provided the context in which both foreign policy and reunification policy of the ROK government were carried out. As noted in Chapter 3, despite an escalating conflict between opposition forces and the Chun regime, a declaration of democratic reform was advanced by the leader of the ruling Democratic Justice Party, Roh Tae-Woo, as a way of reaching a political settlement to the stalemated conflict. The eight-point declaration of democratization included such bold and sweeping measures as pledges to restore human rights, including freedom of speech, assembly, and the press; to conduct direct presidential elections; and to release political prisoners. Democracy, or democracy building, in South Korea has been an ongoing process, rather than an accomplished fact. The efforts of the successive governments during democratic transition will, therefore, need to be placed in proper historical and theoretical context. It is necessary, for instance, to differentiate between theory and practice, that is, assessing both the leadership commitment and policy direction of each regime and its accomplishments and institutional gains. Instead of accepting the regime's claims at face value, the performance and actual record of the regime in implementing reform promises must be used as the criteria for evaluation. From this perspective, then, the task of democratization has not been completed in South Korea, although great strides and impressive gains have been registered during the tenures of the presidential administrations of the Sixth Republic. In general, South Korea's Sixth Republic was neither the authoritarian state that it was prior to 1988, nor was it a fully established mature democracy like those in the West. During President Rob's tenure in office, the country might best have been termed a "transitional democracy," one just emerging from an authoritarian regime but not yet fully institutionalized as a mature democracy (Cheng and Krause, 1991: 3-25). The institutional requirements and political dynamics of this regime type, a newly democratizing polity, are somewhat unique. They vary from other regime types, whether they are an authoritarian regime or a more mature and developed democratic state. During the authoritarian regime, primary attention was given to the task of economic growth and performance. Technocracy and selected chaebol were the agents through which the regime pursued its developmental goals of an export-led industrialization of the economy. State "autonomy" in the Fourth and Fifth Republics was very high, as the regime tended to overreward big business and undercompensate others, including workers. The foreign policy agenda during this era was largely a focus on the existing security relations and trade ties with traditional allies. During the democratic transition of the Fourth and Fifth Republics, civil society became activated and state autonomy was correspondingly constrained (Cotton, 1991). Since the democratizing regime could no longer exclude the popular sectors of the labor unions and working class from the political process, it had to develop popular policies tailored to their needs in order to solicit their support.

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Intellectuals became more open in articulating democratic values and norms, thereby exerting pressure on the respective regimes to incorporate such values into reform agendas. University students became more vocal in their demands for participation in campus governance. Popular elections, both at the national and local levels, were inaugurated so as to permit citizens to choose representatives and through them to provide popular input into the policy-making process. With the middle class becoming more vocal and attentive, the democratizing regime and state were pressured more to promote and protect the interest of a larger number of constituencies and interest groups (Cheng, 1990). With an activated civil society, the regime began to move toward accommodating a number of the demands placed on it by interest groups for participation in the policy process (S. Kim, 2000). The regime was expected to give more attention and priority to "righting the balance" and "rectifying the ills" of the past years of authoritarian rule (Cheng and Krause, 1991: 6). This type of transition problem, stemming from regime change to democracy, provided the "torturer problem" of "how to treat authoritarian officials who had blatantly violated human rights" in the past (Huntington, 1991a: 209). Under these circumstances, politicians in the democratizing regime have had more leeway in offering leadership in foreign affairs. This opportunity has been in part generated by initial expectation and goodwill engendered by democratic transition. They could also behave differently, more opportunistically, in an effort to consolidate the regime's newly acquired legitimacy via electoral contests. Democratic transition in South Korea during the Sixth Republic had been steady, although somewhat slow in pace and frustrating at times (Kihl, 1990a: 67-73). What, then, is the nature of the relationship between democratization and foreign policy? Foreign policy in established democracies tends to be less warlike and more peaceful. History shows that liberal democratic countries tend to be more likely to maintain peaceful relations with each other than with nonliberal countries (Doyle, 1992: 308; 1985: 1151-1169). This is generally the case because liberal and democratic states tend to "exercise peaceful restraints" and "negotiate rather than escalate disputes" (1992: 308-309). It is unclear whether the foreign policy of democratizing regimes or transitional democracies can likewise be said to be "less warlike and more peaceful." It is logical to assume, however, that a regime that is moving away from authoritarianism toward democracy will have an incentive to be more prudent in foreign policy, as in domestic policy areas, in an attempt to realize democratic virtues and further moderation and harmony of interests. To do otherwise seems to be setting the historical clock backward in the march toward democracy. Nondemocratic authoritarian regimes or totalitarian states are able to take more risks and are frequently more warlike in their foreign policy style and behavior. The policy implications of the preceding analysis are that as South Korea continues to move along the path toward democratic consolidation, conflict with liberal de;:nocratic neighbors, such as Japan, is more remote and less likely to occur.

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This may not be the case for democratic South Korea, however, in its dealings with North Korea, as long as the latter continues to remain a nondemocratic and nonliberal state. Based on the historical evidence of almost two centuries, Michael W. Doyle discovers that "peaceful restraint only seems to work in terms of the liberals' relations with other liberals," but that "liberal states have fought numerous wars with nonliberal states." Moreover, the wars that liberal and democratic states have been drawn into are basically the "defensive" ones, which can be characterized as "prudent by necessity" (1992: 310). President Roh's Nordpolitik was an answer by South Korea's democratizing regime to confront and to cope with external challenges. It was a strategic move by Seoul to strengthen its diplomatic hands vis-a-vis Pyongyang's allies while further isolating North Korea internationally. On the eve of the 1988 Summer Olympic Games in Seoul, North Korea unsuccessfully pressured its allies to boycott the event-all members of socialist-bloc countries except Cuba sent athletes to the Seoul Olympic Games. In terms ofRoh's foreign policy, not all of his diplomatic feats, to be sure, were of his own creation. The hosting of the Olympics, for instance, was the culmination of the work of his predecessor, former president Chun Doo-Hwan, who had prepared for the staging of the festival through massive construction projects and infrastructure building throughout the country. In this endeavor, the Chun regime acquired international loans and aid, including a $4 billion loan from Japan. Roh presided over the Olympic opening and closing ceremonies in his capacity as leader of the country, determined to blaze a new trail in democratic transition. Roh's pledge to support democratization gave him, rather than Chun, the right to host and preside over the Seoul Olympic Games. Rumors circulated that the venue might be moved from Seoul to an alternative site unless South Korea's political situation became stable and orderly (Taylor, 1988: 190-195). On the eve of hosting the Olympics, the Roh administration took a series of important and bold foreign policy initiatives to enhance its diplomatic status vis-avis the socialist-bloc countries. Before detailing an account of President Roh's foreign policy initiatives, called Nordpolitik, and their implementation, however, we will first examine how and why ideas matter in foreign policy, especially in democracy and in a democratizing country like South Korea's Sixth Republic.

Ideas, Interests, and Identities Such ideas as democratization and globalization had an impact on the ruling elites of the administrations of South Korea's Sixth Republic and came to define their respective national strategies in foreign relations. This was particularly evident in the policy goals and objectives of the various governments. Such ideas as West Germany's Ostpolitik (or Eastern policy), for instance, influenced former president Roh Tae-Woo's rethinking about the Korean reunification issue and led to the formulation of Nordpolitik during his term in office.

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The launching of Nordpolitik as a foreign policy initiative for democratizing South Korea appeared to be modeled after West Germany's Ostpolitik. South Korea's hosting the 1988 Olympic Games in Seoul was timed with ending the Cold War system in global politics and was a significant event for reviving the Olympic spirit of promoting peace and cooperation in the annals of international Olympic movements and Korea's modern history. Ideas, like democracy and the rule of law, have produced lasting impacts on world politics, as shown by the establishment of international institutions following the liberal tradition after World War II. The founding of international organizations and international regimes in security, economics, and welfare issues in the post-World War II era, under U.S. hegemony, is an obvious example (see individual chapters in Goldstein and Keohane, 1993). In the context of Korea's democratic opening in 1987 during the Fifth and Sixth Republics, such ideas as liberal democracy and West Germany's Ostpolitik influenced the thinking of the Korean elite not only in relation to Korea's reunification with North Korea, but also on Korea's future through democratization. The German reunification resulting from the fall of the Berlin Wall in 1989 produced profound impacts on the thinking and perception of Koreans both in the South and in the North in the late 1980s and thereafter. South Korea's democratic transition, in a broader sense, may be regarded as an expression of the global march toward democracy that was going on throughout the world in the last quarter of the twentieth century. This included political changes in southern Europe, South America, the Philippines, and former socialist-bloc countries in eastern Europe. In this sense, South Korea certainly shared a common perspective and common problems with other countries that were also undergoing the process of rapid political change (Huntington, 1984: 201-216). In addition to ideas, interests come to play a role in the domestic politics of democratizing countries like South Korea. Interests represent the articulation of preferences by an elite and its determination of policy priorities and identities. Interests are forged in a democracy through the articulation of ideas by the elite with the mobilization of mass support behind the policy issue. Interests also play a role in formulating foreign policy. What is interest? What is national interest? How can national interest be identified and determined, and by whom and how? Also related to these basic questions are how does the regime typewhether democratic or authoritarian-make a difference, if any, in the definition of national interest? Is democracy "inherently" weak, as some critics argue, and strong only at times of crisis vis-a-vis dictatorship and authoritarianism that can bypass public opinion in formulating and implementing foreign policy? It is true that a modem state, whether a democracy or a dictatorship, can act to promote its national interests. However, it is in the ways in which states define their interests that liberal democracy and dictatorship differ. For realists, a state's position in the international system tells how its national interests are defined. This is so because those subscribing to realism, whether democratic or not, must take

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into account such considerations as balance of power, or they will not survive. For liberals who tend to subscribe to democracy, national interests are defined by much more than the state's position in the international system because liberalism espouses a richer account of how state preferences and national interests are formed. The definition of the national interest, therefore, depends in large measure on the type of domestic society (Nye, 2003: 47). For liberals, the nature of a domestic society like South Korea's Sixth Republic is important to consider, because democracy places greater emphasis on such values as economic welfare and foreign trade. Liberals argue that democracies define their national interests differently from closed societies like North Korea, even if they are similarly positioned in the international system. Realist predictions have been more likely to be accurate as far as security and balance of power on the Korean Peninsula, but liberal predictions may come true if the engagement policy pursued by President Kim Dae-Jung bears its intended fruit. Identity politics has become more prominent in South Korea in the post-Cold War era, especially in regard to the Kim Dae-Jung administration's initiative toward North Korea under new policy guidelines of engagement and the sunshine policy. What, then, is identity as a concept and how and why is identity important in influencing political actions and behavior in a society, especially in a democracy? How does identity affect foreign policy decision making and its implementation? 4 With the decline of political ideology and the concomitant rise of economic interest in global and domestic politics in the post-Cold War era, it is only natural that ideational systems have come to play a greater role in forging individual or collective national identities. Identity plays a role in decision making via the ideational preferences of elites and their definitions of national interest. This is especially true in terms of preference ranking among alternative goals and plans for implementation in liberal and pluralistic democracies. Foreign policy, like any other public policy, is developed by decision makers in an effort to respond to situations in the external environment confronting the state. In democracy, the voters elect leaders, and their offices are vested with the authority and legitimacy to make policies. Foreign policy formulated by the leadership in a democracy is intended to represent national interests and priorities. In the process of decision making, foreign policies will reflect a sense of identity, or a collective identity, of the people who constitute the nation in the environment of international politics. National interests are refined and enumerated by the elite in terms of their ranking and ordering of public preferences. For ideas to substantively influence foreign policy, the elite must identify ideas and provide an opportunity for articulating interests in ways that will benefit them politically. This is how Nordpolitik became the primary diplomatic strategy of the Roh Tae-Woo administration in 1988, while engagement toward North Korea became the policy of the Kim Dae-Jung administration in 1998. Both presidents found these ideas to be useful for articulating the respective foreign policy goals and national interests of their administrations.

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The Roh Tae-Woo administration used the idea of Nordpolitik to accomplish not only the feat of normalizing its diplomatic relations with the former communist countries in eastern Europe, but also of enabling membership in the United Nations in 1991. This was accomplished despite the strenuous effort by Pyongyang to block Seoul's entry into the United Nations on the ground that Seoul's "separate" membership application would constitute an act of perpetuating the divided nationhood of Korea. As for Kim Dae-Jung's engagement policy, the ideas of rapprochement and detente were exploited as a way of overcoming the Cold War stalemate in North-South Korean relations. President Kim Dae-Jung dealt with the question of identity for the Korean people by developing a collective identity that would coincide with the individual or collective interests of the Korean people, whether in North or South Korea, by presenting the concept of reunification of North and South Korea. Ideas matter in foreign policy, but only through the mechanism of interests and interest articulation. Interests act as a filtering mechanism between a foreign policy actor's ideas and identity. In a democracy, ideas suggested by leaders and interests represented by groups must be reconciled in such a way that policies will come to reflect the common good and collective identity of the people. Whether the case involves Nordpolitik or engagement, the logic is the same, in that considerations of ideas, interests, and identity will play out individually or in combination. Nevertheless, in the case of Kim Dae-Jung's developing engagement policy vis-a-vis North Korea, identity became more important than in the case of Roh Tae-Woo's cultivating Nordpolitik because of the dynamics of the issues at stake. Engagement policy required both North and South Korea to interact diplomatically, whereas Nordpolitik was essentially a unilateral measure that did not require North Korea to respond. Interests and identities potentially act as the filtering mechanism through which ideas like democratization and globalization become useful and operational. Therefore, it is imperative to trace ideas through the maze of interests and identities before ideas come to gel as the basis for foreign policy.

Institutional Base of Foreign Policy and Democratization South Korea's experiences with democratic transition and foreign policy are unique. The preconditions or clusters of variables (as noted by Samuel P. Huntington [1984]) that influence Korea's political development are distinctive (C. L. Kim, 1988: 4472), as is the institutional basis for Korea's foreign policy. The fourfold preconditions or prerequisites for democracy, according to Huntington, include economic development and equality, a social structure that is pluralistic, external environment and its impact, and political culture and its legacy (1984). The constitutional principle of Korea's Sixth Republic is representative democracy, whereby the chief executive and members of the legislative branch of the government are separately and popularly elected by the voters to serve a fixed term in office. Foreign policy is the exclusive domain of the president rather than

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the responsibility of the National Assembly. Therefore, the democratic procedure of electing the ROK president, to serve a single five-year term, has more to do with ROK foreign policy making than the parliamentary election of the national legislative body held every four years. For this reason, it is useful to examine the role of the public as voters in choosing the ROK president as chief executive and chief diplomat of Korea's Sixth Republic in conducting foreign relations. A heightened popular demand for political participation and the external impact of the worldwide trend toward democracy clearly influenced South Korea's political transition in the late twentieth century. The key to South Korea's initial success in democratization lies, as James Cotton argues, not only in popular demands for political participation, but also in the willingness of elites to recognize them as unavoidable consequences of socioeconomic modernization (1989: 244). An analysis of South Korean democratization therefore requires specification of the nature of both the regime and the popular sector, as well as their interaction in terms of potential for stimulating political changes. The Korean case illustrates the difficulties and dilemmas faced by a rapidly industrializing country attempting to bring about an orderly, peaceful, and timely democratic transition. South Korea's presidential election campaigns of December 1992 and 1997 symbolized the coming of age of the Korean people in a thriving, albeit fragile, democracy. With the election of Kim Young-Sam in 1992, the country's first president without a military background in thirty-two years, South Korea lived up to the goal of establishing a democracy through an orderly and peaceful transfer of power. Likewise, with the election of Kim Dae-Jung in 1997, South Korea's Sixth Republic became a mature democracy, enabling the first peaceful transfer of power from the ruling party to an opposition party. As Korea's Sixth Republic makes headway on democracy building, it has moved along the path toward greater democratic consolidation. Just as South Korea built an economic miracle, the country came to prove that the political miracle of democratic transition was within its reach. Two observable and empirical indicators of democracy, as Robert A. Dahl observes, are the presence in the political system of ( 1) political contestation and (2) popular participation in the political process (1971, 1989). A political system is democratic, as Huntington argues, "to the extent that its most powerful collective decision makers are selected through periodic elections in which candidates freely compete for votes and in which virtually all the adult population is eligible to vote" (1984: 204). An operational definition of the term "democracy," therefore, will require the presence of the regime and opposition forces in a society that is governed by institutional rules and mechanisms for a peaceful and orderly political change via election and the electoral process. Article 66 of the ROK constitution stipulates that the president is "the Head of State" and "represents the State vis-a-vis foreign states." The president not only "has the responsibility and duty to safeguard the independence, territorial integrity, and continuity of the State and the Constitution," but also "has the duty to pursue sin-

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cerely the peaceful unification of the homeland." "Executive power is vested in the Executive Branch headed by the President." The president has been endowed with such substantive powers as he or she "concludes and ratifies treaties, accredits, receives, or dispatches diplomatic envoys; and declares war and concludes peace" (article 73). The president is also "Commander-in-Chief of the Armed Forces under the conditions as prescribed by the Constitution and law" (article 74). In discharging the constitutional authorities and duties, the president is assisted by the prime minister and members of the State Council. "The Prime Minister is appointed by the President with the consent of the National Assembly" (article 86), whereas "the members of the State Council are appointed by the President on the recommendation of the Prime Minister" (article 87). The State Council "deliberates on important policies that fall within the Power of the President," and the president is its chairman and the prime minister its vice chairman (article 88). A National Security Council "is established to advise the President on the formulation of foreign, military, and domestic policies related to national security prior to their deliberation by the State Council;' and its meetings are presided over by the president (article 91). Whereas liberalization entails a "partial opening of an authoritarian system," democratization is "the replacement of a government" that was not chosen by open election "by one that is selected in a free, open, and fair election" (Huntington, 1991a: 9). Through democratization, South Korea realized the replacement of an authoritarian government by a government selected "in a free, open, and fair election." Through democratization, the process of popular participation in a political process was also established as the rule of the political game. The South Korean democratic transition began with the December 1987 presidential election and climaxed with the December 1992, 1997, and 2002 presidential elections, thereby completing the full electoral cycle involving an orderly, peaceful transfer of power. South Korea's democracy movement reached a turning point and acquired potency in the summer of 1987 when protest demonstrations were joined by middle-class citizemy. Thereafter, not surprisingly, violent demonstrations died down with the waning support of a middle class that detested tear gas and violent confrontation in the streets. This suggests that the institution building of democratic politics is the prerequisite for democracy to grow in South Korea's Sixth Republic. South Korea's presidential elections in 1992, 1997, and 2002 were progressively less violent and emotional than the 1987 election. No street protests or voter boycotts were noticeable in these elections. Perhaps this reflects the growing confidence and maturity of South Korean voters and their resolve to build a newly successful democratic polity. Voting in these presidential elections was also relatively orderly and peaceful, and there were less frequent charges of campaign excesses and voter irregularities. Although the role of public opinions and interest groups in foreign policy making has traditionally not been strong in Korean civil society, this is rapidly changing with the progress of democratic consolidation. The greater input and

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changing roles of the interest groups in Korea's nascent civil society, for instance, are underscored by an active role of such civil-society groups as business organizations, labor unions, church groups, intellectuals, student organizations, and civic organizations. 5 Democratization has enhanced Korea's international standing and the integrity of its foreign policy as well. Since reunification of the country is yet to be attained, the successive presidents of the Sixth Republic wished to see more progress made in inter-Korean relations. This desire to bring the reunification of Korea closer to reality was the motivating factor behind the signing of a series of agreements with North Korea in 1992 and in June 2000. However, progress in implementing these agreements has been slow. The government's proposal to arrive at substantive progress on the Red Cross talks on divided family reunion, for instance, has not been heeded by North Korea. Pyongyang remains intent on keeping its population isolated from adverse external influences.

The Context of Korea's Foreign and Unification Policies How did the foreign and unification policies of South Korea since the inauguration of Korea's Sixth Republic in 1988 arise and take shape? While foreign policy is a sine qua non for all states, unification policy is central for such divided nationstates as Korea and China. The quests for legitimacy, security, and development, as Koh Byung Chul argues, have been dominant themes of South Korea's foreign policy under the different administrations in the Sixth Republic (200 1: 231-268). Although the pursuit of the strategic goals of political legitimacy, military security, and economic development may not be so unusual for a new democracy like Korea, the context that is unique to Korea as a divided nation has provided the motive for shaping its foreign and unification policies. 6 Several key factors of geography and history have worked to increase the stakes in foreign policy for the ROK and the Democratic People's Republic of Korea (DPRK). First, the Korean Peninsula is the geopolitical nexus in Northeast Asia, where the interests of major world powers converge and collide. During the Cold War years, the strategic asset of Korea stemmed from its geopolitical position between the United States and the Soviet Union during their ideological and military confrontation. Second, the emergence of two mutually hostile states, a capitalist South and a socialist North, waged proxy wars, both hot and verbal, on behalf of their respective patron states. Third, the emergence of an entangled military alliance has reinforced the strategic complexion of the Korean Peninsula. The maintenance of peace and stability on the Korean Peninsula, under the circumstance of a divided nation, has been the function of a delicate balance of power among the major powers having an active interest in the region, such as Japan, China, Russia, and the United States. The questions of "whether, when, and how" to achieve Korean reunification will be determined primarily by the Koreans themselves and secondarily by the major powers' concerted efforts.

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Three principles of reunification, as agreed to in the July 4, 1972, NorthSouth joint communique, provided the political guideposts. These entail the principles of "independence without reliance on external forces," "peaceful reunification," and seeking "greater national unity transcending ideologies, ideas, and systems" (Kihl, 1984: 206). Changes in the external environment with the passing of the global Cold War constituted the determining factor for signing the agreement on reconciliation, nonaggression, and exchanges and cooperation between South Korea and North Korea on December 13, 1991. This also led to the adoption of a joint declaration on the denuclearization of the Korean Peninsula on December 31, 1991. The failure to implement these historical agreements in the ensuing years, however, led to the escalation of tension and heightened security concerns throughout the remainder of the 1990s (Kihl, 1994a: 133-152). What path Korean reunification will take-if and when it comes-remains to be seen. At least three scenarios are possible: reunification by war, reunification by mutual consent, and reunification by default (Pollack and Lee, 1999). However, both Korean states seem to have ruled out the path of reunification by conquest (as in Vietnam) or by absorption (as in Germany). Instead, both Koreas are officially committed to the path of reunification by agreement (as in Yemen) that incorporates either confederal or commonwealth plans. More likely, the end result of inter-Korean relations will be reunification by association if the terms of the inter-Korean agreements, including the 1991 agreement and the 2000 Korean summit declaration, are faithfully carried out with movement in the direction of coexistence as an intermediary stage. The June 15, 2000, Korean summit meeting in Pyongyang, between the ROK president Kim Dae-Jung and the DPRK leader Kim Jong-Il, was the culmination of a series of prior encounters and engagements between the negotiators in Seoul and Pyongyang. In the subsequent discussion, two separate sets of foreign policy initiatives about inter-Korean relations in the Sixth Republic will be addressed: the Nordpolitik of the Roh Tae-Woo administration and the sunshine policy of engagement of the Kim Dae-Jung administration. The difficulties of the Kim YoungSam administration policy initiative toward North Korea, despite its strenuous efforts, will also be briefly recounted. These discussions on inter-Korean relations will be followed by an analysis and assessment of the external impact of the ROK new policy of engagement on the major power relations in the region. Nordpolitik (or Northern Policy) and Democratization

Nordpolitik was the most important foreign policy initiative undertaken by the democratizing regime of President Roh Tae-Woo. Under this policy directive, Seoul successfully negotiated the establishment of diplomatic relations with all the communist countries except Fidel Castro's Cuba. South Korea established diplomatic ties first with countries in eastern Europe, including Hungary, Poland, and Yugo-

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slavia in 1989, followed by ties with Czechoslovakia, Bulgaria, Romania, East Germany, Mongolia, and the Soviet Union in 1990, and finally with China and Vietnam in 1992. South Korea also successfully managed to join the United Nations in 1991, while pressuring North Korea to do likewise and become a member of the world body. Until 1991, North Korea was opposed to simultaneous entry of North and South Korea into the United Nations on the grounds that such an action would perpetuate the division of Korea. It advocated an alternative policy of single UN membership under a con federal scheme or a rot.ation of jointly held seats between the two sides. An analysis of Roh 's Nordpolitik will show that it was promoted for both domestic political and foreign policy considerations. South Korea's favorable external image as a newly democratizing and industrializing country contributed to the policy's successful implementation. 7

The Logic of Nordpolitik Nordpolitik was the theoretical rationale for the new strategic calculus of President Roh Tae-Woo's foreign policy in the Sixth Republic. With the democratization agenda intact following his inauguration, Rob Tae-Woo soon realized that he could no longer rely on politics as usual as a strategy of governing. A new and fresh approach had to be invented, and urgently, since he was searching for a model of effective governing that suited an era of democratic transition. During the authoritarian years, the government used anticommunism rhetoric to impose tough measures on domestic law and order. With the change in the governing system, away from authoritarianism toward democracy, the old practice of anticommunism by waving the specter of North Korea's possible invasion of South Korea was no longer suitable or credible. An alternative strategy was essential and this eventually took the form of Nordpolitik. This new policy was based on the premise that direct confrontation with communism was the best workable strategy in a time of rapid change. This provided a rationale for seeking normalization of relations with the allies of communist North Korea. Seoul's Nordpolitik was aimed at achieving the twin objectives of relaxation of tensions with North Korea and improvement of relations with the communist-bloc countries of China, the Soviet Union, and Eastern Europe. Although it was presented initially as a means of attaining the unification of Korea, Nordpolitik acquired a raison d'etre of its own. It soon became a major diplomatic tool for promoting the foreign policy objectives of South Korea's democratizing regime (Kihl, 199lb; Ahn, 1991). Nordpolitik, thus initiated, produced domestic political payoffs. Diplomatic success abroad opened new business opportunities in former communist-bloc countries and enhanced the level of domestic support for the regime among the popula-

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tion. President Roh was glad to use the success of this policy for promoting the political standing and legitimacy of his democratizing regime. The seeds of Nordpolitik were sown by former President Park Chung-Hee of the Third Republic on June 23, 1973, when he said that his government was willing to establish ties between South Korea and countries with different ideological and political systems. President Park's declaration opened South Korean ports to ships from communist countries and gave them equal access to formerly forbidden parts of the world. But with the turn of events and the freeze in international relations occasioned by such events as the Soviet invasion of Afghanistan in December 1979 and the subsequent U.S. military buildup, the Seoul government initiative was sidelined until the advent of a new detente in U.S.-Soviet relations. The genesis of Nordpolitik was the inauguration address of President Roh. He pledged to pursue a vigorous northern diplomacy by calling on North Korea to "accept that dialogue, not violence, is the most direct short cut to ending division and bringing about unification" (ROK, 1990: 57-58). The broader foreign policy agenda of President Roh's Sixth Republic was laid out by a series of new and imaginative policy initiatives and pronouncements, including a Special Declaration on National Self-Esteem, Unification, and Prosperity, July 7, 1988; Roh's address before the thirty-fourth UN General Assembly, October 18, 1988; and his Special Address before the National Assembly concerning National Unification, September 11, 1989. President Roh used the public forums both at home and abroad to launch his initiatives on Nordpolitik. 8

The Content of Nordpolitik The essence ofNordpolitik was contained in a six-point policy statement reflected in the Special Declaration on National Self-Esteem, Unification, and Prosperity. Addressing the National Assembly, President Roh made it known to the world that his government would seek to: 1. Actively promote exchanges of visits between the people of South and North Korea and make necessary arrangements to ensure that Koreans residing overseas can freely visit both parts of Korea 2. Vigorously promote the exchange of correspondence and visits between relatives dispersed in both parts of Korea 3. Open trade between South and North Korea 4. Not oppose (friendly) nations trading with North Korea, provided that it does not involve military goods 5. Allow contacts between representatives of South and North Korea in international forums and to cooperate in areas of interest to the whole Korean nation 6. Cooperate with North Korea in its efforts to improve relations with countries friendly to the South

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The timing of Roh's pronouncement was opportune because world attention was focused on the events in South Korea. The government's concern was to prevent any domestic political turmoil, such as violent street demonstrations and escalating partisan conflicts that could undermine the twenty-fourth Olympic Games scheduled to take place in Seoul, October 2-14, 1988. Despite international apprehension, the hosting of the Olympic Games was successful. Hosting this event enhanced the prestige and reputation of South Korea in the eyes of many nations, especially among the communist-bloc nations of the Soviet Union, China, and Eastern Europe. This accomplishment gave South Korea's democratizing regime the necessary psychological boost and self-confidence to resolve to put into practice the overall objectives ofNordpolitik. Immediately after the closing ceremony of the Olympic Games, President Roh left for New York on a diplomatic mission. Addressing the UN General Assembly on October 18, 1988, President Roh Tae-Woo now used the world forum to continue his foreign policy initiative. He appealed to the world body to assist his government in resolving the problem of Korean reunification. Included in the list of more specific proposals and suggested measures for settling the Korean problems were: • A six-power consultative conference on Korea to be attended by the United States, the Soviet Union, China, Japan, and North and South Korea • A "city of peace" to be built in the Demilitarized Zone (DMZ) to promote South-North rapprochement • A nonaggression declaration and a summit meeting between South and North Korea to discuss outstanding issues, including military matters. (ROK, 1990: 7-8) To underscore the seriousness of its intention, the Roh government announced the following specific follow-up measures. The Economic Planning Board made public on October 10, 1988, a seven-point economic plan to open trade with North Korea by allowing, among other things, South Korean business to trade with North Korea and contact North Korean counterparts in third-party countries, North Korean vessels carrying trade goods to make port calls in South Korea, and North Korean businesses to visit the South for economic exchanges. The Ministry of Culture and Information lifted its ban on public access to information about North Korea and other communist countries. It also announced plans to discontinue propaganda campaigns against North Korea (Korea Newsreview, October 22, 1988). This positive and progressive move toward North Korea's communist regime culminated in the adoption of a new reunification policy. Addressing the National Assembly, President Roh Tae-Woo unveiled South Korea's new unification plan on September 11, 1989. This proposal was aimed at building the Korean National Community (KNC) or Korean Commonwealth as an intermediary stage and preparatory step toward an eventual reunification. Unlike previous proposals, Seoul's

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KNC plan seemed more forward-looking and realistic in terms of stipulating concrete measures and approaches for institution building toward reunification. It advocated a gradual and evolutionary approach toward an eventual system integration of North and South Korea following an experiment in larger community-building efforts (ROK, 1990: 76-86). Seoul's KNC plan was put forward as a feasible alternative to Pyongyang's Democratic Confederal Republic of Koryo (DCRK) plan. Nordpolitik was thus advocated as a new approach to solving inter-Korean problems. It reflected a change in the perception of North Korea by the South Korean elite. For instance, it insisted that North Korea be treated as an equal partner rather than an adversary in inter-Korean dialogue. As a concrete measure, Seoul's new policy pledged to stop slander against North Korea and to assist the country in moving out of isolation from the rest of the world. Accommodation rather than confrontation and working for common prosperity was said to be a preferred strategy. The ultimate objective was for Korean unification and building a single Korean national community was a way station toward that goal.

Evaluation of Nordpolitik In retrospect, these specific suggestions were noble and idealistic, rather than realistic. A great deal of reciprocity and cooperation was needed on the part of the North Korean partner. Whether this unilateral move by Seoul would succeed, of course, depended on how Pyongyang responded to the gestures. The prognosis, based on the lukewarm response by Pyongyang, was not encouraging. Nonetheless, Seoul's bold initiative was well received by its allies and by countries in the former communist bloc. This suggests that the targeted audience of Nordpolitik was more than Pyongyang. The intent was to reach out broadly to Pyongyang's allies as well as broader audiences at home and abroad. Democratization has had some unforeseen positive impacts at home and abroad. Nordpolitik provided an opportunity for South Korean citizens and businesses to interact with communist countries. The door was open, especially for those progressive groups, such as university students, to travel to socialist countries, where they learned firsthand about the deteriorating situations in these countries, and they returned home with a renewed sense of the superiority of the capitalist market system. Nordpolitik was a strong antidote, therefore curing the social disease of rampant radicalism and progressive ideology. Abroad, democratization enhanced South Korea's foreign policy and international standing, while it also helped enhance the legitimacy and consolidation of the democratizing regime at home. Hyun Hong-choo, the former ROK ambassador to the United States, claimed that democratization had worked in at least four ways to assist South Korea's foreign policy and its international standing (Korea Newsreview, October 22, 1988). First, political liberalization had worked to strengthen Korea's alliances with democratic nations, particularly the United States. Second, democratization had accelerated the establishment of relations between Seoul and former socialist countries.

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The success of Nordpolitik was thus related to democratization at home and to the fact that the Soviet Union and countries of Eastern Europe were going through their own reform movements in the late 1980s. These countries were favorably impressed by South Korea's success in democratic transition. Third, Korea's experience in democratization showed that rapid economic development could go hand in hand with political reform and that the ROK was viewed as a model for reform in the former communist countries. Fourth, South Korea's democratization promoted expanded dialogue with the North that subsequently culminated in the signing of a series of inter-Korean agreements in 1992. With public opinion on his side, President Roh was able to seek and establish high-level official contact with the government in Pyongyang in 1990 and establish the protocol for regular meetings between the prime ministers of South and North Korea. Until then, North Korea had conducted no serious negotiation and dialogue in inter-Korean relations and refused to recognize the legitimacy of the South Korean government. South Korea's successful policy strengthened Seoul's diplomatic hand. The isolation of North Korea, in turn, prompted it to attempt its own Southern policy, reaching out to improve relations with Japan and the United States (Kihl, 1991a: 30-45). The pressures exerted by South Korea's Nordpolitik thus led North Korea to meet with South Korea on matters of inter-Korean relations and reunification. Seoul openly admitted that Nordpolitik was an attempt to reach Pyongyang through the latter's allies in Moscow and Beijing. The foremost strategic goal of Nordpolitik, at the initial stage, was to realize cross-recognition of South Korea by the communist allies of North Korea in exchange for cross-recognition of North Korea by South Korea's allies, that is, Japan and the United States, in the belief that this would enhance stability and peace on the Korean Peninsula .. Success in implementing this policy objective led to an expanded agenda, including three types of political, military, and economic goals: enhancing the domestic political status and legitimacy of the Roh government at home, improving military and security postures vis-a-vis North Korea, and promoting economic welfare through trade and economic opportunities abroad with communist countries. Nordpolitik, although developed as a foreign policy initiative, was also motivated by domestic political considerations. It was invented as a means of consolidating the Roh Tae-Woo regime's authority and hold on power. In the first year of the Roh administration, the challenge of a democratizing regime lay in consensus building at home and broadening of the political support base. In this strategic aim, Roh's foreign policy initiative seemed highly effective and successful. Although Roh's Nordpolitik became identified as largely a diplomatic and foreign policy initiative toward the communist-bloc countries, it was presented initially as a new policy initiative toward North Korea and Korean reunification. As such, it received overwhelming public approval. Strictly speaking, Northern diplomacy and Northern policy could be differentiated. Whereas Northern diplomacy was intended as a move to reach out to former

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communist allies of North Korea, Northern policy was a strategic move to force North Korea to abandon its isolation and to open its system to outside forces. Northern diplomacy was a resounding success and became an effective instrument for achieving the short-term objective of peace and stability on the Korean Peninsula. North Korea's admission to UN membership in September 1991 was tangible evidence of Seoul's successful diplomacy. By virtue of its UN membership, North Korea was obligated (as was South Korea) to honor and abide by UN Charter provisions for promoting world peace and harmony, including peaceful settlement of international disputes, and protecting the human rights of its citizenry. Domestic reform and change in inter-Korean relations, however, has been much less effective or successful. Nonetheless, the original intent of Nordpolitik was to induce change and reform in North Korea and a breakthrough in inter-Korean relations that might be attained in the long run, given patience and perseverance and an eventual political transition in the post-Kim II-Sung era in North Korea. The signing of the basic agreement on reconciliation, nonaggression, and exchanges and cooperation between North and South Korea on December 13, 1991, was a hopeful sign that North Korea might reluctantly accept the reality of the changing world after the Cold War, albeit out of necessity rather than conviction (Kihl, 1994a: 343-346).

Kim Young-Sam's Failed North Korea Policy Initiative Foreign policy did not emerge as a main focus during the new administration of President Kim Young-Sam in 1993. Domestic policy, economic growth, and social welfare were more salient to middle-class voters. This was in part the result of successes attributed to Rob's Nordpolitik in the preceding administration. However, Roh 's Nordpolitik seemed to have outlived its usefulness. A new foreign policy agenda was clearly needed from the civilian president Kim Young-Sam. 9 The ending of the Cold War necessitated that Kim Young-Sam's administration reassess its position in the regional balance of power, especially between Japan and China, now that Seoul had successfully normalized relations with all the major powers, including Russia and China. Seoul's search for a new foreign policy entailed reassessing South Korea's options and priorities in the post--Cold War era and formulating a new strategy vis-a-vis the major powers in the region. Pressing matters of the foreign policy agenda included new strategies for curbing North Korea's nuclear ambition and realizing a nuclear-free Korean Peninsula. A five-point Joint Declaration of the Denuclearization of the Korean Peninsula was already negotiated and signed by the respective prime ministers of North and South Korea on December 30, 1991, during the preceding administration (Kihl, 1994a: 347-348). Other foreign policy issues confronting the Kim Young-Sam administration included South Korea's participation as an APEC founding member and its role in the Asia-Pacific regional security and trading system. The global environment during the Kim Young-Sam administration continued to change and offer new challenges and new opportunities for the emerging democratic Korea.

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President Kim Young-Sam, soon after his inauguration on February 25, 1993, proclaimed "a new diplomacy" for South Korea that would incorporate "a futureoriented policy" on the unification issue. His government, as he put it, "will move from the initial step of reconciliation and cooperation to the next step of a Korean Commonwealth, and to a final stage of an united nation of one people and one state." He also accentuated the theme of "open and global diplomacy" and upholding universal values of"democracy, liberty, welfare and human rights" as components of his "new diplomacy" (Kihl, 1994a: 9). This gesture by Seoul was unheeded by Pyongyang. 10 The DPRK president Kim II-Sung unveiled his new 'Ten-Point Program of Great Unity of Korean Nation and Reunification," which was subsequently adopted by North Korea's legislative body on April 7, 1993, as an official policy of the government (Kihl, 1994a: 149). This proclamation, confirmed by his son and successor, Kim Jong-II, as the official North Korean policy, reasserted the founding of "a unified state" based on the principle of "independent, peaceful and neutral" government and "patriotism." It also recognized the principle of "enhancing unity" and promoting "coexistence" and "coprosperity;' as well as building trust "through contacts, travels, and dialogues" between the North and the South. A Korean summit was arranged to take place in July 1994 between President Kim Young-Sam and President Kim II-Sung. It was arranged by former president Jimmy Carter in a third-party role during his earlier meeting with Kim II-Sung in June. This much-anticipated summit meeting in 1994, unfortunately, failed to materialize due to Kim II-Sung's-unexpected death on July 8, 1994. Had the 1994 Korean summit meeting materialized, one wonders whether this would have helped or hindered the cause of opening the way for a new era of amity and cooperation on the Korean Peninsula (Koh, 2000: 260-261). In 1993-1994, North Korea was embroiled in a nuclear showdown with the United States over its ambitious nuclear weapons program. It was not until the Geneva Agreed Framework of October 21, 1994, signed between the DPRK and the United States, that the security threat and tensions on the Korean Peninsula were successfully defused (Kihl and Hayes, 1997). Under this circumstance, there was no assurance that the 1994 inter-Korean summit would have led to a positive outcome between the two Korean states. In his memoir, former president Kim Young-Sam (2000) does not discuss the 1994 planned-but-aborted inter-Korean summit meeting. Instead, he discusses an earlier attempt by North Korea to entice his visit to Pyongyang. He notes that, while on a tour of the Soviet Union in June 1989, "I had a secret talk with North Korean Workers' Party secretary in charge of South Korean affairs, Ho Dam .... The essence of his talk was for me to accompany him immediately to a meeting with Kim II Sung aboard a special plane he flew with .... 'President Kim II Sung is looking forward to seeing you. If the two of you meet, it would prove to be really a great event. A special plane stands ready,' said he. I rejected the offer" (1999: 2-3).

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In fact, the sudden death of Kim Il-Sung had a chilling effect on inter-Korean relations. Kim Young-Sam's failure to issue any statement of condolences, and dealing harshly with South Korean citizens who attempted to pay their respects to the deceased North Korean leader, was used as the pretext by Pyongyang to suspend constructive dialogue with the Kim Young-Sam administration. Nevertheless, Pyongyang requested, and received from Seoul, free rice to deal with serious food shortages. It used a brinkmanship strategy to extract one concession after another from the South without reciprocation for the humanitarian assistance from Seoul. The untimely death of Kim Il-Sung in July 1994 prevented the historic interKorean summit meeting from materializing. It took another six years of gestation before the historic summit meeting between the ROK president Kim Dae-Jung and the DPRK leader Kim Jong-Il on June 15,2000. 11

Engagement (or the Sunshine Policy) Toward North Korea The rapprochement between the leaders of North and South Korea, symbolized by their well-documented embrace at the June 2000 summit, gave reason for hope and new expectations for reconciliation between the two Koreas. Whether the enthusiasm and euphoria generated by this summit would lead to concrete steps on the way to genuine peace and stability on the Korean Peninsula, however, was uncertain from the very beginning. The enthusiasm of the summer was tempered, for instance, by the hard realities of political and economic issues confronted by both Koreas. Pyongyang's emphasis on rebuilding its economy, via partial open-door policies and possible economic reform, gave some hope for a better future for inter-Korean relations. Yet to many South Koreans, the engagement policy toward North Korea appeared to involve one side giving and yielding without due reciprocity from the other. 12

The Sunshine Policy as ROK Grand Strategy: Origins and Background The Kim Dae-Jung government's policy initiative toward North Korea that culminated in the June 2000 Korean summit was popularly known as the sunshine policy (D. J. Kim, 1994a: 33). Its origin dated back to 1994, when Kim Dae-Jung delivered a speech in Washington, D.C., in praise of former president Jimmy Carter's visit to North Korea. His purpose was to defuse the North Korean nuclear crisis through personal diplomacy and negotiation with Kim Il-Sung, the late North Korean president. Citing a well-known Aesop fable on "wind and sunshine," Kim Dae-Jung argued that sunshine was more effective than strong wind in inducing North Korea to come out of isolation and avoid confrontation (Moon, 1999: 36-37). Kim Dae-Jung initially used the analogy of sunshine to persuade the U.S. government to pursue a soft approach in dealing with North Korea. When he was

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elected president, the sunshine policy became the official policy of the Kim DaeJung government. In his inaugural address, President Kim articulated his unification policy by announcing a set of three principles regarding North Korea: "First, we will never tolerate armed provocation of any kind; second, we do not have any intention to undermine or absorb North Korea; and third, we will actively pursue reconciliation and cooperation between the South and the North beginning with those areas that can be made available to us." He also expressed his "hope [that] the two sides will expand cultural and academic exchanges as well as economic exchanges on the basis of separating the economy from politics." For these purposes, he proposed "an exchange of special envoys to promote the implementation of the South-North Basic Agreement," adding that he was "ready to agree to a summit meeting, if North Korea wants" (D. J. Kim, 1998c). The sunshine policy was the instrument through which to achieve Kim DaeJung's strategic vision of Korean unification. Soon after his inauguration, President Kim began using international forums to promote his policy agenda toward North Korea. While attending the second Asia-Europe Meeting in London in 1998, he reiterated the threefold principle of what he called a "comprehensive and flexible" policy toward North Korea: "zero tolerance of military provocation of any kind, no pursuit of absorption of the North, and an active search for reconciliation and cooperation" (Korea Times, April4, 1998). Addressing the London University School of Oriental and African Studies on April4, 1998, President Kim also stated: It is now time for big changes in inter-Korean relations. This is because a new administration has been inaugurated in the South that is pursuing peace and cooperation with flexible and sincere attitude, while maintaining a firm security posture.... I have been steadfast in advocating what I call a Sunshine policy, which seeks to lead North Korea down a path toward peace, reform, and openness through reconciliation, interaction, and cooperation with the South. As President, I will carry out such ideas step by step. (DJ. Kim, 1998a) In presenting this new policy, Kim said he was willing to wait patiently. When his sunshine policy measures took effect, sooner or later, North Korea would change from within. In this sense, Kim Dae-Jung's policy was based on the functionalist notions of gradualism and the evolutionary process of change and advances. Therefore, Kim's sunshine policy of engagement toward the reclusive North Korean regime of Kim Jong-Il could be assessed from the theoretical perspective of the strategy of conflict. As such, the policy epitomizes a rational actor model of foreign policy making as pioneered by such scholars as Thomas Schelling ( 1960) and Graham Allison (Allison and Zelikow, 1999). The rational actor model of foreign policy making is based on a series of assumptions to explain (or predict) a phenomenon, X. This model assumes that X is the action of a state, that the state is a unified actor with a coherent utility function, that it acts in relation to either threats or opportunities, and that its

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action is (or is not expected to be) value maximizing (Allison and Zelikow, 1999: 27). Based on this set of assumptions, one can ask what threats and opportunities arise for the actor? When applied to the Korean situation, who is the central decision maker in North Korea as in South Korea? What is its utility function? Is the objective a survival of the regime, the maximization of power, or the minimization of threat? In order to maximize the actor's objectives in the specified conditions, what is the best choice (27)? The sunshine policy could be seen as a proactive move to induce incremental and voluntary changes in North Korea leading to peace and reforms through a patient pursuit of reconciliation, exchange, and cooperation. But the policy, as Chung-in Moon and others argue, seemed to go beyond simple engagement, because it included several components, such as military deterrence, international collaboration, and domestic consensus (Moon, 1999: 38; Hong, 1999; Lim, 1999). Nevertheless, President Kim Dae-Jung's policy objective was clear: to lay the foundation for peaceful Korean unification by severing the cycle of negative and hostile actions. The structure of the "DJ doctrine," as Moon ( 1999) chooses to call the sunshine policy, had at least five major operating principles, of which the notion of "strategic offensive" was the most pronounced. In the past, Seoul's policy on North Korea was said to be primarily reactive, often resulting in inconsistent, incoherent, and even erratic policy outcomes. An exception to this rule, however, was the Nordpolitik pursued by the ROK government of President Roh Tae-Woo in the late 1980s. The Kim Dae-Jung government wanted to overhaul this passive and reactive policy by taking its own initiative. In this sense, the sunshine policy was an "offensive and proactive" policy, based on self-assurance and strength, instead of appeasement or a weak apologist stance. The remaining features of the DJ doctrine had to do with the operating principle of "flexible dualism," which was predicated, according to Moon (1999), on major changes in the sequential order of inter-Korean interactions. This concept involved dealing with "easy tasks first, and difficult tasks later, economy first, and politics later, non-governmental organizations first, and government later, give first, and take later" (39). Other principles named by Moon range from the principle of "a simultaneous pursuit of engagement and security, in which credible military deterrence was emphasized," to an "emphasis on international collaboration," to that of "the centrality of domestic consensus" (38-43). The Kim Dae-Jung government articulated the ambitious goal of working to dismantle the Cold War structure surrounding the Korean Peninsula, since Korea remained the last frontier of the now -defunct system. The concrete measures to dismantle the Cold War structure included improving inter-Korean relations, normalizing U.S.DPRK relations, normalizing Japan-DPRK relations, encouraging North Korea's participation in the international community, preventing the proliferation of weapons of mass destruction (WMD), accelerating arms control, and replacing the armistice agreement with the North-South Korean peace treaty. The Korea Institute of

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National Unification, a government think tank on unification issues, was engaged full time to explore concrete measures to attain this lofty policy goal. A key step in furthering this policy was a proposed follow-up measure involving a possible U.S.-North Korean summit. Although President Bill Clinton appeared to be open to such a meeting, arrangements were not completed before the end of his term. When George W. Bush, the new U.S. president, decided to delay the U.S.-DPRK talks until completing a comprehensive policy review on overall defense and foreign policy, progress in implementing the sunshine policy slowed dramatically. Kim's March 2001 trip to Washington to solicit President Bush's blessing and support did not succeed; President Bush expressed his skepticism that the North Korean leader could be trusted. Three months later, the Bush administration reversed its stance by offering to conduct bilateral talks with North Korea. But the damage had already been done, and Pyongyang decided not to resume the official dialogue for the time being. The June 2000 Korean Summit Talk: An Analysis

Up until the summer of 2000, for more than a half-century, North and South Korea had remained estranged from each other due to an internecine war (the Korean War [1950--1953]) and cutthroat competition. The two Koreas had persisted in internalizing Cold War norms and values. There were signs of change in the dynamics on the Korean Peninsula, however, with the emergence of new leadership in the two Koreas and the start of the new millennium (Kihl, 1999: 199-232). The summit talks of June 13-15, 2000, in Pyongyang, between ROK president Kim Dae-Jung and DPRK leader Kim Jong-Il, was one manifestation of the peacebuilding process at work. In 2000, the DPRK adopted a new policy initiative characterized by a peaceful dialogue and negotiation with the South Korean government and a limited opening of the door to the socialist "hermit kingdom." Pyongyang was particularly interested in the address that Kim Dae-Jung gave at the Free University in Berlin on March 9, 2000. Kim elaborated his North Korea policy, dubbed the Berlin Declaration. His proposal consisted of calling for (1) resumption of dialogue between the two Koreas, (2) terminating the Cold War on the Korean Peninsula, (3) assisting the economic recovery of the North, and (4) humanitarian assistance to separated families (Korean Unification Bulletin, no. 17, March 2000). These calls, although not new by any means, gave the North Korean leader sufficient incentive to move forward on the ROK proposal. An eyewitness account of the summit meeting described the historical encounter between the two leaders, the first face-to-face meeting of Korean leaders in fifty-three years, as "an extended family gathering .... No vestiges of suspicion, distrust, animosity, and hostility, all of which have long governed the psychic template of the elite and people in both Koreas could be found; war was forgotten, and pear:e was near" (Moon, 2000). The same source continued:

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The climax of the summit meeting came during the farewell luncheon hosted by Chairman Kim Jong-il. Before the official luncheon was started, Vice Marshal Cho Myongrok, the first vice chairman of the National Defense Commission and the third in North Korea's power hierarchy, and Lim Dong-won, director of the National Intelligence Service of South Korea, who is in charge of covert espionage warfare on the North, exchanged brief speeches pledging their support of the summit meeting and the June 15 declaration. (Moon, 2000) The most significant result of the summit meeting was the adoption of the June 15 North-South Joint Declaration. Composed of five items, the declaration generally reaffirmed the "independent" and "peaceful" Korean unification formula (points one and two) with agreements "to promptly resolve humanitarian issues such as exchange visits by separated family members" (point three), to promote economic cooperation and exchanges (point four), and "to hold a dialogue between relevant authorities" (point five) in the two governments. Whereas the first two points were "political" in nature and tended to be "sensitive" and "controversial;' the remaining three points were either "humanitarian," "economic," or "administrative" matters and, therefore, less sensitive and controversial. Subsequently, a series of four inter-Korean ministerial talks were held in Seoul (and Cheju) and Pyongyang, alternately, before the end of 2000. In view of the importance of this agreement, which provides a benchmark to assess and evaluate the subsequent postsummit diplomacy in inter-Korean relations, each of the five-point declarations requires analysis and discussion (Kihl, 2001). The first item stated, "The North and South have agreed to resolve the question of reunification independently and through the joint efforts of the Korean people, who are the masters of the country." This statement is often criticized as having reaffirmed North Korea's traditional position, which emphasizes the principle of independence and autonomy. Nevertheless, the Seoul side took solace in the fact that it omitted references to the exclusion of foreign influence and interference, which in the Korean context, refers to the status of American forces in the South and the U.S.-ROK military alliance. President Kim Dae-Jung was quoted as saying that the most important outcome of his summit conference with North Korea in June was "a common understanding that American troops must stay in South Korea to prevent a vacuum on the Korean peninsula that would be inviting to its neighbors" (Perlez, 2000: A3). During the summit talks, President Kim took the position that when an official peace treaty replaced the current armistice agreement, the American troops in South Korea and on the Japanese island of Okinawa should operate "under the same logic" that governed the continuing presence of American troops in the North Atlantic Treaty Organization after the collapse of the Soviet Union. During his interview with Jane Perlez (2000) while attending the UN General Assembly session in New York, President Kim Dae-Jung categorically stated that North Korea was not insisting on U.S. troop withdrawal from South Korea. If true, this would have represented a significant policy reversal on the part of

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Kim Jong-Il's North Korea. The North Korean authority did not publicly acknowledge reversing its position on the presence of U.S. troops in the South. Therefore, President Kim Dae-Jung's statement continues to be regarded as a nonofficial view. The second item stated, "[A]cknowledging that there is a common element in [the] South's proposal for a confederation and the North's proposal for a loose form of federation as the formulae for achievement of unification, the South and the North agreed to promote reunification in that direction." This statement is not free from ambiguity. It raises the possibilities of varied interpretations and touches on the politically sensitive issue of the mode of Korean unification. It appears to be a compromise between the North Korean unification formula of the DCRK, which was first proposed by the late Kim 11-Sung on October 10, 1980, and the South Korean formula of the Korean Commonwealth plan (i.e., North-South Korea union), as proposed by former president Roh Tae-Woo in 1990 and reformulated by President Kim Young-Sam and President Kim Dae-Jung. The North Korean proposal of confederation, despite its formal name, was said to be much closer to federation than to confederation in the strict sense, according to those close to Kim Dae-Jung. This is so because the DCRK position is predicated on the notion of "one nation, one unified state, two local governments, and two systems." Diplomatic sovereignty and rights over military command and control were assumed to belong to one central government, while other functions were delegated to the jurisdiction of two local governments. The South Korean side countered, based on President Kim Dae-Jung's own Three Stages Approach to Unification, that it was virtually impossible to make a transition from the state of national division and conflict to a complete stage of (con)federation at once (D. J. Kim, 1997). According to him, the stage of federation (yonbang) cannot be reached without going through the stage of confederation (yonhap). His version of confederation was predicated on "one nation, two states, two governments, and two systems," which was similar to the union of states in the European Union or the Commonwealth of Independent States. In the end, the North Korean leader was said to be receptive to the proposal of the South Korean president. They both reportedly agreed on at least two points: first, Korean reunification could be achieved through incremental and functional approaches and, second, the form of confederation (the South Korean proposal) was said to converge with the loose form of federation (the North Korean proposal). With the convergence of discourse on a unification formula, both leaders were said to be in a position to agree to institutionalize confederation or union of North and South Korea by formalizing summit meetings, ministerial meetings, and parliamentary meetings and ultimately developing an umbrella consultative body linking the two Koreas. The third item, dealing with reunion of separated families, stated that "[t]he South and the North had agreed to promptly resolve humanitarian issues such as exchange visits by separated family members and relatives on the occasion of

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the August 15 National Liberation Day and the repatriation of 'unswerving Communists,' who had been given long prison sentences in the South." President Kim Dae-Jung acted promptly to realize the exchange of mutual visits by dispersed family members. Following his return from the Pyongyang summit, his government also promptly arranged to release and turn over North Korean prisoners of conscience without demanding reciprocation from the North. There were a large number of ROK citizens who had been kidnapped and abducted to the North, including an unspecified number of ROK prisoners of war (POWs) dating back to the Korean War years. The return of these people should have been part of the exchange on a quid pro quo basis, according to some critics in South Korea. The fourth item, on promoting economic, social, and cultural exchanges, stipulated that the South and the North have agreed to "consolidate mutual trust by promoting balanced development of the national economy" through economic cooperation and by stimulating cooperation and exchanges in civic, cultural, sports, public health, environmental, and all other fields. Although the economic exchange and cooperation were also included in the previous North-South Korean agreements, such as the 1991 Basic Agreement, the June 15 Declaration was said to treat them not as goals, per se, but as instruments to promote "balanced" development of the "national" economy. This could be interpreted as a promise by Seoul to work toward an integration of the North and South Korean economies, rather than to exploit the economic weakness of the North. The fifth item stated, "The South and the North have agreed to hold a dialogue between relevant authorities in the near future to implement the above agreements expeditiously." Both sides activated official channels of dialogue and negotiation in order to implement this agreement, which was said to be an important fundamental departure from the past. Unlike past practices, in which North Korea circumvented the South Korean government by expanding contacts with civic organizations and business firms, the opening of official dialogue and communication channels claimed to amount to recognition by the North of the South as a legitimate counterpart. If true, this would have been a major accomplishment. Unfortunately, subsequent actions proved to the contrary. The fifth interministerial talks were held November 9-12, 2001, after considerable delay, not in Pyongyang, but at the remote location of the Mt. Kumgang Hotel across the DMZ on the east coast. Needless to say, the meeting failed to produce any meaningful and substantive agreement on pending issues (Korean Unification Bulletin, no. 37, November 2001). The summit meeting and the declaration at least set a benchmark in the long history of an on-and-off pattern in inter-Korean relations. Both leaders expected to use the occasion to further mutual trust and build on a shared view that neither unification by force (the North Korean position in the past) nor unification by absorption (the previous South Korean intention) was acceptable. They initiated the inter-Korean summit meeting without the help of third-party intermediaries.

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With the anticipated return visit of the North Korean leader, Kim Jong-11, to the second Korean summit meeting in Seoul, which ultimately failed to materialize, the possibility of institutionalizing cooperation would have been greater. 13 The future path to Korean reunification remains an open question. At least three scenarios are still possible: reunification by war, reunification by mutual consent, and reunification by default (Kihl, 1994a: 253-259; Pollack and Lee, 1999). Both Korean states seemed to have ruled out the path of reunification by conquest or by absorption. Instead, both Koreas apparently are committed to the path of reunification by agreement, a process that incorporates either a confederation or a "federation of lower stages." In building peaceful relations with North Korea's communist regime, South Korea's Sixth Republic under President Kim Dae-Jung had taken certain risks, which were aimed at enticing the reclusive North Korea under Kim Jong-11 to open itself to the outside world. The successful diplomatic opening of North Korea's hermit kingdom to the Western countries in 2000, including the European Union and Australia, as well as to the Asia-Pacific countries of the Philippines and Australia, is a positive development. Whether Kim Dae-Jung's engagement policy was responsible for this feat is uncertain and arguable at best. Kim's sunshine policy seems to have played an indirect role in persuading the North Korean leader to make up his own mind to move in the direction of engagement with the outside world. Nevertheless, too many uncertainties still lie ahead internationally that will constrain North Korea's foreign policy options. The U.S. determination to root out transnational terrorism after the September 11, 2001, attack on the World Trade Center and the Pentagon led to a dominant concern about global security. The security environment around the Korean Peninsula continues to play a significant role in exacerbating security concerns among the people and nations in the region (Kihl, 2002).

External Impact of Engagement on Major Powers What impacts and implications will the evolving Korean security situation have on each of the major powers surrounding the Korean Peninsula? The major powers with active interest in Korea all welcomed President Kim Dae-Jung's sunshine policy of engagement toward North Korea and the historic North-South Korean summit meeting of June 2000. They have, however, also been reassessing their positions vis-a-vis the Korean Peninsula in the postsummit era to see how the evolving situation will affect their respective national interests. For the United States, a sudden and radical change in the Korean security situation could be seen as a mixed blessing. U.S. policy objectives in Korea have included peace and stability, as well as preventing a sudden collapse of North Korea. The soft-landing policy of the Clinton administration, for instance, was intended to bring about a peaceful transition for North Korea into a relatively open and market-oriented society. This policy was soon abandoned after realizing that

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the North was not likely to collapse in the near future despite the dire domestic situation, with a failing economy and massive food shortages. Security-wise, the United States is committed to preventing and curtailing North Korean development of weapons of mass destruction, including nuclear weapons and ballistic missiles. The Geneva Agreed Framework of October 21, 1994, and its implementing instrument of the Korean Peninsula Energy Development Organization (KEDO), continued to serve as the framework for U.S.-DPRK relations during the Kim presidency. North Korea's surprising "alleged" admission in early October 2002 that it had a uranium enrichment nuclear weapons program, however, put the Geneva Agreed Framework regime in jeopardy and the future of the KEDO operation on hold. In December 2002 the KEDO decided to suspend the supply of light-water reactors and the delivery of heavy oil to North Korea. The Bush administration's response was initially to seek a comprehensive security dialogue on the Korean Peninsula with North Korea that included North Korea's unilaterally abandoning the WMD program as part of the U.S.-led global strategy of war against terrorism in the post-September 11, 2001, security environment. In his January 2002 State of the Union address, Bush named North Korea as part of an "axis of evil" together with Iraq and Iran. Still, the United States continued to be concerned about the appearance of improved North-South Korea relations that might divert international attention away from the issues of North Korean WMDs. South Korean offers of economic assistance, without due reciprocation by the North, were criticized by some members of the Bush foreign policy team. Washington became apprehensive that the sunshine policy might result in losing whatever leverage the United States had in negotiations with the DPRK and also in losing the rationale for the continued stationing of U.S. troops in South Korea. 14 China has the most to gain in the short to medium term for an improved security situation and North-South Korean rapprochement. China is back on the center stage in Korean affairs, as shown by Kim Jong-Il's "secret" China visit, only a few days before the Korean summit was to take place, and his subsequent tour of the Shanghai stock exchanges and other industrial facilities in January 2001. The continuous flow of refugees across the border into China's northeast region has become a serious foreign policy issue for Beijing. China is the only country that can provide food and oil to North Korea. However, as a country that has good relations with both the North and the South, China has been uneasy about the changes in the Korean security situation and may wish to play more of a mediation role. China is particularly interested in preventing the collapse of North Korea as a fellow socialist country. China is also a trade partner with South Korea. China's efforts in promoting an improved economic situation in the North may result in inter-Korean economic exchange and cooperation. This will obviate the need for China to provide massive economic assistance to North Korea. Japan's foreign policy goals toward Korea are focused on maintaining peace

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and stability. For Japan, Korea is a buffer zone between itself and others like China. Japan has supported the presence of U.S. troops both in Korea and Japan as the bulwark for regional peace and stability in the face of expansionist moves by other competing powers like Russia and China. Japan wishes to ensure denuclearization and the curtailing of the North Korean missile program. However, Japan has had only limited involvement in Korean affairs, despite its desire to participate in discussions on the Korean question and to establish normalization of relations with North Korea. Japan's limited security involvement with Korea involved participation in the KEDO project and trilateral policy coordination and consultation efforts with the United States and the ROK on the future of North Korea. Together with Russia, Japan has felt left out of the Four-Party Talks (involving North and South Korea, China, and the United States) that have been called into session on and off since 1996. The pending bilateral issues between Tokyo and Pyongyang have prevented progress in normalization talks between Japan and the DPRK. During the historical one-day visit of Junichiro Koizumi, the Japanese prime minister, to Pyongyang in September 2002, the North Korean leader Kim Jong-Il surprised the world by admitting, and apologizing for, the kidnapping of Japanese citizens by its agents in the 1970s. Despite this confession diplomacy, TokyoPyongyang relations have not improved but rather stalemated with the North Korean nuclear brinkmanship and the announced withdrawal from the International Atomic Energy Agency and the Non-Proliferation Treaty regime in January 2003. Russia is trying to recover lost ground with the Korean security situation by playing catch up with China and the United States in dealing with the two Koreas (Tyler, 2001). During Vladimir Putin's Pyongyang visit in July 2000, the North Korean leader floated the idea of suspending North Korea's long-range missile program in exchange for foreign assistance in what he characterized as "satellite" launches. Seven months later, during Putin's Seoul visit, February 26-27, 2001, Russia made an offer to play a role in inter-Korean reconciliation and North Korea's missile program. It was speculated that Putin had proposed tripartite cooperation with Seoul and Pyongyang in launching North Korean satellites, whereby Russia would assist technically and South Korea would be expected to underwrite the expenses. Putin's trip to Seoul was, therefore, more than a diplomatic protocol. It was a mix of trade and politics. Putin's Pyongyang visit was reciprocated by Kim Jong-Il's trans-Siberian train ride to Moscow in the summer of 2001. The trip took almost one month to complete. Kim's party stopped along the way to promote cultural and business exchange between the two countries. Kim Jong-Il made another visit to Russia in August 2002 and took an "Orient Express" train ride to the Siberian city of Khabarovsk. On both occasions, Kim was met by Konstantin Pulikovsky, the representative of President Putin in Russia's Far East, who subsequently wrote about his experience of riding the rails with Kim Jong-Il. 15

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During the U.S.-ROK summit meeting on March 7, 2001, North Korea dominated the discussions between the two presidents. President Kim Dae-Jung urged the United States to resume missile talks with North Korea and to build on progress made by the Clinton administration toward easing tensions. President Bush said, however, that talks with North Korea "won't resume now" because of that country's "lack of transparency," adding that he was "not certain North Korea is adhering to existing agreements with the United States" (Sanger, 2001; Mufson, 2001 ). A background briefing on the Bush-Kim meeting issued by a senior U.S. official on March 8 stated that Bush expressed support for Kim's policy of engaging the DPRK, but "had reservations about negotiating new deals with the DPRK when compliance with agreements could not be verified." He also discussed U.S. forces in Japan, DPRK troop deployments along the ROK-DPRK border, and proposed a Bush-Kim joint statement in support of new defensive systems to cope with growing threats. President Kim made it clear that he was "not opposed" to Bush administration plans for missile defense and both sides agreed to consult on the matter in the future. Seoul announced on March 27 that the ROK had joined the Missile Technology Control Regime as the thirty-third member of the global missile regime, by agreeing not to give any other country technology to build missiles with a range longer than 187 miles (J. Kim, 2001). Jockeying for an advantageous position of power and influence in the region surrounding the Korean Peninsula continues. This reflects the major powers' attempts not only to checkmate the changing balance of power in the region, but also to protect and preserve their respective interests in interaction with the Korean states. The dominant analytical paradigm regarding the Korean Peninsula has been geopolitical thinking: Korea has played a sensitive role as the buffer and fulcrum in the balance of power among the major powers surrounding the peninsula. Throughout most of its history, Korea has been caught in the rivalry between two or more great powers in the region of Northeast Asia. China and Japan fought over control of the Korean Peninsula from the sixt~enth to the nineteenth centuries. Other continental powers to Korea's north have also intervened in the peninsula, including the Mongols, the Manchus, and the Russians, throughout history. More recently, during the Cold War era, the Korean security agenda was defined largely by considerations of the U.S. global strategy in its ideological competition with the former Soviet Union. The U.S. strategy, as reflected in the Truman Doctrine, was to stem the tide of communist expansionism and contain Soviet power within its existing border. This containment policy was put to the test in Korea when communist North Korea invaded South Korea on June 25, 1950. The dawn of the post-Cold War era and globalization, however, has added economics to the equation of the major power relations in northeast Asia. An end to the Cold War, however, did not mean that security was no longer important in the international politics of East Asia. Rather, it meant that a new

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concept of security had arisen because the foreign policy issues were more complex and tended to be intertwined with economic issues and domestic politics. Korea's security role in the new millennium and age of economic globalization will be determined by the ways in which the emerging trends in its external environment are evaluated, its new foreign policy goals are formulated, and its relationships with its allies and neighbors are managed. The various administrations of the Sixth Republic have pursued, as noted earlier in this chapter, differing policy goals by diversifying diplomatic partnerships and pluralizing policy issues. The South seemed determined to move beyond competition with North Korea and inject a new moral and ethical dimension into diplomacy. What remains to be completed now is the institutionalization of the policy making and implementation processes, especially on matters so important to Korea's future as reunification and the security of the Korean Peninsula. The Korean Peninsula in 2004 had become even more of an explosive powder keg. 16 Following the signing of the armistice agreement on July 28, 1953, an armed peace was restored after the Korean War. In the absence of concluding a peace treaty, such an arrangement of armed truce remains temporary and provisional. Therefore, the start of a second Korean War cannot be ruled out in view of the heightened tensions over North Korea's nuclear ambitions and the nuclear standoff in 2004. The stark reality of the security threat and escalating tensions over North Korean nuclear ambition and acquisition of WMD capability are matters of serious concern for the major powers in the region and for the Korean people. When Roh Moo-Hyun, the new South Korean president, assumed office in February 2003, he immediately confronted major security challenges. Despite his public pronouncement to improve relations with the North, any objectives to promote inter-Korean dialogue and diplomacy with the Kim Jong-Il regime in the North seemed as elusive as ever. 17 Korea's security environment has been influenced by the interacting policies of the four major powers with interests in the regional stability of Korea. All of these powers have publicly supported the reunification of Korea as a long-term goal, but none of them wanted to be involved in a future armed clash or war to end the present division of Korea. The four major powers may thus be said to pursue-at a minimum-a common policy objective of maintaining the status quo and regional stability, thereby preventing the recurrence of armed hostilities on the peninsula . . Within this broad policy consensus, however, the major powers have attempted (separately) to render active military support to their respective Korean allies, so as to improve their security and diplomatic status vis-a-vis the opponent. In the light of these security concerns and the dilemma facing the major powers in the region, Korea needs to institutionalize the peace process on the Korean Peninsula along the lines of the idea of "democratic peace" that will now be discussed.

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Conclusion: "Democratic Peace" and Korea's Future Institutionalization is a key to democratic peace in foreign policy. Ideas must become institutionalized if they are to be of enduring value. Interests and identities become efficient and economic through the process of institutionalization of ideas. One such profound idea is building a community of democratic peace (Russett, 1993). The statement that "democracies very rarely, if ever, make war on each other" is commonly known as the democratic peace proposition. Although this statement must be considered a strong probabilistic observation (democracies rarely fight each other), rather than an absolute "law" (democracies never fight each other), there is sufficient statistical evidence to show that "there is a separate peace among democracies" and that this hypothesis (that democracies rarely fight each other) is now generally, if not universally, accepted (Russett and Oneal, 2001: 43). This idea may also be applied to future relations between North and South Korea. The fact that the engagement policy of the Kim Dae-Jung administration failed to institutionalize the summit talks in 2000 does not augur well for Korea's future dealings on peace and reunification. Nevertheless, in the long run, instituting a democratic peace between the ROK and its neighbors near and far will be the only viable way of promoting peace and security on the Korean Peninsula.

Institutional Logic for Peace Building Why do institutions matter in inter-Korean relations? The answer is that institutions provide a framework that shapes expectations (Nye, 2000: 45). Institutions allow people to believe that there is not going to be a conflict or that there is a propensity toward peace. Institutions lengthen the shadow of the future and reduce the acuteness of a security dilemma. Institutions stabilize expectations in four specific ways. First, institutions provide a sense of continuity: most people expect the United Nations will last for a while. Second, institutions provide an opportunity for reciprocity: there is less need to worry about each transaction (like what happened to postsummit inter-Korean relations) because over time they will likely balance out. Third, institutions provide a flow of information regarding actions and assurances that both sides are obeying the rules jointly agreed on. Finally, institutions provide ways to resolve conflicts: they enable members to negotiate and bargain rather than to go to war and fight. Institutions, in short, create a climate in which expectations of stable peace will develop (Nye, 2000: 45). The democratic peace theory, where liberal democracies do not fight against another liberal democracies, could be said to underlie the foreign policy posture and orientation of all democracies, including South Korea's Sixth Republic, and the actions of future administrations toward Korea's neighbors. 18 A Korean unification based on a type of democratic peace, with an institutionalized framework that reflects this formula, could emerge as a union of democratic and peace-loving states, similar to the European Union.

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If so, the future Korean unification could be achieved by peaceful and genuine association, rather than by war and forceful assimilation of one side by the other. This union could take the form of a federation or a confederation. The temptation to continue a hegemonic unification policy, as pursued by authoritarian regimes in the past, would need to be replaced by genuine reconciliation and reciprocity between the two sides. The nondemocratic approach to Korean peace and reunification, which perpetuates the self-righteous policy stance of each side, has been allowed to persist for too long. Institutions that promote democratic peace between South and North Korea could at least in theory bring peace to the Korean Peninsula. The political formula of the democratic peace institutions in Korea in the days ahead could be flexible. It could resemble any one of the following three types or reflect a combination of some or all of the three models of "enmity, rivalry, and friendship" (Wendt, 1999: 246-312). As such, the social relations between the two Korean states could move from a Hobbesian condition of a war of all against all, to a Lockean culture of restraint, and finally, to a Kantian culture of friendship (1999; Russett and Oneal, 2001). Democratic peace in inter-Korean relations is, however, unlikely to materialize as long as the DPRK continues to remain unyielding as a communist state. North Korea today is heavily armed and appears ready to strike against the South in pursuit of its own "hegemonic" unification policy that is based on a united front campaign strategy. So, until the security threat changes for the better, peaceful institution-building on the Korean Peninsula will remain dormant rather than active. On June 29, 2002, the people in South Korea were in the midst of a monthlong celebration over their successful cohosting with Japan of the 2002 World Cup. There was a celebration over the South Korean national team proceeding to play in a semifinal game. Instead of joining in the enthusiasm created by the World Cup in Korea, the North Korean navy violated the military demarcation line along the DMZ on Korea's west coast. The subsequent armed clashes resulted in the sinking of a South Korean patrol boat, with the loss of four lives and the wounding of twenty sailors. The number of casualties on the North Korean side was unknown at the time, but this clash at sea was a repeat of a similar incident three years earlier. This episode of armed provocation shows the serious nature of the security threat and military confrontation between the two sides of divided Korea. Under this circumstance of armed provocation by the communist North, the ROK as a liberal democracy must be prepared to defend itself from a possible attack and invasion by the North and to wage a war, if necessary, to prevail over the nondemocratic state. A more viable and realistic alternative path toward democratic peace on the Korean Peninsula may be to promote a regionwide mechanism of security cooperation among like-minded countries in Northeast Asia. This multilateral arrangement of security institutions could ultimately result in forcing North Korea, as a nondemocratic country, to promote regional collective security.

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An East Asian regional security community of like-minded states that pursue democratic peace may be fostered as cross-border exchanges are promoted among the regional actors through trade and communication. The underlying logic is that a growing interdependence among the peace-loving participating countries will lead to a greater degree of regional integration and cohesion, in which all will share a common sense of vulnerability.

Regime Change and Democratic Peace: Three Explanations In the context of South Korea's democratic transition, this chapter advanced three propositions as to what relationships, if any, prevail among the overriding concepts of democratization, economic growth, and foreign policy. 19 Two of the three theories regarding economic growth and democratization have proven to be valid up to a point, whereas the third theory on regime type and foreign policy has not been validated. The reason for this assessment needs to be explored. The first theory asserts that South Korea's democratization and economic growth are not always compatible as policy goals. This is somewhat exaggerated because the Roh Tae-Woo government attained reasonable economic growth during its fiveyear tenure in office, by more than doubling the gross national product (GNP) per capita from $3,110 in 1987 to $6,498 in 1991. Although not as high as in the preceding administrations, an average of 7 to 8 percent of the annual GNP growth was certainly high and a respectable economic performance when measured against the world standard. The reasons why some claim that democratization and economic growth are incompatible are linked to the changing nature of state-society relations and the dynamics of regime change. With democratization, the state, in the sense of officeholding by ruling elites, changes its character and its role in society. State autonomy has now been constrained as civil society has become activated. State intervention in the market process in a democratizing country like South Korea's Sixth Republic has been reduced. Democratization means a "continuous regime change in an autonomous state," whereby state autonomy, or state capacity for autonomous action, has become constrained by domestic interests and external pressures. The second theory states that the relationship between democratization and economic growth is not always positive. This claim is also somewhat exaggerated and has proved to be only partially valid. It is assumed that the role of the state in the capitalist market system is different from that in the authoritarian developmental state and in the democratizing state. Successful industrialization during the authoritarian era led to the rise of new social classes and a new set of interests, in addition to the emergence of new elements of civil society occasioned by the democratization of politics. The new democratic state must tailor its policy to suit the interests and demands advanced by activated groups and classes in civil society. The new state intervenes in the process of democratization and economic growth via the middle-class citizenry and helps the regime to broaden its basis of political

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support. In the transition process, middle-class support is the key determinant in democratization. Yet, in the postdemocratization phase, the middle class desires political stability and a conservative regime that is able to sustain law and order. The role of the state has become more diversified and its policies multidimensional, so that the policy of economic growth is sometimes put onto a back burner by a regime that is preoccupied with maintaining continuous political stability and support of the middle class. The third theory asserts that political regime type and economic performance will have no bearing on the success or failure of a country's foreign policy. This statement is proved false in the case of South Korea's experiments in democratic transition. In fact, the causation is the other way around. For example, the regime type (whether authoritarian or democratic) and the economic performance (either high or low growth) will affect the success or failure of the regime's foreign policy. Because South Korea initiated democratization and had a proven record of high economic performance in the past, the Roh regime was able to launch and succeed in the foreign policy initiatives of both Nordpolitik and a new detente with North Korea. Moreover, with the gain toward democratic consolidation, middle-class voters are now more interested in the policy issues of economic growth and social welfare. This is the reason why during the 1992 presidential election campaigns neither foreign policy nor unification policy captured the attention of the South Korean electorate. The public was interested more in the economy and leadership and less in foreign policy and unification policy issues. Although all three leading candidates had their own visions and strategies regarding the kind of Korean reunification they hoped to bring about, they were not questioned extensively on these issues during the presidential campaigns. In fact, the initial enthusiasm for NorthSouth Korean agreements on reconciliation and nonaggression, as well as exchanges and cooperation, died down during the campaigns. Peace and reunification were effectively nonissues during the presidential election campaigns of 1992, 1997, and 2002. In the end, what matters for the future of South Korean democracy is far more predicated on domestic politics than on how foreign policy is conducted. So long as South Korea continues along the path of liberal democracy, its foreign policy will be inspired by the idea of democratic peace. Under these circumstances, the prospect of a Korean Peninsula free of war and conflict is greater. This can be the case despite the momentary decline in foreign policy initiatives and the popularity of the incumbent administration and its reunification strategy toward the failing communist regime in North Korea.

Reunification and Korea's Future The Kim Jong-Il regime of North Korea finally responded favorably to the Seoul government gesture of good will after a hiatus of more than two years. Its shift to

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an accommodative posture was manifest in the form of the Korean summit meeting between the two Korean leaders in June 2000. This was motivated not solely because Pyongyang had come to agree with the premise of Kim Dae-Jung's sunshine policy. Instead, the strategic calculus of the North Korean ruling elite was to use the occasion of improving relations with the South as a means of overcoming the desperate domestic situation involving food shortages and the critical need to rebuild a failing economy with the help of a more dynamic South Korea. 20 For inter-Korean relations to evolve meaningfully, they must proceed according to the rule of reciprocity, which follows the basic norm of all international relations and diplomacy. So far, the record of North-South Korean dialogue and negotiation, since the June 2000 summit, has been largely characterized by one side giving (South Korea) and the other side receiving (North Korea). The Seoul government has been largely yielding to Pyongyang's demands and pressures for special compensation and perks, like food assistance, and the release of "unconverted" communist prisoners in the South. There was no reciprocation involving a North Korean release of South Korean POWs, dating back to the Korean War, or kidnapped fishermen and citizens from the South. In fact, some 19,000 POWs were held captive in the North at the end of the Korean War in 1953. Of these, 351 are still believed to be alive. Only nineteen have returned home to the South by seeking asylum and becoming refugees in a third country. The North has received tangible benefits and payoffs while the South has acquired more symbolism than substance. There is value in the psychological and political gratification that comes with the exchange of mutual visits by divided family members, but that activity could be characterized as a wealthy brother offering a helping hand to an impoverished brother. As time goes by, exchange between the two Koreas must be balanced to be meaningful. In an attempt to revive the inter-Korean dialogue and exchanges, which had failed to materialize except in the six months immediately following the June 2000 Korean summit (Kihl, 2001), President Kim Dae-Jung dispatched his special envoy, Lim Dong-won, to Pyongyang in early April 2002. These efforts seemed to have paid off when a six-point agreement was announced on April 6, featuring the resumption of inter-Korean talks and the revival of economic and other cooperative programs. But on May 6, the day the second meeting of the Committee for Economic Cooperation was to begin in Seoul, the North called off the meeting. In so doing, it condemned the remarks allegedly made by the South's foreign trade minister, despite the ministry's explanation that the remarks had been taken out of context by a Washington Post column. While staying away from official talks with Seoul and shelving inter-Korean economic programs, the North continued to maintain contact with civilians in the South. This was intended to promote the communist united-front campaign strategy. Consequently, North Korea invited hundreds of South Koreans to come to Pyongyang to mark the second anniversary of the proclamation of the NorthSouth Joint Declaration of June 2000. The North Korean leader, who rarely makes

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public appearances, met with South Korean lawmaker Park Geun-hye, who is the daughter of Park Chung-Hee, the strongly anticommunist and former South Korean president. During the preceding seventeen years of democratic experiments, South Korea's Sixth Republic has come a long way to consolidate itself as a new democracy. South Korea also acquired international recognition and respect as a maturing democracy when new foreign policy initiatives, like Nordpolitik and engagement, were developed and put into effect. We tum next to examine the broader lessons and implications that can be drawn from the study of Korean experimentation in democracy building in the face of mounting domestic and foreign policy challenges confronting the Korean people in the new century.

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Part3 Future Prospects

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8 New Democracy for Korean Society and Politics Building social capital will not be easy, but it is the key to making democracy work. 1

Robert D. Putnam, 1993 Democracies, after all, are more likely to be stable, less likely to wage war. They strengthen their civil society. They can provide people with the economic opportunities to build their own homes, not to flee their borders. 2

William J. Clinton Remarks to the forty-ninth session of the UN General Assembly, September 26, 1994 With the inauguration of President Roh Moo-Hyun on February 25, 2003, the old politics of the "three Kims" era finally came to an end. The so-called three Kims era refers to the old guard: an unofficial triumvirate, consisting of former presidents Kim Dae-Jung and Kim Young-Sam and former prime minister Kim JongPil, who dominated Korean politics for decades. A new era of politics was expected to overcome a legacy of strong bossism and regionalism in Korean politics. However, consolidation of new democracy through bold and innovative measures of institutional reform remains to be realized under Roh Moo-Hyun's presidency. The three presidential elections of 1987, 1992, and 1997 were all about voting for a civilian president and "exorcising the demons of a military government" as one columnist put it (Cho, 2002). On December 19,2002, a new civilian president was elected to continue the mandate of democratic consolidation. Luckily for the president-elect, the Asian financial crisis of 1997-1998 had been successfully overcome and left behind as a reminder of the misguided policies of the past. The reality of a government divided between the executive and legislative branches, however, may prevent the popularly elected new president from carrying out his campaign promises for a reform agenda. In 1998, Kim Dae-Jung's presidency began with high expectations and fanfare as a "Government of the People," but his administration ended five years later, achieving much less than was promised. TheRoh Moo-Hyun presidency began, in 269

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2003, with limited expectations and uncertainty, in the subdued environment associated with the subway tragedy in South Korea's third-largest city, Taegu. 3 Whereas the old politics paradigm of the three Kims era was predominantly hierarchical, personalistic, and authoritarian, the new politics of Korean democracy is identified with a horizontal, participatory, and networking style of politics that is open broadly to civil-society groups and based on promoting norms of reciprocity and networks of civic engagement. The Roh Moo-Hyun presidency can be seen as a culmination of such new party politics and effective electoral campaign strategies as an open primary for choosing the presidential candidate, mobilization of a support group (called Nosamo), eleventh-hour voter turnout, and voting on the day of election by the so-called Netizens. 4 The Roh administration recruited some new faces and young reformers to cabinet posts and as presidential assistants. In the first sixteen months of his administration, Roh was besieged by the challenges of overcoming the negative legacy of old politics and moving forward with the agenda of his own new politics. His administration was also overwhelmed by the escalating security threat caused by North Korea's nuclear brinkmanship and the challenge of maintaining South Korea's alliance with the United States. 5 Political institutions, like government forms, types of elections, and the party system have made a critical difference in the political outcome and performance of Korea's new democracy. Korea's Sixth Republic has been a constitutional democracy with a presidential rather than a parliamentary form of government. This fact has made an important difference in modern Korean politics. National and local elections are also held periodically to choose officials in the executive and legislative branches of the government. This practice is based clearly on the constitutional principle of the separation of powers and checks and balances. There has been constant rivalry and friction in the national government between the elected officials in the legislative branch and the president as chief executive of the national government. Local and regional levels of governance are also beginning to experience division in government as a result oflocal-level elections with varying outcomes. Not only do "ideas matter" in Korean politics, but also "institutions matter" and "identities matter" as this chapter on a new democracy for Korean society and politics will contend. The handicap of a divided government also awaited Roh Moo-Hyun, much as it had his predecessor. But unlike the Kim administration, the Roh presidency seems to have overcome the initial difficulty of a divided government through leadership skill and sheer determination to work closely with the National Assembly. Unlike the situation in 1998, Roh was successful in obtaining legislative consent for his prime minister nomination from the opposition-dominant National Assembly. Also, Roh chose to address the National Assembly on April 3 to persuade the lawmakers to vote for a bill to authorize the dispatch of 700 noncombatants to Iraq, among other matters of legislative concern. The assembly vote on the troops dispatch was twice deferred amid street pro-

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tests waged by civic groups and labor unions in opposition to the U.S.-led war on Iraq. Some civic activists threatened a "rejection campaign" against lawmakers if they voted for the troop dispatch bill. In a joint statement, floor leaders of the ruling Millennium Democratic Party (MDP) and the opposition Grand National Party (GNP) said they would cooperate in a "bipartisan" manner in keeping civic groups from linking the bill to next year's parliamentary elections. President Roh, on his part, urged lawmakers and civic activists not to block bringing the bill to a vote. It was speculated, however, that this executive-legislative cooperation might not continue to mark the style of the new Roh government beyond the first year of his five-year term. The reality of a divided government, because of Roh's minority party status in the National Assembly, would certainly constrain the terms of his presidency. This was why the new president considered the forthcoming general election in April 2004 to be decisive and critical for making or breaking his campaign pledges of reform. This chapter and the next will consider whether and how well South Korean politics and society have been transformed via institutional adaptation since the democratic opening of 1987, given the cumulative effects and influence of Korea's successive democratic administrations. An analytic yardstick and criteria are needed to measure and evaluate the democratic governance and performance of Korea's Sixth Republic. We need to ask, for instance, how well are democratic political institutions performing and how fair and open are national and local elections? How fully have the ideas of democratization and modernization been institutionalized in Korean politics and society today? An institutional framework will help us look at the dynamics and processes in Korea's day-to-day local and national politics. This chapter will proceed in four steps: analyzing the rise and role of civil society in democratic consolidation, presenting a portrait of Korea's new democracy in action during the critical double elections (local and presidential) of 2002, assessing institutional change and performance under the Kim Dae-Jung administration and its legacy, and addressing the problems and issues facing Korea's newly elected administration of President Roh Moo-Hyun. The Rise and Role of Civil Society for Democracy

The relationship between capitalist development and political democracy is important to clarify as a basis for considering the social origins of modernity and democracy in Korea. We can begin to examine this relationship by clarifying the nature of the ties between the transformation of society associated with capitalist economic development and the long-term opportunity for democratic rule. As a 1992 study on comparative capitalist development and democracy notes, capitalism transforms the class structure by strengthening the working and middle classes and weakening the landed upper class, with consequences for political participa-

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tion. This is what happened in the advanced capitalist countries in western Europe and in developing areas in Latin America, Central America, and the Caribbean (Rueschemeyer, Stephens, and Stephens, 1992: 7). A similar situation seems to have arisen in South Korea in recent decades. In explaining the transformation of the political economy, including capitalist development and liberal democracy, a big picture of global trends emerges and will affect the political and social landscape of Korea (Mazarr, 1999). Before addressing Korea's problems and future prospects in the new century, it is important to reflect on the rise of civil society and its political impact. Some significant lessons can be drawn from the Korean experience of democratization and democratic consolidation. These relate to the social origins of Korean democracy and the emergence of the modern state. Two forces have interacted particularly to transform Korean society: the formation and activation of the industrial social class and the rise and role of civil society. These forces have brought to the forefront the accompanying issues of democratic rights in the workplace, gender equality, social justice, and anticorruption campaigns. Industrial Working-Class Formation after 1945

The social origins of class formation in modern Korea prior to 1945, as briefly recounted in Chapter 1, had colonial roots. The rise of the working class and its political organization through the union movement started earnestly only with progress in the industrialization of the Korean economy in the 1970s. Commercialization of agriculture in rural Korea as well as urbanization and industrialization owe as much to socioeconomic changes in the colonial period before 1945 as to the authoritarian phase of the Korean political economy during the 1970s, which enabled an export-oriented Korean economy to take off. 6 On the other hand, the political role of middle-class citizens only became activated through the progress of the democracy movement in South Korea's industrializing society. Following Japan's defeat in World War II, many Korean returnees from abroad became actively engaged in the labor movements in liberated Korea between 1945 and 1947. This was an uphill battle for them, however, because Korea was placed under the military occupation of the Allied forces, with the American troops in the South and the Soviet troops in the North, above the thirty-eighth parallel, thus dividing Korea into two halves. The civilian branch of the Allied military government was charged with curtailing street protests and demonstrations demanding jobs and higher wages. With the progress of the industrialization of the economy in the 1970s, the new working class of wage earners and salaried workers in service industries and of public employees came into being. The rural poor had left the countryside en masse in the preceding decades and migrated to the cities in search for employment in factory towns. New industrial estates and company towns arose

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in different locations and many migrants from rural areas settled in these estates and towns as workers. The workers' rights to collective action and bargaining were protected by the constitution, but they were often subject to restraint by the authoritarian state. The Korean labor movement was launched with government-approved unions on the one hand and informal or underground unions on the other (Koo, 2001). A series of changes in labor laws were enacted in the National Assembly in an attempt to circumscribe union activities. Industrial unions were organized, for instance, along Japanese lines as company unions, rather than as trade unions, in order to discourage industry-wide general strikes, which proved to be difficult to control. At the national level, only one organization, the Federation of Korean Trade Unions (FKTU) came into being with the government's blessing, but a rival organization, the Korean Confederation of Trade Unions (KCTU), heir to the "unofficial" or "democratic" unions of the 1980s, came into existence boasting 1.5 million members and exerting influence on some of South Korea's largest enterprises. The KCTU was granted formal legal status in November 1999, which ended the FKTU' s official monopoly on the trade union movement. Because of this earlier attempt by the authoritarian state to repress and exclude organized labor unions, the trade union movement in Korea became militant after 1987, thereby shedding its earlier image of docility and organizational weakness. For instance, Frederick Deyo describes labor in the East Asian newly industrializing countries as playing "a politically marginal and insignificant role in national affairs" and labor movements as remaining "controlled and inconsequential ; .. despite the creation of a vast factory work force over a period of three decades" (1987: 3-5). This depiction seemed outdated in Korea in the 1990s. In the late 1980s, the Korean economy suffered from the rise in labor management disputes and frequent work stoppages and industrial strikes. On June 29, 1987, the announcement of democratic reform set off an explosion of repressed labor discontent. South Korea experienced more strikes in July and August 1987 than in the previous twenty-five years combined. Nearly 70 percent of manufacturing establishments with ten or more employees experienced some kind of labor dispute in the second half of 1987. The number of labor-management disputes surged from 276 in 1986 to 3,749 in 1987 before falling to 1,872 in 1988, to 1,616 in 1989, and back to the levels of a decade earlier by 1990 (Noland, 2000: 37). This uneasy industrial peace continued throughout the 1990s until the 1997-1998 financial crisis, which forced further revisions in labor laws as part of the overall structural reform of the Korean economy by the Kim Dae-Jung administration. At the time of the democratization campaigns, the militancy in the Korean labor movement was led and fueled by a broad-based coalition of labor unions, civic and religious organizations, and university student groups under the political slogan of the "people's movement" (the minjung movement). The people's move-

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ment groups were primarily composed of blue-collar laborers, peasants, the urban poor, students, and other residents in factory towns. The people's movement typically pursued basic structural reforms that were intended to address and overcome political repression and economic inequality. This movement was prepared to wage violent and illegal forms of protest, if necessary, like strikes, demonstrations, and sit-ins.lt was more inclined to challenge the inequality between the elite and the masses and the capitalists and the laborers by appealing to bold measures of rectification and reform. Organized labor has been actively involved in political competition by fielding labor candidates in the parliamentary and local-level elections. Some of the labor candidates were elected as mayors and members of the city council of industrial cities like Ulsan. In the June 2002 local election, about forty labor candidates ran for office, including the Democratic Labor Party (DLP) candidate Song Chul-ho for mayor ofUlsan. This was Song's fifth bid to get an elected post because he had failed in his parliamentary bids in the past. He ran with the progressive campaign promises of introducing special hospitals for industrial disaster victims, part-time workers, and the jobless, and of developing some two-year technology colleges into universities exclusively for laborers. Song's nomination as Ulsan's mayoral candidate was made jointly by the DLP and the KCTU, the latter claiming a membership of 65,000 out of the total230,000 industrial workers in Ulsan, constituting about 32 percent of the city's electorate. In the 1997 presidential election, labor candidate Kwon Young-ghil received 306,026 votes, or 1.22 percent of the total Korean votes. Subsequently, timed with the April 2000 parliamentary elections, the DLP was officially founded in early 2000 with the platform to seek the redistribution of wealth, abolish family-owned conglomerates, and convert some of their affiliates to state-run firms. The DLP sought to nationalize all land, excluding farmland and small privately owned lots. It campaigned actively in the 2000 parliamentary election on a progressive platform that included the adoption of a five-day work week. But repeated attempts to elect the union-endorsed candidates into the National Assembly have not been successful. A political party consisting exclusively of labor union members did not exist as a viable political factor in Korea's Sixth Republic. 7 In the 2002local elections, the DLP received more than the minimum of 5 percent of the total nationally. This enabled the DLP to place its candidate K won Youngghil in the December 19 presidential election as one of three viable candidates and he appeared opposite the major opposition GNP and the governing MDP presidential candidates in three-way national debates and dialogues sponsored by the media. The middle class has emerged with improvements in economic status and lifestyle and has pursued a new interest in politics and society as a whole. Korea's middle class may have objective interests, but in reality class interests have been historically subject to social construction. This was the case, indeed, with the European and Latin American experiences of social class formation, starting with the working class.

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The interests actively pursued by landlords and peasants, industrial entrepreneurs, and urban middle classes, according to one study, were "historically articulated" and could not "be deduced from their objective class situation" (Rueschemeyer, Stephens, and Stephens, 1992: 53). The 1997-1998 economic crisis, for instance, led the South Korean social classes to suffer from the devastating effects of the loss of value in the Korean currency overnight in the world marketplace. The degree and extent of the Korean economic failure varied naturally from class to class, but the loss of middle-class status by many Korean voters brought about significant adverse political consequences. For social classes to pursue collective action for "public good" requires class agents (like the labor union leaders), according to economist Man cur Olson ( 1971 ), that function as (wage) cartels rather than "aiming to focus on broad political class interests and national political goals that are distinct from narrow class interests" (cited in Rueschemeyer, Stephens, and Stephens, 1992: 53). This explains why the class party, whether the working class or the middle class, is unfeasible in the industrial society of Korea, as elsewhere in the world. The class-based DLP, until the 2004 National Assembly election, was not successful in electing its candidates. Other middle-class-oriented political parties and party movements, like the Green Party and the Socialist Party, have not done any better in Korean politics. Basically, what transpired in the political economy of the Korean state is that economic development, driven by capitalist interests under the aegis of the modernizing state, brought about political freedom and democratic participation in government in the post -1987 era. In drawing this analysis and observation, we will need to note that it was not so much the capitalist market or even capitalism that emerged as a new dominant force but rather "the contradictions of capitalism" that advanced the cause of democracy in Korea's Sixth Republic (Rueschemeyer, Stephens, and Stephens, 1992: 7). Civil-Society Activism and Democratic Consolidation

One manifestation of systemic change and transformation, resulting from the progress of capitalist development and democratization, is the rise of civil society (simin sahoe) in contemporary Korea. The role of civil society was central to the success in democratization of politics because, as demonstrated by Kim Sunhyuk (2000), Korean democratization was consistently initiated and promoted by civil-society groups in each of the three "democratic junctures" of Korea's constitutional history in 1956-1961, 1973-1980, and 1984-1987. This finding leads Kim to conclude that "groups in civil society significantly precipitated-if not directly caused-authoritarian breakdowns, facilitated democratic transitions, and, to a large extent, also determined the dynamics of post-transition politics in democratic consolidation" (5). Some of the prominent civil-society groups active in Korea since the demo-

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cratic transition in 1987 include such "citizens' movement (simin undong) groups" as the Korean Council of Citizens' Movement (KCCM, Siminhyop), whose prominent members are the Citizens Coalition for Economic Justice (CCEJ, Kyongsillyon) and the Korea Federation for Environmental Movement (Hwan'gyongnyon). Thirtyeight citizens' movement groups launched the KCCM on September 12, 1994, with a wide-ranging membership of social groups and organizations such as religious, environmental protection, women's, and consumer protection groups, the movement for educational reform, and others. Its stated goal was to make civil society more active by strengthening solidarity and cooperation among the member groups. The specific objective, to realize social development, was fourfold: the autonomy and coordination of citizens' movement groups, the internationalization of citizen movements, the reinforcement of solidarity among citizens' movement groups, and the augmentation of the power of civil society and maximization of participatory democracy (S. Kim, 2000: 106). The participants in the citizens' movement groups have been primarily middleclass citizens, such as white-collar workers, professionals, religious leaders, and intellectuals. Their emphasis has been on gradual institutional reforms rather than on radical structural changes. They have relied mostly on legal and nonviolent methods, such as publicity campaigns, sponsored lectures, and the distribution of information pamphlets. They have focused on wide-ranging social issues, like fair elections, consumer protection, the environment, gender inequality, and the fight against corruption. The most prominent example of civil-society groups active in Korea's political process was the role played by the Citizens Council for Fair Elections (CCFE, Kongsonhyop) during the April 2000 National Assembly election. 8 The CCFE was set up by seven civil-society groups in 1991, including the CCEJ, the FKTU, the Hungsadan, the Federation of Women Voters, the Congress of 300 Free Intellectuals, the Christian Coalition for Fair Elections, and the Buddhist Citizens' Coalition for Fair Elections (S. Kim, 2000: 120). The CCFE consistently demanded the revision of unfair election practices and promoted the cause of doing away with electoral irregularities by holding hearings, publishing reports, sponsoring policy debates, and disseminating information on candidates during elections. On the eve of the 2000 general election, various civil-society groups formed the Citizens' Solidarity for the National Assembly Elections (Ch'ongson yondae) and engaged in a nationwide campaign for rejecting "unfit" candidates. The Citizens' Solidarity not only reviewed the backgrounds of all candidates, but it also selected eighty-six of them who, it claimed, had been involved in antidemocratic acts, corruption, tax evasion, draft dodging, and other illegal and immoral activities, and disclosed the list to the public. Civil-society groups waged a vigorous mass campaign for boycotting these unacceptable and "inappropriate" candidates. As a result of their efforts, among others, some 70 percent of those listed by the Citizens' Solidarity failed to be elected (Hankyore sinmun, April 13, 2000; S. Kim, 2000: 120). The concept of civil society, initially developed in West European countries in

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the eighteenth and nineteenth centuries but made popular in the 1980s in Eastern Europe, represents the realm between the private sphere and the state or the domain of public space that belongs to society rather than to the state (Armstrong, 2002: 2; Hall, 1995; Keane, 1988, 1998). The term was initially evoked in the popular protests against communist party-states in Eastern Europe and referred to such groups as the Solidarity union movement in Poland in the 1980s.lt was also extended into postauthoritarian politics in non-Western countries. Larry Diamond defines "civil society" as "the realm of organized social life that is open, voluntary, self-generating, at least partially self-supporting, autonomous from the state, and bound by a legal order or set of shared rules" (Diamond, 1999: 221 ). Civil society is distinct from "society" in general, according to Diamond, by virtue of its "involving citizens acting collectively in a public sphere to express their interests ... and holding state officials accountable" (ibid.). In the Korean context, it was university students that waged antigovernment street demonstrations against the authoritarian government in the April 1960 student revolution that successfully toppled the First Republic of President Syngman Rhee (1948-1960). The tradition of the university student-led prodemocracy movement was enshrined in Korean politics and contributed to the cause of democracy and pioneering in civil-society action. Subsequently, some university students' civic action groups joined hands with workers to demand labor rights to collective bargaining and improvement in working conditions, under the slogan of the minjung (popular masses) movement against the authoritarian regime in the 1980s (Wells, 1995). The university students' group political action was also joined by the intellectuals and church leaders who were critical of the political repression imposed on the labor union movements by the authoritarian state. Some progressive wing members of the mass media in daily newspapers and radio and television industries also risked their job security by airing the antigovernment and prodemocracy causes in their media coverage. For instance, the Hankyore, a progressive daily newspaper, was launched and sided with the prodemocracy movement. During the authoritarian phase of Korean politics, civil-society groups were in existence, but they were not free from state control and they had to struggle to maintain their autonomy from the state. The state-society relations in the authoritarian phase shifted from the conflict model of a strong state and contentious society into the more complex and dynamic model of interaction between a democratic state and activated civil-society groups. The opposition between state and society, which was often conceptualized in the 1980s as the minjung popular movement, is no longer a useful framework for understanding Korean politics today (Armstrong, 2002: 2). In a rapidly changing Korean society, transformed by capitalist development and democracy, some policy issues will receive more attention by certain civilsociety groups than others. These public interest organizations and groups range from political movement associations, like the university students, organized Ia-

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bor, and protest groups, to social movement organizations of religious associations, women's and human rights, environmental protection, and economic reform. In the construction of civil society, several prodemocracy and social movement associations have subsequently come to play a role in postauthoritarian Korea. The case of the daily newspaper is not atypical. Since the democratic transition, the newspaper industry in Korea has come to enjoy the legal rights of freedom of speech and the press more so than any other time in Korea's constitutional history. More specialized functional civil-society groups have also emerged: citizens' movements for electoral reform and "clean government" and against political corruption. The Korean media since 1988 "have been freer than ever to criticize the government, address formerly taboo issues, and expand with virtually no restraint" (Youm, 1996: 69). In July 1987, there were thirty-two daily newspapers. By the end of November 1994, the number had increased to a total of ninety-nine daily newspapers being published in Korea, more than a threefold increase since the enactment of the Periodicals Act in late 1987 (69). A strong state and an activated civil society have been the hallmarks of the political dynamic in contemporary South Korea, while relations between the two have been at odds much of the time in modern history. But the state-society relationship in "democratic" South Korea need not be a zero-sum game. "For civil society to flourish, a state that guarantees legal rights, democratic freedoms, and the satisfaction of basic social needs is indispensable. Effective democracy, in short, requires both a viable state and a vibrant civil society. South Korea appears to be well on its way to constructing both" (Armstrong, 2002: 7). Korean Electoral Democracy in Action

Many observers note that South Korea has successfully undergone a democratic transition in the years after 1987. However, South Korea has yet to complete its democratic consolidation because this phase of democratization is still going on, with mixed results involving both success and failure (Diamond and Kim, 2000). The general consensus among the experts is that Korean politics is unlikely to undergo a democratic reversal in the foreseeable future. Yet, as a recent study notes, there has been "halting progress" in democratization in Korea, as in Taiwan, because the level of mass public support for new democracy has dwindled and somewhat declined (Chu, Diamond, and Shin, 2001). This surprising development seems to be largely the result of a failure on the part of an incumbent government to meet the high expectations of the citizenry for democratic performance. The Korean bureaucracy served, up until the 1992 election year, as an effective campaign machine that tended to assist the ruling party in both presidential and parliamentary elections. Some of the techniques utilized were mobilization of informal groups, electoral organization support, intelligence gathering, personnel support, and support of ruling party assembly members after election (Chon, 2000: 73). However, the institutional role of the Korean presidency and bureaucracy has

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undergone important changes, according to one study, from one of exerting "absolute power over institutions" to acting as "brokers among often competing private interests and public sectors" (Hahm and Plein, 1997). A significant change of institutional rules and practices also took place in the election system of Korea's Sixth Republic on the eve of the 1987 presidential election. The role of both presidency and bureaucracy was no longer "absolute" in impacting the electoral outcomes. The changes in political fund-raising toward greater openness and transparency, through the institution of the National Election Commission, took care of some of the corrupt practices of political donation and irregularities. The introduction of a local government election system in 1995 largely eliminated the government bureaucracy's overt intervention in elections (Chon, 2000: 80). In a democracy, surveys of public opinions and attitudes are conducted periodically with results that are widely and instantly known to the media. What actually matters more for a liberal democracy is the public mandate manifest through voting behavior and electoral outcomes. Popular elections are conducted in Korea's Sixth Republic to choose political leaders as people's delegates, reflecting a representative democracy, both at the local and national levels. Voting in national elections takes place at regular intervals on two separate occasions: first, selection of the Republic of Korea (ROK) president in a "popular and direct" election to serve a single five-year term in office and, second, selection of members of the National Assembly in general parliamentary elections every four years. Both elections are managed fairly by the National Election Commission (NEC) in accordance with election laws enacted by the National Assembly (Kil and Moon, 2001).

The 2002 Local Elections as a Prelude Voting in local elections also matters in a liberal democracy. What made the locallevel election in 2002 important and noteworthy, from the standpoint of advancing democratic consolidation, was that the forces of globalism and localism came to converge and interact in the Korean context of democratization and globalization. The people in South Korea were excited over the historic cohosting with Japan of the 2002 World Cup soccer championship tournaments that naturally attracted worldwide attention and viewing by sports fans around the world. This 2002 sports event was similar in many ways to the circumstances of South Korea's hosting of the twenty-fourth Summer Olympic Games (1988) in Seoul that accelerated the process of democratic transition with authoritarian withdrawal and democratic opening in 1987. Therefore, an analysis of the June 13, 2002, local elections and the subsequent December 19, 2002, presidential elections will indicate the degree to which the Sixth Republic was able to put "the Korean democracy in action" and to continue its agenda of democratic institution building. Local-level elections were introduced in 1994. This has helped to further democracy and to institutionalize politics. Instituting local autonomy was an integral

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part of promoting democratic consolidation, at least in theory. However, because of the long tradition of central government dominance in Korean politics, South Korea had a long way to go before representative democracy could be fully institutionalized at the grass-roots level. Yet, the fact remains that in a liberal democracy, all politics are primarily local and this would be the case in South Korea's Sixth Republic as well. Foreign and security policies, exclusively the domain of the central government, are, in a democracy, affected not only by the country's international status in external security environments, but also by the domestic political forces and developments on the home front, as they are revealed by the outcome of the local and national elections. The local election results in June 2002, for instance, indicated a landslide victory for South Korea's opposition GNP. This made the 2002 presidential election campaign an uphill battle for the ruling MDP, forcing it to devise a winnable campaign strategy vis-a-vis the opposition political parties. Four years earlier in 1998, the situation was entirely different in that the second local-level election gave victory to President Kim Dae-Jung's ruling party (National Congress for New Politics [NCNP]) that, as a result, increased its political standing in the national politics. The NCNP changed its name, following the local election victory in 1998, to the Millennium Democratic Party. What happened in the 1998 local election, favoring the incumbent president's ruling party, seems to have been an exception rather than the rule. In the other two local-level elections, the incumbent president's ruling party lost the elections, both for President Kim Young-Sam's DLP in 1994 and for President Kim DaeJung's MDP in 2002. In the first local election of Korea's Sixth Republic, on June 27, 1994, the incumbent presidential ruling party suffered defeat by winning only five out of fifteen major city mayoralties and provincial governorships. The ruling DLP registered victory only in Pusan, South and North Kyongsang Provinces, Kyonggi Province, and Inchon, losing the other major cities of Seoul, Taegu, and Kwangju and the rest of the provincial governorships. In the elections of administrative chiefs for smaller cities, counties, and wards, the ruling DLP won only seventy-one, while the opposition Democratic Party (DP), United Liberal Democrats (ULD), and Independent candidates registered victory in eighty-three, twenty-three, and fiftytwo, respectively. In councilman elections for major cities and provinces, the ruling DLP was victorious in only 282, while the opposition DP, ULD, and Independents won in 355, 85, and 149, respectively. In Seoul, the DP won the mayoral election and swept 23 out of 25 city wards, as well as winning 122 out of 133 seats in the city council (Korea Annua/1996, 1997: 116). In the second local election on June 4, 1998, however, the ruling coalition of the presidential party of the NCNP and the ULD won a sweeping victory in the local elections, riding on the popularity of the inauguration of Kim Dae-Jung as the new president only six months earlier. Kim's ruling coalition won ten of sixteen posts for seven major city mayors and nine provincial governors. Although

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voter turnout in the 1998 local elections was low, with 52.6 percent voting, as compared to 68.4 percent in the 1996 parliamentary election and 80.7 percent in the 1997 presidential election, this victory of the incumbent presidential party was interpreted as giving the new president a vote of confidence to carry out his programs of economic reform in the midst of the 1997-1998 Asian financial crisis. The 1998 local elections also demonstrated one of Korea's perennial political problems: the regional rivalry between the Cholla provinces in the southwest, the home base of the incumbent president, and the Kyongsang provinces in the southeast. The third local election was held on June 13, 2002, in the midst of the frenzy associated with South Korea's cohosting the 2002 World Cup. The South Korean voters went to the polls to elect provincial governors, large-city mayors, and members of the local-level assemblies and councils. Media coverage of the World Cup games naturally attracted the worldwide attention of sports fans, but also offered coverage of electoral campaigns and voting in South Korea. This local-level election was considered a fair and free democratic election, since it had been instituted eight years earlier in 1994, during the second year of the Kim Young-Sam administration. The election results indicated that the opposition GNP candidates won eleven of the sixteen gubernatorial and mayoral posts, including those of the capital city, Seoul, and the second-largest city, Pusan. The ruling MDP took only four posts, all of them in the southwest part of the Cholla provinces, which were the stronghold of incumbent President Kim Dae-Jung. One post went to a splinter opposition party, the ULD. The main opposition candidates also took most of the 232 smaller administrative posts. The 2002local election outcomes were similar in some ways to the 1994local elections. In 1994, the ruling DLP of President Kim Young-Sam failed to capture the key provincial governorships and large-city mayoralties. Opposition successes in the 1994local elections enabled opposition politician Kim Dae-Jung to reverse his announced retirement from politics following his defeat in the December 1992 presidential election and to seek national office in the 1997 presidential election. In the subsequent 1998 local elections, the ruling coalition of President Kim DaeJung's NCNP and Kim Jong-Pil's ULD was successful in capturing many of the key provincial governorships and mayoral offices. The success was attributed in part to the timing of the local elections, only six months after the victory in the December 1997 presidential election. Similar political advantages will not be available to the ROK president elected in 2003 because the next local-level election will not take place until 2006. President-electRoh Moo-Hyun stated on December 26,2002, that his campaign pledge to adopt a new power structure should be completed by the end of 2006. The next local-level election scheduled for the summer of 2006, therefore, will not be subject to the new rules contemplated by the Roh administration. The political significance of the 2002 local elections was clear. It could be read

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as the failure of the Kim Dae-Jung administration and his ruling MDP to receive a vote of confidence from the Korean electorate. It also showed that the incumbent president could not dictate the local-level election outcomes. Four years earlier, in 1998, the ruling MDP had surged ahead, following the triumph of Kim Dae-Jung in presidential voting six months earlier. Four years later in 2002, the opposition GNP candidates were the clear winners in the provincial and local-level elections. The main opposition GNP presidential candidate, Lee Hoi-chang, narrowly lost his previous election bid in the December 1997 presidential election to Kim DaeJung. The political tide had changed once again in Korean politics on the eve of the sixteenth presidential election scheduled for December 19, 2002. 9

The Crisis of Governance and Election Cycles In the 2002 presidential election, Lee Hoi-chang initially emerged as a serious candidate. The chance of his party winning improved measurably after his opposition party had won the 2002 local elections. Lee claimed that the ruling party defeat in local elections represented "the peoples' judgment on the government's mismanagement of state affairs" (Korea Herald, June 13, 2002). He indicated that he would reverse many of the Kim Dae-Jung administration policies, including those affecting the economy and inter-Korean relations. The ruling MDP presidential candidate Roh Moo-Hyun and the opposition GNP presidential candidate Lee Hoi-chang were roughly even in opinion polls six months before the scheduled presidential election. Roh tried to distance himself from the policies of the incumbent president and his administration. On July 4, he agreed with the opposition GNP's demand that the president replace the prime minister and ministers of justice as well as several Home Affairs and government administration officials to ensure a fair campaign for the presidential election. The ruling MDP electoral defeat in the June 2002 local elections was the logical outcome of the political scandals associated with the family of the incumbent President Kim Dae-Jung. Two of his three sons were arrested and indicted on charges of bribery and influence peddling. Park K wan-yong, the opposition GNP acting president, called for a probe to investigate influence peddling within President Kim's family. Park revealed his party plan of organizing a special committee to investigate the illegal amassing of money by President Kim's family and the corrupt practices and measures used to confiscate these funds. Park urged that President Kim make a sincere apology to the Korean people for his family's corruption and order an investigation of his three sons. Park's party would start a campaign to bring the government down if the president and ruling party attempted a political cover-up. Park called on the cabinet to resign, since it had lost the confidence of the people. He also called for the resignation of the chief presidential secretary and the head of the National Intelligence Service ("Opposition Calls for Probe into President's Family," 2002). One week after the local election, President Kim's second son, Hong-up, was

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arrested and taken into custody for allegedly taking bribes totaling some 2.28 billion won from business owners and for influence peddling. 10 President Kim made his first apology in person to the nation through a spokeswoman, thereby indirectly expressing his regret over his sons' misconduct. In the statement, President Kim begged forgiveness for breaking his promise to the nation at the beginning of his term that he would not let his family members get involved in bribery and illegal acts. Clearly, the incumbent president repeated his predecessor Kim YoungSam's mistake and mirrored the disgrace he faced as a result of his son's court trial and conviction on bribery charges. Corruption and bribery were still apparently rampant and pervasive, despite the public pledge of rooting out the irregularities. One of President Kim's close confidants was indicted by the Seoul District Public Prosecutor's Office. Yoo Sang-bu, the chair of Pohang Steel Company (POSCO), was indicted without arrest on suspicion that he and the steel giant's vice president exerted pressure on six POSCO subsidiaries and suppliers to purchase shares of Tiger Pools International, the key firm in the influence-peddling scandal involving President Kim's youngest son Hong-gul. Prosecutors said that POSCO officials were suspected of ordering its subsidiaries in July 2000 to purchase a total of 200,000 shares of Tiger Pools at 35,000 won per share, for a total value of 7 billion won, a price higher than the market price at that time ("Prosecutors to Indict POSCO Chair," 2002). President Kim announced a cabinet reshuffle on July 11, replacing seven members and nominating a new female prime minister designate, in an attempt to shore up his administration's dwindling popularity five months before the scheduled December 2002 election. The selection of prime minister designate Chang Sang, a university president and noncareer politician, was seen as a bid to boost the image of the Kim Dae-Jung government following a spate of scandals and a violent naval clash with North Korea on June 29 off the west coast. Although the cabinet overhaul was meant to halt the lame-duck phenomenon among public officials and to produce a neutral cabinet to oversee the presidential election campaigns, the new cabinet left Kim's economic team intact. It retained the ministers in charge of foreign policy, trade, and relations with North Korea, while replacing the defense and justice ministers. The changing political tide in 2002 was manifested by the new distribution of parliament seats in the National Assembly. On the eve of the 2002 presidential election, the ruling MDP lost its control of the speakership of the National Assembly. The new speaker was elected in July 2002 to serve the second half of a fouryear term in office to end in April2004. The new speaker was Park Kwan-yong, a six-term opposition GNP lawmaker who received 136 votes from among the 258 lawmakers present. This election result reflected the distribution of party strength that prevailed in the National Assembly at the time of the speaker election: GNP with 129 seats; the MDP, 111; the ULD, 14; and Independents, 4. There were fifteen vacancies in assembly seats and a by-election was slated to take place on August 8.

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After forty days of inaction and stalemate, the political parties agreed to compromise and normalize the assembly by electing a new speaker. The position of vice speaker was split into two parts as a result of this compromise. This allowed the voting to take place with both the MDP and the ULD fielding candidates. The GNP opted not to present a candidate. On July 9, the assembly proceeded to hold a full session to elect chairmen of seventeen standing committees, each of which comprised nine GNP, six MDP, and two ULD members. Under this arrangement, the ULD gained the most from the compromises, just 5 percent of the assembly seats; it now gained a presence on all the committees and a vice speaker post. The first opposition GNP seemed to have compromised for fear of losing public support in the election year. South Korea's first-ever female nominee for prime minister, Chang Sang, was voted out of office by the National Assembly after an intense, two-day public hearing, in which she was accused of perjury over an inflated academic resume, shady property dealings, and claims that she helped her son to secure U.S. citizenship to avoid the military draft. Out of a total of 244 votes, 142 were against confirmation and 100 in favor, with 1 abstention and 1 vote nullified. This defeat amounted to another setback for lame-duck President Kim Dae-Jung. Instead of taking a party line on confirmation, the major parties failed to come to a consensus, so they let their members vote on an individual basis. The result was that although a considerable number of the ruling MDP members voted in favor of confirmation, many voted against the wishes of the party leadership. To recover from this humiliating defeat, President Kim Dae-Jung named Chang Dae-hwan as a new prime minister designate. Chang was the president of Maeil Business Newspaper and held a doctorate in international business management from New York University. As such, he was a new and fresh face in Korean politics, but his relative youth and the lack of government experience were considered liabilities as well as assets. Chang's questionable business and real estate dealings, however, led to his failure to achieve confirmation in the National Assembly. This led President Kim Dae-Jung to forward yet another new nominee for prime minister. On October 5, the National Assembly confirmed Kim Suk-soo, a former Supreme Court judge, as the new prime minister, by a vote of 210 to 31, with 8 votes being ruled invalid, out of 249 votes cast. The new prime minister was the third choice that President Kim Dae-Jung presented for parliamentary endorsement for the number-two post in his administration. Under the constitution, the prime minister is in line to succeed the president in the case of a vacancy. The prime minister works to aid the president, on the one hand, and to hold him in check, on the other hand. The role of prime minister, among others, is to nominate members of the cabinet and to recommend their dismissal to the president. Also, as a former chairman of the NEC, which was set up as an impartial body to supervise the national elections, Kim Suk-soo was expected to devote himself to managing the December 19 presidential election in a fair manner.

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The result of the National Assembly August 8 by-elections led to a GNP sweep. They took eleven out of thirteen seats up for grabs. The ruling MDP was only able to hold on to two seats, in Kwangju and Kunsan, in the southwest region. This victory allowed the opposition GNP to increase its seats from 128 to 139, leaving the MDP with 113 seats. The ULD held fourteen seats and the Independents six seats. There was talk of a ruling MDP rift and possible breakaway of some members to form a new political party. This would have made the MDP presidential candidate Roh Moo-Hyun suffer further from an eroding power base as the 2002 presidential campaign progressed. Politics of Opinion Polls and Campaign Strategy On November 27, the eve of the launching of the 2002 presidential election campaign, several presidential hopefuls and candidates had already been jockeying for position in an attempt to receive voter support in the election. The election law restricts the official campaigns for presidency to begin only three weeks prior to the election date. In a democracy, opinion polls on candidates and parties form an important part of the electoral process. The approval ratings for each of the candidates had risen and fallen throughout the year. There were three serious contenders on the eve of the election: the front-runner Lee Hoi-chang of the conservative GNP, who had maintained relatively stable voter support throughout the year, Roh Moo-Hyun of the progovernment MDP, and Chung Mong-joon of the National Alliance 21. Both Roh and Chung saw their popularity fluctuate in the months leading up to November. Disputes over polls dominated headlines, while differences over issues remained secondary in a three-way campaign among contenders. In the early months of 2002, Lee Hoi-chang was the indisputable opinion poll favorite, running ahead of all other presidential hopefuls by over 10 percent points. In March, with the start of primaries to select a presidential nominee, the ruling MDP picked Roh Moo-Hyun, a former human rights lawyer, as its standard bearer. According to a Gallup Poll survey conducted on March 6, three days prior to the MDP primaries, Roh obtained 32.3 percent of voter support, trailing Lee by 13.8 percentage points in a two-way contest. In the March 16 poll, however, Roh's support increased to 39.6 percent against Lee's 37.3 percent. With his reformist, down-to-earth image, Roh's popularity surged to over 50 percent in mid-April. But Roh's burgeoning popularity ended abruptly with a spate of corruption scandals involving President Kim Dae-Jung's family members. The opposition GNP, emerging as the majority party in parliament, billed Roh as a protege of President Kim, while Roh refrained from criticizing the first family. In early June, Lee took back his lead from Roh and consolidated his hold as the frontrunner following the GNP's overwhelming victory in the June 13 local elections. The June 29 Gallup Poll found that Lee garnered 44.8 percent, compared with Roh's 38.6 percent.

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Lee's return to the top of the opinion polls, however, failed to capture as much public attention as the month-long World Cup soccer games that began May 31. With the national soccer team's stunning performance, Representative Chung Mongjoon, who was both president of the Korea Football Association and vice president of the Federation Internationale de Football Association (FIFA), emerged as Lee's newest challenger. Although the media was initially ambivalent toward Chung, the sixth son of the late Chung Ju-yung, the Hyundai founder, the June 29 Gallup Poll placed Chung, an Independent lawmaker, a distant third behind Lee and Rob in a hypothetical three-way competition. Soon after Chung saw his standing soar in the polls, similar to what Roh had experienced several months earlier, Chung's popularity peaked in mid-August, as millionaire Chung outran both Lee and Roh.I 1 In a three-way match-up, Lee ran ahead of his two rivals by 13 to 19 percentage points in polls over the weeks in November. But in the event that Lee would face only Roh or Chung, his lead would fall to within the margin of error, and in some surveys, he would outright lose. For instance, in the November 16 Gallup Poll survey, Lee received 36.1 percent, ahead of both Rob with 22.5 percent and Chung with 21.7 percent. In this case, Roh would compete with Lee as a unified candidate, however, the difference would narrow to 4 percent. In a similar two-way race, Chung would receive 38.6 percent against Lee's 39.8 percent. Given these circumstances, Roh Moo-Hyun and Chung Mong-joon reached a last-minute agreement to produce a single unified candidate to take on front-runner Lee Hoi-chang in the forthcoming presidential election. In an agreement, which was made after days of negotiation, Roh and Chung agreed to hold a televised debate on Friday evening, November 22. The dramatic deal was struck as Roh accepted the Chung camp's demand that a poll be conducted after the debate with a safeguard to keep the supporters of Lee from voting for either Chung or Rob. They believed that Lee would have an easier time against Roh than Chung. The two sides did not disclose further details of the new polls so as to ensure the fairness of the opinion surveys. But they said they would aim to hold public polls around November 23-24 so as to nominate a unified candidate by November 26, one day before the November 27-28 candidate registration period closed. This was the first time in Korea's constitutional history that two rival candidates chose to hold a television debate to determine who should run against a more popular candidate. Lee and his aides at the GNP accused Roh and Chung of staging a "fraud" and also criticized the election watchdog for allowing them to hold a television debate. The GNP said the television debate would discriminate against Lee. The debate, broadcast from a studio of the Korean Broadcasting Institute, focused on six topics: unified candidacy, politics, economy, foreign affairs-security, North Korea, and social and cultural issues. Roh, a self-educated former lawyer, tried to tie Chung, a son of the founder of the Hyundai group, to various allegations and scandals involving the business conglomerate. Chung fired back, saying, "You believe what Lee's Grand National Party has repeated for the past three months. If it's true, I will resign my candi-

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dacy" ("Roh, Chung Face off in TV Duel," 2002). Roh cast doubt on whether Chung would be able to conduct an investigation into the case involving his family members, if elected president. This was a heated debate over an allegation that the Hyundai Marine Company made a clandestine payment of $400 million to North Korea on behalf of the Kim Dae-Jung administration to buy the 2000 inter-Korean summit, as reported. Chung retorted, saying, "You can ask it of President Kim. Your MDP can open a parliamentary investigation into it" (ibid.). Chung tried to paint Roh as an anti-American politician. "You said you will not visit the United States only to have a picture taken. You said you will not kowtow to U.S. leaders. I hope you refine your way of speaking as a presidential candidate," Chung said. Roh criticized Chung, saying, "It is ill-mannered to take issue with one's way of speaking at a place like this" ("Roh, Chung Face off in TV Duel," 2002). In the subsequent public survey by Research and Research, a private group commissioned by the two election camps, Roh Moo-Hyun of the MDP drew 46.8 percent support while Chung Mong-joon of the National Alliance 21 took 42.2 percent. This poll asked a sample of 2,000 people their preference among the three candidates. The 67.9 percent who did not select Lee were then asked to state their preference between Roh and Chung. Accepting the opinion survey results, Chung withdrew his candidacy with a promise to campaign for Roh, now a single unified candidate, against Lee Hoi-chang of the GNP. Roh said he would, if elected, "repay a debt of gratitude" in return for Chung's support. According to a Dong-a Ilbo newspaper survey, Roh would defeat Lee with a margin of 40.6 percent to 37.2 percent. The majority GNP earlier unveiled its 200-point presidential campaign pledge, which included the eradication of corruption and a suspension of cash aid to North Korea. It would set up the Korea Independent Commission against Corruption that would monitor any wrongdoings by government officials, including those by the president and his family members. It would also strengthen the authority of the prime minister and undertake a series of reorganizations of the institutions of the executive branch, including the Ministry of Government Administration and Home Affairs as well as the Foreign Affairs and Trade Ministry. On economic affairs, the party pledged to attain the goal of $25,000 per capita GNP within ten years from 2003, while promising to assist farmers and small- and medium-sized businesses (Korea Herald, November 13, 2002). The progovernment MDP likewise unveiled its 150-point campaign pledge, which included the holding of inter-Korean summits and ministerial talks on a regular basis. It also pledged to establish a state investigative agency and to delve into corruption scandals involving ranking government officials and members of the presidential family. The party would revise the constitution to change the present power structure that gives too much power to the president. It would reinforce the role of the prime minister, institutionalize primaries, and introduce a Germanstyle "two-vote" system that would allow voters to cast two ballots-one for a candidate and the other for a political party. Roh pledged to relocate the nation's

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capital by moving the government to a new site in Chungchong Province, as a way of promoting balanced regional development for Korea. He would seek a fair and transparent economic system, through chaebol reform, that would transform Korea into a new center of business in East Asia (Korea Herald, November 19, 2002). With the official launching of presidential campaigns scheduled for November 27, the NEC started to crack down on some candidates' support groups that had allegedly been engaged in illegal electioneering. The commission ordered them to disband and close their home pages on the Internet, while requesting the prosecution to conduct legal proceedings against the group managers. Six Internet sites were singled out for promoting the candidates: one for Roh Moo-Hyun, two for Lee Hoi-chang, and three for Chung Mong-joon. Nosamo, which in Korean signified a group of people supporting Roh, claimed to have about 60,000 members nationwide. The NEC said Nosamo violated the election law by publicly declaring support for Roh and appealing to supporters to donate campaign money through coin boxes. The NEC also charged that a group of alleged mountain climbers, with 394 of its members affiliated with the GNP's occupational committee, bused 5,000 voters to a scenic provincial mountain free of charge in September ("Candidate Support Groups Handed Order to Shut Down," 2002). Both Nosamo and the MDP countered that supporters' small-sum contributions were intended to allow Roh to campaign without resorting to large businesses and other unsavory sources of money for election funds. The GNP said it had already taken measures to ensure that Lee's private organization did not violate the election law. National Alliance 21 also defended the Chung supporters' group, saying that the group was formed and operated voluntarily by the members and that Chung never participated in its meetings. On December 19, 2002, the South Korean voters went to the polls to make a clear-cut choice between the two leading presidential candidates: Lee Hoi-chang as the opposition, conservative GNP candidate, and Roh Moo-Hyun as the pro government, progressive MDP candidate. Lee, a former Supreme Court justice and also a former prime minister in the Kim Young-Sam administration, had been critical of President Kim Dae-Jung's "sunshine policy" of reconciliation with North Korea, accusing the president of having made too many concessions to North Korea, while getting little or nothing in return. He said South Korea should stop all aid to North Korea until it would give up its nuclear program. His party, now controlling a majority of seats in the National Assembly, had blocked legislation advocated by the Kim government, including that advocating the chaebol reforms. Roh, who became a lawyer specializing in human rights cases even though he never attended college, ran on the populist and pro-labor platform. After winning the first-ever primaries held by the ruling MDP, Roh had cultivated his reformist, down-to-earth image among the voters. He went on record to support Kim DaeJung's efforts at rapprochement with North Korea as well as economic reform. He was often described as politically to the left of President Kim Dae-Jung, who earlier resigned as head of the ruling MDP. He also questioned the need for U.S.

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troops in South Korea and had promised to dedicate his presidency to battling the chaebol, while defending the rights of workers (Kirk, 2002b). When the result of the polls was known, Roh Moo-Hyun emerged as a victor over Lee Hoi-chang with only a 2.3 percent margin of difference between the two: Roh with 49.1 percent and Lee with 46.8 percent of those voting. The result of the sixteenth presidential election and its political meaning and significance will be examined at the end of this chapter. Next, we turn to examine the performance and legacy of the Kim Dae-Jung administration.

Assessing Institutional Change and Administrative Performance: The Policy Challenges and Leadership Responses During his five years in office, President Kim Dae-Jung came under attack from his political opponents for being an "imperial" president in his leadership style. This style was manifested when he made key policy decisions, including the North Korea initiatives, as part of his sunshine policy. He did not involve the legislative body of the National Assembly, which was constitutionally empowered to review the president's policy programs. Kim often proceeded without consulting either the opposition majority or even his own supporters in parliament. The "imperial" presidency is a manifestation of the institutional imbalance in Korea's new democracy as well as a style of presidential leadership peculiar to Kim Dae-Jung. This executive dominance requires rectification. During the 2002 presidential campaigns, all candidates promised transparency and honesty as the hallmarks of governance, if elected. The president-elect Roh Moo-Hyun pledged that his government would continue the reform programs and policies of his predecessor, including Kim Dae-Jung's engagement policy toward the North. However, his incoming government would want to review the record of his predecessor, Kim Dae-Jung, as a first order of business, despite Roh's popular designation as Kim's successor. A more consensual style of decision making was essential as a next step in the process of developing a fully democratic government. Roh would join the ranks of eight presidents who preceded him since the founding of the ROK in 1948. Most of the ROK presidents, including his two immediate predecessors, had been deemed failures, as they met tragic or ignominious ends. The first president, Syngman Rhee (1948-1960), was overthrown and expelled from the country, Yun Po-sun (1960-1961) was ousted in a military coup, Park Chung-Hee (1961-1979) was assassinated by one of his own men, Choi Kyu-ha (1979-1980) was an interim president and largely ineffective, and the next two presidents, Chun Doo-Hwan (1980-1988) and Roh Tae-Woo (1988-1993), went to jail after being placed on public trial on charges of bribery and corruption. The two civilian presidents, Kim Young-Sam (1993-1998) and Kim Dae-Jung (19982003), who replaced the "military dictators" of Park, Chun, and Roh, were hailed as champions of democracy when inaugurated, but were blamed as ineffective, incompetent, or "imperial" as they finished their respective terms as president.

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The two civilian presidents and their administrations turned out to be, according to one columnist, as "authoritative, corrupt, self-righteous and arbitrary as their predecessors." The jury was still out in the case of the then incumbent, Kim Dae-Jung, but the style and manner with which the two Kims governed the country were not much different from others in three specific aspects: "corruption," "intolerance of public criticism," and Jack of "transparency in administrative styles." They each made some of the most important decisions behind closed doors (Cho, 2002). Whether the newly instituted Roh Moo-Hyun administration can live up to the promise and expectation of a "clean and transparent government" will remain to be seen. There is bound to be a gap between the promise and the performance of Roh's political administration. If we go by the public pledges and the campaign platform to prioritize reform, the tone of the new administration seems to be right on target. Roh envisioned a "new" kind of politics, based on political reform, national unity, and the elimination of regional rivalry. Proposed measures to reform local politics, which were said to be "sullied by high-profile corruption, regionalism, authoritarian leadership, and factional feuds," would include setting up of a state investigative agency to deal exclusively with bribery cases involving ranking officials and the first family; amending the current constituency system along a German-type two-vote system in parliamentary elections, under which voters would cast two ballots-one for a candidate and one for a political party; and dissolving the MDP to form a new party by opening the doors to outside politicians and broadening the party's support base (H. Kim, 2002). During the campaign, Roh pledged to promote a constitutional revision to reduce presidential power and to relegate parts of the office and its authority to the prime minister. As president-elect, Roh stated, however, that discussions should start in 2006 and be completed before 2007. This would involve a change in the constitution in such fundamental matters as to whether to have a parliamentary system or a shared power of presidency. 12 Roh also said that he would attempt to share power with the new prime minister after the 2004 April general elections. This was in line with Roh's earlier promise to allocate the premiership to the party winning the majority in the seventeenth general National Assembly election. Whether the ruling or opposition party captures the simple majority in the next parliamentary election, in April 2004, will thus make a critical difference in the political life and stability of Korean democracy. As president-elect, Roh reaffirmed his commitment to "market reforms" and his desire to sanitize the practices of the chaebol to improve the competitiveness and efficiency of the economy. As a former labor and human rights lawyer, Roh is also on the record as promising to ensure labor flexibility by trying to "remove any unreasonable hurdles," alluding to restrictions on the mobility of the workforce. He has also pledged to introduce a system under which foreign workers' rights would be better protected in Korea.

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These and other reform priorities and measures as announced seem reasonable and, if implemented, would enhance the efficiency of the political economy of Korea's new democracy within the next few years. What is less known and more problematic at this stage, however, is Roh's unproven record of executive performance and any empirical evidence of his prior leadership. What will count in the end is not so much the rhetoric of the democratic creeds and commitment as the leadership style and skills of the president in his day-to-day operation of the government. If the democratic presidents have been seen to be as authoritative and selfrighteous as their dictatorial predecessors in Korean politics, it is partly because of their governing style. The leaders were affected by the long-standing practices and systems of politics that bestowed enormous power on the chief executive. Also, in a post-Confucian Korean society, many people tend to see an authoritarian president as a strong, even admirable leader, rather than an anomaly in a democratic system. Despite all these handicaps, it is hoped that the newly elected president may turn out to be truly exceptional-one whom the Korean people can admire, respect, and remember long after he ends his term in office. In the age of democratization, one needs to take a fresh look at institutional imbalance and the weaknesses of contemporary Korean politics. With this in mind, the recent book Understanding Korean Politics: An Introduction (Kil and Moon, 2001) identifies a set of four "legacies" from which South Korean politics claims it still suffers: "narrow ideological spectrum," "authoritarianism," "bureaucratic state," and the questionable "revolution from above." Such legacies must be dispelled. Since the 1987 democratic opening, Korean politics has gone through fundamental changes and democratization. The Continuing Saga of Implementing Economic Reform

With the decline in the political fortunes of the ruling MDP in theN ational Assembly, there was greater danger of a slowdown and even a reversal in the implementation of the economic reform measures adopted by the Kim Dae-Jung administration. Yet, most of the structural reforms of the economy in four specific sectors, as already instituted by the Kim Dae-Jung government under the International Monetary Fund (IMF) supervision, were expected to continue into the next administration in March 2003. The basic four-sector structural reforms of the economy, first of all, were not likely to be dismantled because that would mean sending the Korean economy back to pre-1998 conditions and risking a vicious cycle of economic failures. Some of the structural measures already introduced remained unfinished and would require continued government expenditures. Many of them would also require effective governmental leadership and the political will to move forward with the replenished reform measures, even when a new administration under a different political party would come to power in 2003.

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After separating the causes of Korea's 1997-1998 financial crisis into internal and external factors, one study characterizes the Kim Dae-Jung government as giving emphasis to the former over the latter in its structural reform policy. Included among the internal causes were overinvestment due to government-business collusion, lack of flexibility in the labor market, and politically motivated restraints on economic activity. Another set of issues were the lack of accurate information on corporate performance as a result of non transparency, corporate decision making controlled by a handful of major shareholders, and misdirected financial supervision by regulatory authorities. Included among the external causes of the financial crisis were unregulated flows of international capital, an unstable international financial system, and misguided IMF-mandated crisis management measures, as well as an ineffective foreign exchange rate system and a herd mentality that led to the self-fulfilling expectations of individuals and corporations in Korea (C. P. Lee, 2001: 100). Korea's economic reform under the Kim Dae-Jung government was undertaken, according to this study, without a comprehensive blueprint except for political slogans and a vague notion of "the parallel development of democracy and a market economy" (D.J. Kim, 1998c). This was more useful as a guideline for implementing an internal reform of the economy rather than helping to address the international economic causes of the financial crisis. It considered the external factors as beyond its control. As a result, restructuring efforts have led to more progress in certain areas than in others. Global standards of transparency in corporate governance and the Bank for International Settlement capital adequacy ratios for financial institutions, for instance, were difficult to apply. These measures required more time to implement and institutionalize than was initially planned and expected. Public-sector reform was meant to focus on curtailing the excessive rights of public servants and quasipublic officials, while at the same time making government smaller and more efficient by reducing the number of government employees. This limited the scale of administrative reorganization. The government immediately faced a lack of cooperation from public officials because they perceived a threat to their own status and employment. Labor market reform was aimed at promoting greater flexibility in the labor sector by having wages and employment determined by supply and demand. In the absence of an adequate social safety net, however, labor market flexibility was translated into lower wages with rising unemployment threatening the livelihood of the working class. Initially, the Kim government scored a legislative victory in labor market reform by incorporating increased flexibility. Kim sought a compromise on labor issues by establishing a tripartite commission composed of representatives from labor, management, and the government. These efforts have produced mixed results, however, because of widespread disagreement among the commission's members, particularly between labor and management. As a result, the government largely failed to come up with acceptable solutions to the country's labor problems.

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Criticism of the Kim Dae-Jung government's policies on economic reform was reported in the daily newspapers and stimulated public concern. Charges ranged from general attacks on "failed government," "weak government leadership," and the "same old story," to the more specific charges of "stalled reform," "government incapability," "dated production structure," and the "faltering competitiveness" of the Korean economy. On matters of financial reform, the Chason Ilbo carried a series of special reports highlighting "non performing loans" and "intensified government influence in financing." The Kim Dae-Jung government spent public funds to bail out ailing financial institutions, including banks and a selected number of business conglomerates. While the Daewoo business group was allowed to fail, the Hyundai business group received leniency and favors from the Kim Dae-Jung government. Hyundai's Mt. Kumgang tourism project, as initiated by the late Hyundai group honorary chairman, was not financially viable. Nevertheless, it was given a government subsidy on the grounds that it was in line with the government's sunshine policy initiative toward North Korea. This illustrated the uneven application of the structural reform of the economy pursued by the Korean government under President Kim Dae-Jung. The long-term national burden of raising public funds to support the programs of structural reform of the economy, however, has become a serious matter of concern in the public mind. The Ministry of Finance and Economy issued a report on the operation of public funds in 2002 and estimated that the amount of public funds to be injected into ailing institutions would total 156 trillion won (or about $130 billion) (ROK, MOFE, 2002: 5-6). Of this amount, only 41 trillion won had been recovered and 45 trillion won would be additionally recovered sooner or later, leaving the remaining 70 trillion won (or about $64 billion) with no plans for recovery. Of this total 70 trillion won of lost funds, 18 trillion won represented interest payments to be covered by taxpayers' money in the years to come. Some of this amount was reflected in the government's budget, and the future administration would also be bound by the obligation. This irrecoverable amount represents 1.89 million won per capita. Paying off Korea's public debt has thus become a new political issue. This huge public debt will pose a formidable barrier to renewed economic growth over the next decades and beyond. There was also a concern over Korea's foreign debt continuously rising rather than declining. The country's total external liabilities reached a high of $125.8 billion at the end of June 2002, according to the MOFE report, considerably higher than the $119.5 billion reached three months earlier. With the country's foreign currency reserves rising sharply, Korea once again became a creditor nation (ROK, MOFE, 2002: 4).

The Legacy of Kim Dae-]ung's Presidency In examining the legacy of Kim Dae-Jung's presidency, we can differentiate Kim's accomplishments, for the purpose of analysis, into two separate areas: the domes-

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tic policy arena and foreign policy and inter-Korean relations. On the domestic policy side, the Kim Dae-Jung presidency suffered from a political handicap, since his ruling party, the National Congress of New Politics (NCNP), was a minority party in parliament. Following his inauguration in February 1998, the Kim government started with a bold program of reforming the political and economic systems of South Korea. A list consisting of 100 reform measures was adopted by Kim's transition team with much fanfare. To put the major legislative bills through the National Assembly, the Kim government had to rely on the support of its coalition partner, Kim Jong-Pil's ULD. This strategy of building a ruling coalition with the ULD and giving up the prime minister position to Kim Jong-Pil presented difficulties from the very beginning. Two years later, in the sixteenth general election in April2000, Kim's ruling party, now called the MDP, failed to capture enough seats in the National Assembly to become the majority party. Under IMF supervision, the Korean economy was mandated to undergo a restructuring. The government reform policies were possible and effective only to the extent that domestic political support was available to pass legislation in the National Assembly. The Kim administration experienced difficulties from the outset in pushing the reform measures that required legislative enactment through the National Assembly. During the first six months in 1998, most of the 100 major reform measures failed to materialize for lack of legislative support and partisan compromise. Fortunately for the nation, the National Assembly had already enacted a total of thirteen financial reform bills during the month of December 1997. This enabled the incoming Kim Dae-Jung government to identify and consolidate its major reform packages into four specific areas of economic reform and to direct its primary efforts in each of these areas: financial, corporate, labor, and public enterprise sectors. The April 2000 general election, as already noted in Chapter 6, was a referendum on Kim Dae-Jung's midterm performance on economic recovery and restructuring reform. Because of the failure of his ruling MDP to capture the majority of seats in the National Assembly, President Kim was forced once again to rely on a coalition with a downsized ULD by making its leader, Lee Han-dong, the new prime minister. This arrangement lasted only for fifteen months until, on September 3, 2001, the ULD members sided with the opposition GNP to pass a vote of no-confidence-by a vote of 148 to 119--on a key cabinet member, Lim Dongwon, who was in charge of the government engagement policy toward North Korea. The September 2001 political crisis was triggered by domestic policy differences. But this episode illustrates the legislative stalemate in the Kim Dae-Jung administration as the South Korean state was entangled increasingly in complex foreign and domestic policy issues unleashed by the forces of globalization in the world economy and the fallout from its policy toward the North. When the shaky coalition with the ULD finally ruptured in September 2001, Kim's political leverage with his sunshine policy came to an abrupt ending within and outside the

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legislative body. Economic reform and engagement policies put into effect simultaneously had mixed results of both success and failure.

Mixed Results I: The Economic Reform During his inaugural address in 1998, Kim Dae-Jung characterized his administration as a "government of the people." Kim's logic was simple: his victory was realized by the power of the people, thereby accentuating the idea of democracy. Pledging himself to "overcoming national crisis and taking a new leap forward," Kim promised to promote simultaneously "democracy and a market economy." His administration would address the pending economic crisis and help Korea to advance "from industrial societies ... into knowledge and information societies where intangible knowledge and information will be the driving power for economic development" (D. J. Kim, 1998c). The primary task of the Kim Dae-Jung administration, therefore, was to overcome the economic adversity following the 1997-1998 Asian financial crisis. The next task was to reform the economy, which was placed under IMP-imposed restrictions, by implementing financial and banking reforms as well as corporate governance and labor market reforms. The central focus of Kim Dae-Jung's domestic policy, highlighting a parallel development of democracy and a market economy, was often called "DJnomics" or "mass participatory economy." One way of judging the level of success of DJnomics is to examine the performance record of the Kim administration on economic recovery and restructuring. Marking the first day of his fourth year in office, President Kim Dae-Jung publicly stated that "half of his efforts have been successful." Emphasizing "his regret over the government's inability to resolve the problem of corruption and indicating that he would focus on this during the remainder of his term," Kim took pride in his ability to cope with the foreign exchange crisis, creating a framework for four major reforms and further developing an information-oriented society for Korea. He also added to the list his role in initiating the end of the Cold War on the Korean Peninsula with the historic North-South Korean summit in June 2000 (Choson Ilbo, February 26, 2001). The verdict on the Kim presidency is that he was successful up to a point in attaining the structural reform of the economy and realizing the vision of a welfare state, but that he did not fully realize his stated objectives on government reform. The Kim administration also had a record of mixed results in the areas of foreign relations and inter-Korean relations, including his engagement of North Korea under the so-called sunshine policy, to which we turn next.

Mixed Results II: The Engagement Policy Toward the North Kim Dae-Jung's sunshine policy toward the North was controversial from the very beginning. This policy initiative suffered a fatal blow, at least in the minds of his

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many critics, because of the "cash-for-summit scandal" as it came to be known in Korean media circles. Before he stepped down as president, Kim Dae-Jung admitted that he was aware of an illegal payment by the Hyundai business group to the North in the amount of an estimated $500 million. Hyundai claimed that its payment was part of a business deal that included tourism, a railways link, and proposed construction of an industrial park. Because the money was borrowed from an ROK state-run bank, the opposition lawmakers charged that this transaction payment was tantamount to bribery in return for the summit talks between the two Korean leaders in June 2000. One of Kim's campaign pledges in 1997, and his stated reform agenda during the transition, was to root out political corruption by severing close ties between big business and the government, popularly known as Jungkyung yuchak during the authoritarian phase of Korean politics. Clearly, this scandal was a fatal blow to the "Mr. Clean Politician" image that had been projected by the reformist candidate Kim Dae-Jung during his numerous presidential campaigns in the preceding years. In his apology, Kim Dae-Jung said, "I take responsibility for this situation" and added that "I earnestly hope that our people will understand my innermost feelings about the thing I did, out of my desire to promote peace and our national interest" (MacKinnon, 2003). In the court of law, however, not motives but actions are judged and Kim's critics and future historians will more than likely judge him harshly. Although Roh Moo-Hyun campaigned on a platform of continuing Kim's engagement policy, the new government's initiative on inter-Korean relations is bound to be kept on hold until current parliamentary investigations are resolved. History's verdict on Kim's sunshine policy will also depend on the outcome of this inquiry and investigation. In the end, Roh may be compelled to seek a political settlement through interparty negotiation and agreement between his government and the opposition-dominant National Assembly. In answer to a reporter's question, "Will you continue the 'Sunshine policy'?" President-elect Roh answered, "I don't think there is a particular reason for my policy to be different from the former President's policy. I will try to improve the methodology by consulting with the opposition party and winning more approval of the people and increasing transparency of the process." Roh added, however, that he will term his approach the "Peace and Prosperity Policy" ("I Will Do My Best to Remove the Differences," 2003).

Assessing Kim's Overall Accomplishments The irony is that the Kim Dae-J ung presidency achieved much by the standards of most Korean presidencies since 1987. By bringing the South Korean economy out of the 1997-1998 Asian financial crisis in three and a half years, ahead of the target of four years as set, Kim laid the foundation for a more transparent, competitive Korean economy and the better than expected economic growth that the country has enjoyed in the post-IMF years.

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During Kim's presidency, South Korea became more democratic as a society, wired through the Internet, and developed a knowledge-intensive infrastructure. Kim's administration enabled the promotion of a freer, more open and globalized society, as witnessed by the cohosting with Japan of the 2002 World Cup and the Pusan Asia Games. The media coverage of these sports events also showed Korea's younger generation of sports fans exuberant, while remaining "cool." This positive image of Kim's accomplishments was compromised by scandals associated with bribery and corruption. The conviction of his two sons and close aides on bribery charges, and the new payoff scandal over the inter-Korean summit, are the telling examples of why Kim Dae-Jung's legacy will remain tainted. 13 Despite his repeated apologies and appeals for public understanding, the full truth should be known through an ongoing investigation by a National Assembly special panel. The rule of law and transparency, rather than the rule of man and expediency, should prevail in the end. This would complete the process of consolidation of South Korea's fledging democracy. 14 President Kim Dae-Jung's overall accomplishment in public service was compromised by his personal misfortune associated with the bribery and corruption charges involving his family members. His youngest son, Hong-go!, was arrested and held without bail, on May 18, after three days of interrogation about his role in a bribery and influence-peddling scandal that had shaken his father's government on the eve of Seoul hosting the 2002 World Cup (Kirk, 2002a: A-12). 15 A close tie in government-business relations has existed in South Korea, which is the source of political corruption and is often dubbed "crony capitalism" (D. Kang, 2002). The Kim Dae-Jung administration violated its own declared policy of economic structural reform in its dealings with North Korea. In September 2003, five government officials and one Hyundai Asan executive were convicted on corruption charges stemming from the above-mentioned summit payment scandal on the eve of the June 2000 inter-Korean summit. Hyundai Asan chairman Chung Mong-hun, who was under indictment for illegally channeling money to the North, had taken his own life in August 2003. 16 Koreans tend to be harsh on their incumbent presidents when their terms near an end. But Kim Dae-Jung's loss of popularity and support in his final year was largely his own making. Kim had himselfto blame. "Even his supporters say Kim was better as an opposition leader than as a President" (Macintyre, 2002). Kim's habit of relying on a small clique of family and friends and a self-assurance bordering on arrogance helped him survive as a dissident. As president, that trait proved to be a liability. Kim ran an imperial presidency. While he fought for democracy, Kim never fully understood that the rules of democracy involving transparency and accountability also applied to him. At the time of completing his five-year term in office, Kim Dae-Jung was described as becoming "a lonely, almost tragic figure, deeply unpopular, politically spent and increasingly irrelevant." Kim Dae-Jung's term, "which began so full of promise, ended sadly, with an old man unwanted by his people" (Macintyre, 2002).

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Launching the Rob Moo-Hyun Presidency: Problems and Prospects South Korea's Sixth Republic must learn how to harmonize and reconcile the competing demands of a market economy and a political democracy. This will require building appropriate institutions for collective legitimization and also the formulation of an identity for the Korean people that is suited to the new information age. To survive as a viable democracy, South Korea must continue to build a vibrant civil and political society and a human resource economy, while becoming a regional hub in Northeast Asia in the twenty-first century. In 2002, South Korea proved to the world that it could successfully cohost the World Cup soccer finals and the Pusan Asian Games. At the same time, the political society proved to be capable and competent not only in exercising the sovereign and democratic rights of the people, but also in promoting the art of self-government. A fair and democratic presidential election was conducted in an orderly and peaceful manner to choose the new political leaders, who have a mandate to form a new, representative government.

The Sixteenth Presidential Election: Analysis of the Results On December 19, 2002, South Korea's 35 million eligible voters went to the polls to elect a new ROK president. Roh Moo-Hyun of the progovernment MDP received 49.1 percent of the vote, while Lee Hoi-chang of the opposition GNP received 46.8 percent and Kwon Young-ghil of the DLP received 4.1 percent. There were three other minor candidates, whose voting support was negligible. Six candidates were running in the election, but legal restrictions prevented parties from playing a part in the national debate unless they had clinched at least 5 percent of votes in the last major election, which in this case was the June 2002 local elections. Besides Lee's GNP and Roh's MDP, only Kwon's DLP qualified, by earning 8.1 percent of the votes in the June 2002 local elections. The voter turnout was 70.2 percent, the lowest registered in Korea's recent presidential elections (80.7 percent in 1997 and 81.7 percent in 1992). President-elect Roh began his single five-year term in office following his inauguration on February 25, 2003. This sixteenth presidential election was the first in the new millennium and the fourth such election to be held since 1987. In 1988, Korea's Sixth Republic was launched, following extended political turmoil and struggles for democracy in the preceding years. The official election campaign period was fixed by law to last only for three weeks. In the 2002 campaign, mass media and the Internet/Web sites were the primary political outlets, which made mass outdoor rallies obsolete. For instance, the issues aired by the three rounds of presidential television debates contributed to the voter awareness of the presidential candidates and made possible a less costly media-based campaign. The issue of "peace leading stability" helped sway the uncommitted votes (estimated to be 20 to 25 percent of the total) to give support to Roh, the liberal and reformist candidate, over Lee, the conservative and majority party leader in parliament, and Kwon, the progressive labor union candidate.

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According to media reports, each presidential candidate held less than five outdoor rallies to mobilize their party members or supporters during the campaign period from November 27 to December 18, 2002. This figure is dramatically smaller than the forty-nine rallies held by candidates during the 1997 presidential election. The Internet played an important role in the 2002 election, although illegal cyber activities were also reported. By allowing voters greater access to information, the Internet made people less susceptible to preelection rumors and allegations (negative campaigning) than they had been in the past. The campaign agenda was affected by North Korea's posing a security threat by announcing the end of the nuclear moratorium and by the rising anti-American sentiment caused by the deaths of two teenage school girls who were accidentally run over by a U.S. military vehicle. The subsequent acquittal of the two American soldiers involved, by aU .S. military court, led to street demonstrations demanding a renegotiation of the Status of Force Agreement. These issues helped to dramatize the causes for sustaining peace through dialogue with the North and ascertaining stability through continuity rather than changing the political regime. The incumbent President Kim Dae-Jung was the founder of the ruling MDP, but he decided to step down as its head in June 2002. The constitution prohibited Kim from succeeding himself as president. Roh became the standard bearer of the MDP, but he also tried to distance himself from Kim Dae-Jung. With the MDP's Roh winning the election, the old politics of the three Kims era came to an end in Korean politics. A scenario for fielding a single unified presidential candidate was negotiated by the MDP candidate, Roh, and the National Alliance 21leader, Chung Mong-joon. This plan was perceived by the public as an ingenious device to defeat the front-runner GNP candidate Lee Hoi-chang. These two candidates agreed that whoever lost the televised debate between them would drop out of contention. This strategy worked to Roh's advantage, despite Chung's withdrawal of support for Roh only hours before the end of the official campaign. Chung's last-minute disavowal of the two-way alliance, intended to erase a slight lead pollsters said the MDP candidate Roh had held, did not help the GNP's Lee to win the election. Chung dropped out of the presidential election after being defeated by Roh in a competition to nominate a unified candidate between the MDP and the National Alliance 21 that he led. Chung, a millionaire and a former vice president ofFIFA, is an independent lawmaker who threw his weight behind Roh to help him win the election. Roh received the full support of the Cholla provinces and split the vote evenly with Lee in the Chungchong provinces and the Kyonggi and Seoul areas. Roh had substantial support from younger voters aged twenty to forty. Lee maintained a solid lead in the Kyongsang provinces and in Kangwon Province, and pulled half of the votes of the Chungchong provinces, with strong support from voters in their forties and fifties. Roh received more than 90 percent of voter support in the Cholla provinces, while managing only 27.1 percent and 21.7 percent of support, respectively, in South Kyongsang and North Kyongsang provinces, whereas Lee received about 70 percent of support in the Kyongsang provinces (J. Kim, 2002).

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According to a Korea Gallup survey of 1,636 people on election day, 60.6 percent of those in their twenties and 60.5 percent in their thirties said they voted for Roh, while Lee received only 28.5 percent and 33.5 percent, respectively. In contrast, only 43.9 percent in their forties and 28.4 percent in their fifties said they voted for Roh, as opposed to 46.6 percent and 63 percent, respectively, who voted for Lee. 17 Despite this divided pattern of voting and voter preferences, the 2002 election was swayed relatively less by regionalism and more by the generational gap in Korean politics, as compared to the preceding presidential elections. Roh's major campaign pledge to relocate the administrative capital away from Seoul to Chungchong Province, however, seems to have made a difference in terms of Roh gaining increased support from Chungchong residents. With these issue-based electoral campaigns, Korean democracy has come a long way toward becoming mature and stable as a political institution.

Issues for the New Roh Moo-Hyun Presidency During his presidential campaigns and in the transition period before his inauguration, Roh Moo-Hyun took the following stances on the major policy issues: 1. Corruption and Political Reform. Roh distanced himself from the scandals that visited President Kim Dae-Jung's family and aides. Roh promised to disclose his own assets and those of his family members, thereby following the precedent of former president Kim Young-Sam. 2. Relocating the Capital from Seoul. Roh vowed to relocate Korea's political and administrative center to Taejon in the center of the country. The purpose was to relieve congestion and curb skyrocketing housing prices in the capital city and to stimulate regional economic growth and political autonomy. Roh campaigned on transcending regional favoritism and bias once and for all in favor of promoting regional balance and harmony. 3. Economy. Roh made it clear that his administration would continue the outgoing government's growth-oriented economic policies, be tough on the family-run conglomerates dominating the Korean economy, reduce the chaebol's dominance of the economy, and check on government-business collusion. 4. Economic and Social Reform. Roh said that he would implement a fiveday work week and improve benefits for the working class. This would include foreign guest workers, as well. He vowed to try to hold back increases in consumer and property prices. 5. North Korea's Nuclear Standoff Roh vowed to continue his predecessor's sunshine policy of engagement with and aid to the North. He said that North Korea should be persuaded to abandon its nuclear weapons program through dialogue. He ruled out the use of force in settling the nuclear dispute, saying Seoul wants neither war nor the collapse of the North Korean regime. He also said he opposed cutting off aid or imposing sane-

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tions, since these would lead to diplomatic isolation of the North Korean state. He advocated U.S.-DPRK dialogue as a way of settling the outstanding issues. 6. U.S.-ROK Alliance. Roh said "the 50-year-old alliance should be modernized to put Seoul on a more equal footing with Washington, reflecting South Korea's economic and political development." He pledged to work closely with Washington to resolve the crisis over the North's nuclear ambitions, but also said he sought a more prominent role for Seoul in dealing with security issues posed by Pyongyang. Roh said the United States remains a key ally whose military presence continues to strengthen the security of South Korea and its neighbors. His administration plans to give Washington suggested amendments to the Status of Force Agreement, a military pact that governs the status of the 38,000 U.S. troops in South Korea ("Where S. Korea's New President Stands," 2003).

Challenges Facing the New Presidency As a way of implementing some of these campaign pledges, the Roh administration took the initial step of issuing executive directives and assenting to appropriate legislative acts. In the light of the preceding public stance on policy issues upheld during his campaigns, it was no surprise that President Roh decided not to "veto" a legislative bill on authorizing a special prosecutor to investigate accusations of payoffs, known as the "cash-for-summit" scandal. This bill was passed by the National Assembly at the time ofRoh's inauguration despite the objection by the ruling MDP in parliament. The opposition GNP took this measure while approving Roh's prime minister designate, so that the new president could move expeditiously to announce the makeup of his cabinet at the earliest time possible, following his inauguration. What is noteworthy, as a good political omen, is the apparent executive-legislative cooperation. This particular measure of coordination was made possible despite the strong opposition of a faction within Roh's own ruling MDP. There was a strong attack by the North Korean media against the opposition GNP effort to pass the bill relating to the cash-for-summit scandal. They denounced the bill as an act of sabotage against North-South reconciliation. President Roh decided not to block the legislative mandate to investigate the scandal, so as to let the facts surrounding the scandal be known to the public. Some of the additional challenges facing the new presidency include: • How to reconcile the competing interests, partisan versus national, on the major controversial policy issues. His difficult choices relate to such policy areas as national security, inter-Korean exchanges, the economy, social welfare, and so on. • How to resuscitate the sagging economy.

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• How to resume inter-Korean economic exchanges, such as North-South railway links, now on hold. • How to realize the campaign pledges on a series of reform measures, such as on constitutional amendments to enhance the prime minister status and on ensuring legislative-executive cooperation. • How to reform the bureaucracy and to privatize state-owned enterprises. • How to improve the press-government relations and to undertake educational reforms. • How to repair the damaged alliance relations with the United States and also promote good neighborly relations with Japan, China, and Russia. • How to bring about "the vision of making Korea the regional hub in Northeast Asia," as he pledged during the campaign. Depending on how well the Roh administration will confront some of these and related challenges in the days ahead, the future course of the Roh presidency may be more focused on continuity than change in the ROK's democratic politics. The present and future scenario of South Korea's institution building seems to be more path-dependent than a radical change and shifting of the road maps. Some evidence of Rob's leadership style, as manifest in the personnel policy of cabinet appointments, for instance, gives assurance that more continuity than change in policies are in the offing. The appointment of Goh Kun as Rob's prime minister is a case in point. Goh is a veteran administrator who has served as a cabinet member in the administrations of former presidents Chun Doo-Hwan, Roh Tae-Woo, and Kim Young-Sam. He was a former prime minister under the Kim Young-Sam administration and served two terms as the mayor of Seoul, the first time appointed and the second elected. In his mayoral election, Goh was supported by Kim Dae-Jung's ruling party. As a long-time civil servant, Goh will bring his talent and experience to the new government, virtues that Roh seems to lack. Hence, Goh will work to balance the new presidency. President Rob's appointment of younger-aged cabinet members and bringing new talents to some ministries are also noteworthy. This may reflect Rob's desire to balance his cabinet with both old and new personnel. The appointment of Kang Kum-sil, a forty-six-year-old female and former judge, as justice minister, is a case in point. This may represent a clear sign of Rob's determination to reform the government bureaucracy, where the strict seniority rule has prevailed. In fact, immediately after her appointment, many veteran judges and prosecutors expressed their uneasiness, because some senior judges were bypassed in the process of Rob's appointment of a relatively younger and less-known civil rights lawyer coming from outside the ministry. The portfolio of the minister of culture was given to Lee Chang-dong, a film director and an outside critic of the ways in which the government ministry runs the fields of media and communication. Lee points to bureaucratic culture in Korean

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society as the main culprit responsible for the Taegu subway tragedy, by insisting that "[n]o one takes responsibility or makes decisions and officials hide behind prudence." Under his leadership, new media guidelines were announced to replace the existing practice of government and media relations ("Roh Sets New Media Relations;' 2003). Roh vowed to deal sternly with inaccurate news reports and to correct inappropriate practices within the industry. He declared to "wage a war against misreporting" by making the pressroom in the Blue House open and available to all news organizations through scheduled briefings and the rule of transparency. The new guidelines will now mean tightened regulations on newspaper reporters wanting to meet ministry officials. Reporters must use their own name if the sources are quoted in news stories. Roh has retained several veterans in his cabinet (like Unification Minister Jung Se-hyun) and brought new faces (like Foreign Minister Yoon Young-kwan) into the government. His national security advisor (Ra Jong-yil) and foreign policy advisor (Ban Ki-mun) teams are staffed by able and experienced aides. Roh appointed another human rights lawyer as head of the National Intelligence Service. The new spy agency director, Ko Young-koo, is a judge-turned-lawyer and a founding chairman of Minbyun, the Lawyers for a Democratic Society, to which Roh himself belonged as a civil rights lawyer in the past. The challenges facing Roh Moo-Hyun's presidency in the next five years are many, but the following three main points seem to stand out: to lead the country so as to overcome North Korea's nuclear brinkmanship, to continue the path of democratic reform and institution building, and to carve an appropriate place and role for South Korea in the globalized world economy. 18 The first challenge for the Roh presidency is "how not to succumb to North Korea's blackmail and brinkmanship strategy." This will mean that Seoul cannot afford to yield to North Korea's undue pressure and self-righteous stance on inter-Korean relations and the reunification issue. Hopefully, a three-year surplus rice delivery to the North without charge recently announced by the Roh administration will not amount to a free handout but will be better managed and coordinated as a constructive and comprehensive policy package for improving inter-Korean relations. In answer to a reporter's question, "What must be done to ensure that we will not have a nuclear-armed North Korea tomorrow?" President-elect Roh Moo-Hyun replied, "I believe North Korea understands that you cannot have nuclear weapons and opening up and economic prosperity at the same time. And I also believe that North Korea is aware that it must renounce its nuclear weapons in order to get a guarantee for international security and economic assistance" ("I Will Do My Best to Remove the Differences," 2003). The second challenge for the Roh presidency is "how to bring about democracy through consolidation and institution building in South Korea." What should be the proper role of the political parties and the civil-society groups, for instance, in

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promoting active and meaningful citizenry participation in the political process? Democratic consolidation through institutional reform must continue, without fail, during the term of the Roh presidency. Roh is on record to favor replacing the current single-seat constituency system with a multiple-seat system. This will curb, as Roh sees it, regional rivalry, and strip the presidential position of what he deems to be an "enormous" amount of power. He also stated that he would allow the majority party, following the next parliamentary elections, the right to form a cabinet. Roh also favors a primary race to nominate candidates for nationally elected posts. The third challenge facing the Roh presidency is "What should be an appropriate international role for South Korea?" What kinds of blueprints and grand strategies should South Korea adopt in the twenty-first century? The Ministry of Maritime Affairs and Fisheries, for which Roh Moo-Hyun once served as minister in the Kim Dae-Jung administration, has announced a plan of constructing new facilities in the Pusan Harbor and Kwangyang Port. Roh must go beyond repairing an existing infrastructure and suggest new visions and a comprehensive and concrete program for how to make Korea the logistics hub of Northeast Asia, which was one of his presidential campaign promises to the Korean people. Roh 's Handicap Politics?

The first year of the new democracy under the Roh Moo-Hyun presidency was judged to be not as successful or smooth as those of his predecessors, Kim YoungSam or Kim Dae-Jung. Roh, who had won a December 2002 presidential election as the Millennium Democratic Party (MDP) candidate, announced that he would quit the party and join a party newly formed by a dissident group of lawmakers from the MDP The break-up of the ruling party, on September 20, followed months of feuding between lawmakers loyal to Roh and others loyal to the party's founder, former president Kim Dae-Jung. Roh's new party (called the United New Party for Participatory Citizens) controls only 47 seats in the 273-seat National Assembly as of December 1, 2003, compared with 149 belonging to the main opposition Grand National Party, 60 of the MDP, and 17 of the remaining independents, including former United Liberal Democrats. Roh's presidency does not depend on parliament, but his ability to rule can be hampered by parliamentary delays. Unexpectedly, a crisis of confidence erupted when Roh Moo-Hyun called for a national referendum around December 15 to see if he should continue to rule or step down. "I reached a situation in which I cannot conduct the presidency," Roh said in a televised speech ("Roh: No Confidence in Doing My Job," 2003). "It is more important to establish a political culture of taking responsibility and lead national politics in the right direction than to complete my five-year term," Roh stated (Larkin and Macintyre, 2003). The confidence vote never materialized, however, because his critics interpreted

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this bombshell proposal as a calculated ploy to elicit voters' sympathy away from scandals involving his close aides and a hostile parliament. 19 Roh's long-time aide for twenty-years was arrested and accused of receiving $956,000 in bribes from SK Group, a scandal-plagued South Korean conglomerate. Two of his close aides were also subject to government investigation. The necessary legislation to enable the referendum was not enacted by the opposition-dominant parliament. This body instead voted to appoint an independent investigator to oversee a corruption investigation focusing on Roh's former top aides. As President Roh vetoed this bill, saying that it was premature to appoint an independent counsel given a probe currently under way, a legislative boycott by the opposition GNP had paralyzed the National Assembly for eight days. Roh's veto of the slush fund probe was overruled by the Assembly on December 4, in an overwhelming vote. Of 266 lawmakers who voted, 209 endorsed the motion to overturn Roh's veto, while 54 voted against. One abstained and two were declared invalid. The law requires a two-thirds majority to override any presidential veto and Roh could not again veto the bill. This was the first time in 49 years that the National Assembly rejected a presidential veto, and this move set the stage for a further showdown over the legislative impasse between the two branches of the government. 20 The president's office expressed its "regret" but indicated that the government would respect the assembly's decision ("ROK Parliament Overrides President's Veto of Slush Fund Probe," 2003). In office for only eight months, Roh's approval ratings plummeted to 25.6 percent from 80 percent right after he took office. The Roh administration was open to attacks by the press and the opposition over economic recession, financial scan" dais involving his close aides, and mishandling of the North Korean nuclear issue and relations with the United States. On December 17,2003, Seoul's defense minister announced that South Korea would send 3,000 troops to Iraq in early 2004, in addition to the 675 medical and engineering personnel already dispatched in 2003. Conclusion

Robert D. Putnam (1993) raises the question: Why do some democratic governments succeed and others fail? To answer this question, Putnam provides an analytical framework for studying institutional performance of regional governments in modern Italy. He traces the roots of the civic community and the presence of social capital as the key to the success of institutional performance in each of Italy's regional governments. Democracy and development, Putnam argues, require building active civic communities. Building social capital will not be easy, but it is the key to making democracy work (1993: 181-185). Our study has shown that institutional performance by each of the Sixth Republic administrations likewise necessitated the civil-society group and its active participation in the political process of Korea's new democracy. Their role as a watchdog for the electoral campaign, for instance, and for the institutional perfor-

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mance by the newly elected government, was essential for democracy and development to make headway in Korea's new democracy. The success of institutional performance by Korea's new democracy will depend on civil-society activism based on promoting the norms of reciprocity and networks of civil engagement. Institutions are "games in extensive form," in which actors' behaviors are structured by the rules of the game. The Rob administration is expected to follow the constitutional rules and electoral procedures in attaining its policy goals. In so doing, it must follow institutional rules and routines of democratic governance as established by the Sixth Republic constitution. Rob's institutional performance and policy implementation are likely to be affected more by continuities than by changes in government and politics. The rules and standard operating procedures that make up institutions will leave their imprint on political outcomes by structuring political behavior. Likewise, these institutions will shape the actors' identities, power, and strategies. In the absence of mutual trust and credible sanctions against defection, cooperation is difficult to come by in politics. The performance of all social institutions, including the government institution, depends on how the dilemma of collective action is addressed and resolved. In all situations, all parties would be better off if they could cooperate. Yet, in the absence of a credible mutual commitment, each party has an individual incentive to defect and become a "free rider." Success in overcoming this dilemma depends on the broader social context within which any particular game is played and a substantial stock of social capital. Social capital here refers to features of social organization, such as trust, norms, and networks, that can improve the efficiency of society by facilitating coordinated actions (Putnam, 1993: 167). Spontaneous cooperation, for instance, is facilitated by social capital. Nurturing Korea's social capital and civil-society virtues, such as a norm of reciprocity and networks of civic engagement, are the necessary conditions for making Korea's new democracy work and succeed. All societies, including Korea's traditional and modem elements, are characterized by networks of interpersonal exchange and communication, both formal and informal. Most of these networks, like Korea's old politics, were primarily "vertical," linking unequal agents in asymmetric relations of hierarchy and dependence. Others are primarily "horizontal," bringing together agents of equivalent status and power. In the real world, almost all networks are mixes of the vertical and the horizontal. Korea's new democracy under the Rob Moo-Hyun administration must strive toward promoting the new networks of civil engagement and norms of reciprocity appropriate for the age of Korea's new society and politics. Networks of civic engagement, like the neighborhood associations, represent intense horizontal interaction. Networks of civil engagement are, therefore, an essential form of social capital. The denser such networks in a community, the more likely that its citizens will be able to cooperate for mutual benefit (Putnam, 1993: 173). There are four primary reasons why this is the case. Networks of civil engagement increase the potential costs of a defector in any individual transaction;

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foster robust norms of reciprocity; facilitate communication and improve the flow of information about the trustworthiness of individuals; and embody past success at collaboration, which can serve as a culturally defined template for future collaboration (North, 1990a: 37; Putnam, 1993: 173-174; Swidler, 1986: 284).2 1 Institutions are also shaped by history. Major historical turning points, such as Korea's liberation from imperial Japan by Allied powers in World War II (1945) and the untold tragedy of the Korean War (1950-1953), can have extremely longlived consequences. Institutions have the feature of "path dependence"-as the "new institutionalists" have dubbed it-meaning, where you can get to depends on where you are coming from, and some destinations you simply cannot get to from here (Putnam, 199: 179). The implication of this statement is profound in two ways for both political and economic developments of Korea's new democracy under the Roh Moo-Hyun administration. The first implication is that the process by which the Roh administration has arrived at today's institution of Korea's new democracy is not only relevant, but will also be constrained by future choices. The second implication, more in line with the notion of "ideas matter in Korean politics," is that not only does "history matter," but also that persistent "good or poor" institutional performance by the preceding administrations of Korea's Sixth Republic will make a profound and lasting difference for the current and future trajectories of Korean society and politics.

9 Transforming Korean Politics? Conclusion

Every society faces not merely a succession of probable futures, but an array of possible futures, and a conflict over preferable futures . ... The management of change is the effort to convert certain possibles into probables, in pursuit of agreed-on preferables. 1

Alvin Toffler, 1970 Woodrow Wilson took America into the twentieth century with a challenge "to make the world safe for democracy." As we enter the twenty-first century our task is "to make democracy safe for the world." 2

Fareed Zakaria, 2003 A modem state will continue to strive, in the new millennium, toward attaining both a resilient economy and a broad-based governmental system that reflects the popular will of the majority of its citizens. What actions will contribute to, or distract from, the overall progress toward achieving these goals? The interweaving of the forces of such leading ideas as modernization and globalization will be played out in South Korea as in other emerging democracies. These ideas have often been the source, and key determinants, of government policy on socioeconomic development and, as such, they have played an important role in the transformation of the political and economic life of modernizing societies. The present study began by ascertaining how "ideas matter" in Korean politics. The South Korean state and society came to be influenced by the interplay of the three key ideas of modernization, democratization, and globalization. South Korea as a new democracy has also been affected by the interaction between each of these ideas and the traditional cultural norms and values of Korea as a post-Confucian society. This became evident in the analysis of the relative performance of each successive Sixth Republic administration in promoting economic prosperity and political democracy. Ideas are held as a set of beliefs by individuals who participate in the political process of a society as either policy makers or as ordinary citizens. The present 308

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Table 9.1

Idea Types and Pathways Idea types: Pathway determinants Road maps Coordination in the absence of unique equilibria Institutional change and reform

Worldviews Modernization

Principled Beliefs

Causal Beliefs

Democratization

Globalization

Source: Adapted, with modification, from Goldstein and Keohane, 1993: 3, 24.

study has shown that ideas have often been important sources and determinants of government policy in South Korea and that the specific set of ideas (like modernization, democratization, and globalization) have come to influence public policies pursued by the government since-and even before-the democratic opening of 1987. The idea types, and their pathways, of the three principal beliefs held by government leaders in Korea's Sixth Republic are presented in Table 9.1. Modernization was not only reflected a set of "world views" different from traditional values and beliefs, but also provided "road maps" and pathways for the Korean state to traverse. Democratization represented a set of "principled beliefs" that inspired government leaders and civil-society groups to direct their attention toward coordination in the absence of unique equilibria in society. Changes in principled ideas of democratization helped bring about the Fifth Republic's authoritarian withdrawal from politics in the 1980s and to usher in an era of new politics of democratic transition and consolidation. Globalization has also emerged as a set of ideas that affected changes in "causal beliefs" in the elite thinking on economic policy since the mid-1990s. Globalization, together with democratization, has led to competitive pressures for structural reform and new institutional designs for Korea's political economy. "Ideas matter in Korean politics" because each of these ideas, as shown in the preceding analyses, has come to exert significant influence in the making and shaping of public policies in the Korean state. Still, the question remains as to how and why? First, ideas like modernization served as "road maps" to influence government policies in an uncertain environment for modem Korea. Second, ideas like democratization provided "principled beliefs" in the "absence of unique equilibria" during a time of rapid socioeconomic changes. Finally, ideas like globalization have provided "causal beliefs" for rapid economic change that, in turn, have led to needed institutional change and reform of the Korean state.

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Ideas will become transformative if and when they act as catalysts for largescale socioeconomic and political change in society, as has happened to Korean society in recent generations. As these ideas become provocative, they may entice leaders and elites to seek drastic change in their institutions. These ideas, in turn, will work to inculcate a new set of mass beliefs and attitudes. Some of these ideas may also become proactive by providing an alternative scenario for the public. In the Korean context, some of these ideas have helped the younger generation envision an alternative future for Korea, like the reunification of North and South Korea and Korea's rightful place in the region of Northeast Asia. Since the last decades of the twentieth century, South Korea has confronted the challenges of building a modern nation-state with a durable political democracy at home. South Korea became the focus of the new experiment in building free market democracy through democratization and globalization. Its political leadership has pursued a dual strategy of democracy-building and creating a capitalist market economy in the belief that such a policy will bring both power and prosperity to the nation. Whether and how successfully society and politics have become transformed in the process since its democratic opening, however, is not self-evident but must be subject to empirical proof and validation. This is important to ascertain because of its broad implications for democratic theory. 3 Korean society has obviously undergone drastic changes in recent decades. This does not necessarily mean that Korean politics has also become transformed, because such a transformation depends on the durability of democratic institutions. One cannot say, for instance, that Korean politics has been transformed unless and until everyday political actions and practices in Korea's Sixth Republic have become stable and regular over time and society has come to respect the rule of law and the norms of democracy. Chapter 8 gave ample evidence of how Korea's democratic institutions enabled a peaceful and orderly political transition in 2002-2003, as well as enlivening civil-society activism and improving executive-legislative relations. South Korea has had a democratic form of government ever since 1948, when the Republic of Korea (ROK) was proclaimed and a democratic constitution was adopted on July 17. Prior to 1988, however, South Korea experienced only a "nominal" and formal democracy because the norms of the constitutional democracy were often violated willfully by practicing politicians. For instance, the rule of the military elite was instituted by invoking democracy, but the leaders actually practiced authoritarian politics and governance. It was only after 1988 that new leadership emerged to make Korean politics genuinely democratic by upholding the rule of law and introducing reform agenda. The preceding chapters have disclosed some of the empirical facts and evidence to substantiate and test the hypotheses regarding democratic institution-building in the Korean context. South Korea's Sixth Republic administration of President Roh Moo-Hyun has instituted public policies and programs of socioeconomic modernization and re-

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forms, while attempting to overcome the economic pressures generated by globalization in the world economy. Since 1988, Korea's Sixth Republic administrations have pursued the dual strategies, as a whole, of both capitalist development of the economy and expanded liberal democracy in politics. The experiment of the system change and transformation of Korea's new democracy will be addressed with a view to drawing some broad historical and comparative politics lessons. In this concluding chapter, the question of whether and how Korean politics has transformed itself while adopting the three principal ideas will be examined in three steps: first, drawing lessons from the Korean experiment in democratization; second, showing how Korean culture fits into the "Asian values" debates and discourse; third, noting how South Korea confronts the new security threat, posed by the North Korean nuclear weapons program and brinkmanship, while continuing its alliance relationship with the United States.

Drawing Lessons from the Korean Experiment In drawing lessons from the Korean experience, we tum first to the historical and comparative cases of the Korean struggle for modernization and democracy. Second, we tum to the comparative politics of democratization by exploring the social and political science lessons to be gained from the Korean experience.

The Multiple Paths and Path Dependency There are multiple paths to modernity, as Barrington Moore Jr.'s (1966) study demonstrates, and the Korean path has been unique. In his seminal work on the origins of democracy and dictatorship, Moore differentiates between the Western experiences that involve west European bourgeois democracy, American pluralistic democracy, German fascism, and Russian communism on the one hand, and Japanese fascism, Chinese communism, and Indian democratic experience on the other. Thus, the South Korean experience in moving toward modernization and democratization should be addressed in terms of comparative lessons. In explaining the social change and transformation of South Korea and transforming Korean politics since 1987, it is important to know how capitalist development has led to democracy in the Korean context as noted throughout this book. In this connection, two separate historical episodes in modem South Korea may be highlighted with a view to identifying the extent to which these developments have shaped and impacted the historical trajectory of Korea's paths toward democracy and modernization. These are, first, the emergence of civil-society forces through the democracy movement in the pre- and post-1987 phases of democratization in South Korea and, second, the 1997-1998 Asian financial crisis and the subsequent response to the economic crisis by the South Korean state and society into the twenty-first century. 4 The rise and activation of Korea's civil society in the post-1987 era was pos-

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sible because it was preceded by the prodemocracy movements that had gone through several stages of trial and error in waging "antiauthoritarian campaigns" against the political regime and state. Three democratic junctures, according to S. Kim (2000), provided the peaks and valleys in the path toward Korean democracy undertaken by civil-society forces and organizations: the first in 1956-1961, the second in 1973-1980, and the third in 1984-1987. During this phase of Korea's democracy movement, the primary form of political action was protest and struggle, which resulted in a successful democratic transition through an authoritarian breakdown and the withdrawal of the repressive regime. Kim attributes the successful authoritarian breakdown to the role of civil society, primarily the "people's movement groups" that consisted of "the triple solidarity of student groups, labor unions, and religious organizations" and their prodemocracy coalition with the opposition party between 1984 and 1987. As compared to the two previous democratic junctures, from 1956 to 1961 and from 1973 to 1980, the third democratic juncture from 1984 to 1987 was far better structured and organized. It was effective and efficient because the prodemocracy coalition from 1984 to 1987 expanded in scope and power. In addition to the triple solidarity, the prodemocracy coalition this time included many middle-class citizens and was headed by influential national associations. These central· organizations tightly coordinated and effectively mobilized various sectoral and regional groups in their nationwide antiregime campaigns and protest demonstrations (S. Kim, 2000: 103). This suggests that Korea's civil-society movement was pathdependent, in that its political activism was revealed more dramatically in the post1987 phase of democratic consolidation. Without noting the protest phase of Korea's civil-society movement and the shift from the protest movements in the past into the advocacy movement today, the dynamism and complexity of today's civil-society activism, with its wide-ranging causes of advocacy from socioeconomic to political issues, cannot be properly understood. The 1997-1998 economic crisis prompted civil-society groups to switch their focus and emphasis to economic reforms. Various civil-society groups demanded, for instance, a thorough review of Korea's past experiences with industrialization and for the establishment of a more sustainable development strategy for the future. Many groups also called for a serious chaebol reform to restructure the economy and remove the deep-rooted state-business collusion. Civil-society activism became bifurcated initially into progressive forces and more moderate advocacy groups. With the participation of the middle-class organizations and the democratic regimes' divide-and-rule strategy, civil-society activism started to move away from radicalism toward conservatism. The collapse of the communist bloc and the end of the Cold War era also helped to moderate the militancy of the radical activism in Korea's civil society. Here, capitalist development has played a role in furthering the cause of democratic consolidation.

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Although the state-civil society relationship in Korea still remains partially conflictual, it is slowly changing and becoming more competitive. The state and civil society must remain separate and autonomous if liberal and pluralistic democracy is to have a future in Korean politics. One important issue for Korean democracy is how to prevent a possible incorporation of civil society by either the state itself or by political society. Civil society must remain independent from the state and also from political society so that it can continue with its unique contribution toward democracy. An analysis of the Korean responses to the 1997-1998 Asian financial crisis, as discussed in Chapters 5 and 6, highlights the multiple paths and path dependency of the Korean case as well as valuable historical lessons. The Korean response to economic crises and the structural reform undertaken under the International Monetary Fund (IMF) trusteeship of the Korean economy was unique. Yet, each economic crisis involves a sequence of events that are in some ways similar. In the prosperous years preceding the 1997-1998 crisis, for instance, a distinct policy approach and support coalition was developed. When the crisis came, opposition forces in political and civil societies challenged government policy and the ruling coalition. At the outset, the crisis opened a new system of relationships, making both politics and policy more fluid. As the crisis management team was placed intact and crisis and conflict neared the stage of resolution, however, a new political force and policy coalition was sought after. The system of capitalist development and activism in civil-society groups were going hand in hand, until the next crisis arose (Gourevitch, 1986: 21-22). In overcoming the 1997-1998 economic crisis, we can observe how relationships changed among various social actors such as big business, labor, the political parties, civil-society groups, the president, and the parliament in Korea. All political and social groups were not antiforeign, despite the adverse effect of the international capital market on the Korean economy. In a way, a historical compromise was attained among the relevant political actors in 1998. This compromise was made manifest, among others, in the tripartite formula for overcoming economic crisis and undertaking the structural reform of the Korean economy. Business groups drew together in opposition to labor, but they were chastised by the state through the civilian government of President Kim Dae-Jung in 1998. They were compelled to work side by side with organized labor to address the IMP-mandated reform package and policies. Likewise, the trade unions and organized labor were placed under new coercive pressure by the government and made to participate in the tripartite commission to address the labor reform issues. Tensions naturally grew between the partners in the historic compromise of 1998. Whatever the differences in partisan outcomes, the government of Korea's new democracy was pressed to strike historical bargains between business and

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labor in forging a compromise that would promote the collective interest of Korea's economy vis-a-vis foreign pressures and international competition. The central government played a mediating role, through which Korea's societal actors were forced to give and take. Whether the trajectories pursued by the Korean state between 1998 and 2000 can be repeated by future Korean governments under different circumstances is not clear. The situation will be unique and responses to crisis will be subject to uniquely varying conditions that prevail at the time of crisis. It is clear, however, that there is a path dependency guiding the future of the Korean economy. Yet, there are multiple paths that are open for the Korean leaders to choose from. Transnational power constellations also exerted their effects in positive and negative ways. Forces associated with geopolitics, war, and globalization each will have a role to play in determining Korea's fate and future, as individual chapters have noted. Despite the democratic peace notion that democracies rarely go to war against other democracies, the fact remains that democracies did fight wars against nondemocratic and authoritarian states in the past, as they did in the Korean War (1950-1953). The lesson remains important for the future dealings of South Korea's new democracy vis-a-vis neighbors both near and far (McCann and Strauss, 2001).

Comparative Politics of Democratization Once the socioeconomic foundations for building a modern nation-state had been laid, the Korean state took the form of a liberal democracy with a lively activated civil society. Korea's new democracy since 1988 has continued to experiment with the political institutions of an electoral democracy and a presidential form of government, with a mixture of successes and failures. Institutions like the family and liberal democracy are social structures and norms that have been "humanly devised" with constraints placed on human action, while organizations like firms and political parties are "groups of individuals bound by some common purpose to achieve objectives" (North, 1990a: 3, 5). In drawing comparative political lessons from the case of Korea's democratic experiment, it is useful to look at Korean politics as a "political marketplace" where exchange takes place among the political actors. It is then possible to see who the players are and how they are interrelated in pursuing their political objectives (Ramseyer and Rosenbluth, 1997). The political institutions of Korea's electoral and presidential democracy were established to enable interaction between the various political actors and collective action in political decision making and public choices for the society as a whole (Olson, 1971). The institutional perspective of a principal-agent model of political exchange makes sense, in that in a liberal democracy the voter is the principal, and the elected official, whether the president or a member of parliament, is the agent performing his or her task on behalf of the

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principal. In a democracy, political parties are agents of voters (the principal) but also act to claim political control over the elected officials of the executive and legislative branches of the government (D. Kang, 2001 ). In liberal democracies like Japan and South Korea, "agency slack" exists in principal-agent relationships (i.e., some gap between what the principal expects and what the agent delivers). How to devise an institution that will reduce "agency slack" and "transaction costs" in politics has emerged as an important policy issue for representative democracies (Ramseyer and Rosenbluth, 1997: 4). The role of leaders in politics is to provide for the public good whereas politics always involves exchanges between leaders and citizens for their mutual benefit. By definition, the public good cannot be provided by private actors "unless they are submitted to the appropriate institutional constraints, which implies the embodiment of some political structure" (Colomer, 2001: 1). The essential exchange is between leaders providing for the public good and citizens giving leaders their support or their votes. While the public good can satisfy some citizen groups' common interests, citizens' support for leaders is transformed into "opportunities for staying in power, obtaining private goods, acquiring fame, or developing a professional political career" (1). The case of Korea's democratic experiment confirms that institutions affect political outcomes with varying degrees of institutional effects on public policy. The choice of institutional structure matters because it affects political behavior and dynamics in Korea's new democracy. For instance, Korea's electoral systems with unsynchronized cycles for presidential and parliamentary elections have shaped the behavior of candidates, voters, and political parties. Korea's constitutional structure of a presidential rather than a parliamentary system has also affected regime stability, democratic accountability, responsiveness, and durability. This suggests that there is no single ideal form of democratic governance, because each choice of institutional design involves trade-offs (Haggard and McCubbins, 2001: 2). The political institutions of Korea's new democracy are based on the system of a presidential government with a built-in separation of powers principle. A separation of powers can be conceived as a situation where different components of government, like the executive, legislative, and judiciary branches, have the ability to exert influence through the exercise of a veto on public policy making. A separation of powers must create effective checks and balances, where each branch of government "should have a will of its own" with "the necessary constitutional and personal means to resist encroachment" (Madison, 1788). The fact that different parts of the government are motivated to seek different goals is called "a separation of purpose," and without this, the system of checks and balances established by the separation of powers can be "effectively disabled" (Haggard and McCubbins, 2001: 3). A separation of powers is, in fact, the defining feature of a presidential system. There are nearly as many ways to separate power and the purpose of the govern-

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ment as there are democracies, because separation of powers can also be found in parliamentary systems, bicameral legislatures, federal structures, and party systems that generate coalition governments (Haggard and McCubbins, 2001: 3; Tsebelis, 1995; Tsebelis and Money, 1997; Laver and Shepsle, 1996). The number of veto players in policy making is based not only on separation of powers, but also on political purposes that can be either unified or separated. For instance, if power is separated, but purpose is unified, there should be hardly any vetoes, since separate institutions are working toward a common goal, with jointly determined payoffs. This is what transpired three times in South Korea's Sixth Republic: first, during the latter phase of the Roh Tae-Woo administration (1990-1993), when the ruling Democratic Liberal Party (DLP) (via three parties merging) was the majority in parliament; second, during most of the Kim YoungSam administration (1993-1998), with the DLP first and the New Korea Party later commanding the majority in parliament; and third, during the first three years of the Kim Dae-Jung administration (1998-2001), with the ruling coalition ofthe National Congress for New Politics/United Liberal Democrats (ULD) first and the Millennium Democratic Party (MDP)/ULD later. By contrast, if the interests of the legislative and executive branches are divergent and their goals are independent (e.g., their electoral fates are independent of one another), then the effective number of vetoes may be near the maximum number of vetoes (Haggard and McCubbins, 2001: 3-4). The first two years of the Roh Tae-Woo administration (1988-1989) and the last two years of the Kim Dae-Jung administration (2001-2003) saw the political situation of divided government between the executive branch and the legislative branch because the ruling Democratic Justice Party and MDP, respectively, lost the parliamentary majority in the National Assembly. Thus, the question of whether institutions matter in democracy has not been settled conclusively, because the Korean experience has shown that the institutional design for a new democracy with its presidential regime type has had consequences for political stalemate and presidential gridlock in the case of democratization in Korea's Sixth Republic. Of the two models of democracy identified in the literature, the constitutional principle and practical politics of Korea's Sixth Republic belong to a majoritarian democracy rather than a consensus democracy tradition (Lijphart, 1984, 1999). Contrast is evident between the majoritarian and consensus (or proportional) models of democracy. Majoritarian democracies, to which South Korea belongs and the United Kingdom is prototypical, have electoral systems with only two major political parties or coalitions, single-party cabinets, unicameralism, and unitary and centralized government (Mainwaring, 2001). Consensus democracy, to which Japan belongs, as does Switzerland and Belgium, are characterized by most or all of the following attributes: proportional electoral systems with multimember districts, more than two major parties, coalition cabinets, bicameralism, and decentralized or federal political systems (Lijphart, 1984, 1999; Mainwaring, 2001). The majoritarian principle of democracy emphasizes that the government de-

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rives its power from majority rule and is based on a concentration of power. Majoritarian democracy can create sharp divisions between those who hold power and those who do not, and it does not allow the opposition much influence on government policy. The consensus principle, on the other hand, is based on the idea that democracy should represent as many citizens as possible and that a simple majority should not govern in an unfettered fashion. Consensus democracy also disperses power so that there are multiple poles of decision making and multiple checks and balances, thereby limiting the power of the central government while providing for the representation of a broader array of interests (Lijphart, 1984, 1999; Mainwaring, 2001). Between these two models, the leaders of Korea's Sixth Republic chose a majoritarian model of democracy and presidential form of government over a consensus model of democracy and cabinet form of government and proportional representational system. Although the opposition ULD leader Kim Jong-Pil is on record as favoring a cabinet form of government, both the ruling MDP and the opposition GNP are opposed to the constitutional amendment that is required to institute a cabinet form of government and a consensus model of democracy. In a democracy, the citizens as voters are the principal and their interests are articulated and aggregated by political parties. Political leaders who belong to political parties are, therefore, agents to represent the broad-based interests of the voters as the principal. Political parties and the party system in Korea have not been fully institutionalized in Korean politics and the weak party system continues to prevail in Korea's new democracy. Political parties in Korea have not functioned as an institution reflecting the aggregated interests of the citizenry, but rather as instruments of political leaders, furthering their individual and particularistic interests. Parties in Korea are top-down rather than bottom-up in organization and tend to serve elite interests and give only lip service to promoting public and general interests. Parties in Korea are not the creation of voters with similar goals but of politicians looking to perpetuate their power. It is not surprising, therefore, that a majority of the Korean voters have no party affiliation, although they tend to vote for a candidate with a party label. Political parties in Korea, however, choose and nominate their members as candidates for election to public office. Political parties as organizations have consequences for Korean politics. A party victory in an election can amount to that party's extracting rent from the state on behalf of the constituency in exchange for favored public policies. So long as South Korea remains a liberal democracy by electing its leaders in a majoritarian democracy, the elected officials, including the president and members of the National Assembly, as well as leaders of political parties, must act to reduce the "agency slack" in their principal-agent relationship. There is, however, some gap between what the principal expects and what the agent delivers in Korean society. The reality of Korean politics, according to one keen observer, is that these political leaders "will continue to hold more power and in-

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fluence society in a more direct way" than the voters "who are the putative principals in any democracy" and that "until a newer generation of political leaders arrives on the scene, Korean politics will be dominated by old methods" (D. Kang, 2001: 99). Most theories of democracy rest on the notion that voters elect representatives who reflect the broad contours of the voters' policy preferences and citizen input into policy making. Elections are instruments of democracy, therefore, only to the extent that they provide citizens with influence over policy making. According to the majoritarian model of democracy, citizens choose between two clearly identifiable competing parties or coalitions, and the winners will get more or less unencumbered power to rule. In contrast, a consensus model of democracy advocates that all citizens, not merely the majority who voted for the government, should have influence over policy. In this view, the interest of the majority would be checked rather than allowing citizens to influence policy by choosing between two clear-cut options. Majoritarian and consensus systems of democracy succeed in being responsive to voters' choices in different ways. In democracies with majoritarian constitutional designs, citizens are more able to choose between two competing government alternatives. In democracies with consensus constitutional designs, a larger share of voters exercise some influence over policy making. Presidential systems are more likely to lead to divided government than are parliamentary systems that involve majority coalitions (Powell, 2000: 57). This was so in Korea's Sixth Republic, which had a unicameral system in the National Assembly. In presidential systems where the legislature is bicameral, like the United States, divided government can be avoided if one of the legislative chambers is controlled by the presidential party. Korea's new democracy represents a variety of democratic institutional forms. Douglass C. North's theory of"equilibrium institutions" seems to apply directly to the Korean case. The choice and the survival of institutions [will] depend on their performance in providing public goods and reducing transaction costs, as well as on the path by which they are chosen, including the role of small event and luck in gaining adherence .... Once institutions [come to] exist, they set parameters for further action. But they can also reinforce themselves and make their replacement difficult through the effects of the incentives embodied in their structure. Even certain institutions producing inefficient outcomes can survive as a consequence of actors' learning by use, their adaptation to institutional regularities, and the costs of their replacement. (North, 1990a, as cited by Colomer, 2001: 4) It is hoped that Korea's new democracy will continue to learn from its experiments with institutional constraints on the existing system. Korea also needs to remain open-minded to improve and reform democratic institutions, overcome the old problems, and move ahead. Some of the topics that need to be addressed fur-

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ther include election with democracy or without democracy, "thinking about hybrid democracy" (Diamond, 2002), rediscovering culture, the role of ideas, Korea's institutional design for a two-party versus a multiparty system, personalism (boss) versus issue politics, elite versus mass-level politics, and a corporatist versus an individualist notion of liberal democracy. Also critical wiJI be a review of an enhanced role for local elites, opinion leaders, the mass media, and central-local levels of government. These and related issues are not specific to South Korean democracy. Most of East Asia's democratic governments, according to Hilton L. Root, face a large task of institution building based on decentralization driven by a technological revolution that boosts the ordinary citizen's access to information (2002: 117). Either growth with equity or radical disaffection will follow unless a culture of democracy is established. Root continues that checkmating corruption through watchdog agencies and an active civil society are needed to monitor the officials of the state (124). 5

Finally, it is self-evident that democracies are not ail the same. Institutional variations, such as systems of representation, division of powers, legal doctrines, and citizenship rights and protection, do matter. South Korean democracy is suigeneric, and its democratic experiments can illustrate the broader question of "What Makes Democracies Endure?" (Prezeworski et al., 1996). Are the six institutional factors, as identified by Prezeworski's study team, present in South Korea under the Roh Moo-Hyun administration? 6 What happens if any of these factors change and disappear tomorrow? What new institutional designs are required for the leadership to overcome the present challenges and forestaii possible disasters for tomorrow? The "Asian Values" Discourse and Korean Culture

The controversy over "Asian values" relates to the aiieged role culture has played in the political and economic transformation of East Asian countries. "Asian values," according to Han Sung-Joo, are identified with "a consensual approach, communitarianism [rather than individualism], social order and harmony, respect for elders, discipline, a paternalistic State, and the primary role of government in economic development" and contributed to an Asian economic miracle ( 1999: 4 ). In contrast, "Western values" are associated with "transparency, accountability, global competitiveness, a universalistic outlook and universal practices" with an emphasis on "private initiatives and the independence of the private sector" (4 ). In the last decades of the twentieth century, some East Asian countries succeeded in rapid industrialization of their economies, attaining so-caiied economic miracles. This was in sharp contrast with the slower growth and underdevelopment of economies in other world regions, like Latin America, Africa, and former communist-bloc countries. The orthodoxy of dependency theory and classic economic theory could not fuily account for this surprising phenomenon.

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Many intellectuals blamed traditional values and norms, such as Confucian culture, as the source of Korea's poverty and problems early in the twentieth century (see Chapter 2). However, with the East Asian "economic miracle," some started reassessing the legacies of the Confucian culture, now subsumed under the rhetoric of Asian values or Asian ways, considering them to be positive rather than negative factors in the economic development and modernization of East Asian countries, including South Korea. What seems clear is that, as the discussion in Chapter 2 showed, certain aspects of Confucian culture, such as an emphasis on education and the work ethic have contributed to the cause of modernization. In the context of Asian values discourse, the term "values" can be regarded as connoting, as William D. deBary notes, "the core or axial elements of a culture, the traditional ground (mostly seen as moral but not exclusively so) on which rest the culture's most characteristic and enduring institutions" (1998: 1) like the family or the state. Asian values, according to some advocates, include "attachment to the family as an institution, deference to societal interests, thrifts, conservatism in social mores, and respect for authority" (Kishore Mahbubani, as cited in The Economist, July 25, 1998: 23). Others on the list include the importance of education, hard work, and decision making by consensus rather than confrontation by the authoritarian regimes in Asia in their pursuit of economic development goals. Max Weber recognized that ideas play a major role in determining social reality. In his influential essay "The Protestant Ethic and the Spirit of Capitalism," Weber presents his thesis that "Calvinistic Protestantism promoted the rise of modern capitalism" (Weber, 1958). Weber asserts that Protestantism produced a new kind of businessman, one that contributed to "the making of a new man-rational, ordered, diligent, and productive." According to David Landes, two virtues shaped the personality of a new person: the stress on instruction and literacy and the importance accorded to time (2000: 11). Other scholars have further refined the Weberian thesis. There may be universality in Weber's argument, because, as Landes notes, Weber's "ideal type" of capitalist can be found not only among Calvinists, but also among their later sectarian avatars. In fact, people of all faiths and no faith can grow up to be rational, diligent, orderly, productive, clean, and humorless. They do not even have to be businessmen. One can show and profit by these qualities in all walks of life. The main point of Weber's argument, as Landes notes, is that "in sixteenth- to eighteen-century northern Europe, religion encouraged the appearance in numbers of personality type that had been exceptional and adventitious before and that this type created a new economy [a new mode of production] that we know as [industrial] capitalism" (2000: 12). Not surprisingly, the recent debate and discourse on Asian values has also been inspired by a consideration similar to Weber's effort to identify the ideal type of capitalist businessmen. As some East Asian countries successfully attained a "miracle" economy of rapid industrialization, some wondered what enabled the economic transformation of these countries. It started with Japan in the post-World

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War II years but was followed by the so-called little tigers of South Korea, Taiwan, Singapore, and Hong Kong in the 1970s and 1980s. Japan was the lead bird in a formation of flying geese because the Japanese model of the developmental state was soon emulated by other East Asian economies, known as the newly industrializing countries (NICs). The "flying geese model" was initially advanced by Japanese professor Akamatsu Kaname in the 1930s but was subsequently made popular in the 1970s, especially in the writings of Kojima Kiyoshi and his notion of the "catching-up product cycle" (Kojima, 1978). A variation of this theme, within the regime of technology diffusion, is Bruce Cumings's (1984) "product-cycle" dynamics thesis of the political economy of Northeast Asia. 7 The controversy over the Asian values debate can be summarized as follows. First, Asian values are allegedly less supportive of freedom and individual rights than Western cultures and are more concerned with (social) order and individual discipline. Second, the claims of human rights in the areas of political and civil liberties are less relevant and less appropriate in Asia than in the West (Sen, 1997: 2). The corollary of this thesis is that the defense of authoritarianism in Asia was advanced on the grounds of "the special nature of Asian values" and "in the interest of economic development." Lee Kuan Yew, the former prime minister of Singapore, was a champion of the idea of Asian values. He defended "authoritarian arrangements" in the East Asian NICs of the little tigers on the grounds of their alleged effectiveness in promoting economic success. The Asian values argument can be substantiated by the null hypothesis that no relationship exists between freedom and prosperity. Empirical studies and statistical investigation of East Asian countries show that the particular set of economic policies and circumstances that existed in each of the East Asian NICs, despite restrictions on personal freedom, led to the success of "economic miracles." The factors deemed essential for progress and prosperity, according to skeptics of Asian values, were said to consist in qualities like openness to competition, the use of international markets, a high level of literacy and education, successful land reforms, and public provision of incentives for investment, export, and industrialization. What made the Asian values discourse controversial, however, was the fact that some of these factors were already present but had little to do with democracy. Most of them were, in fact, sustained as elements of economic policies pursued by authoritarian states in East Asia, whether South Korea or Singapore or China, in the era prior to "third-wave democratization" in the late twentieth century. The economic policies and practices of these East Asian NICs were often called neomercantilist or industrial target policies of the capitalist developmental state (see Chapter 3). The historical facts show, however, that economic success was followed by the transition from authoritarianism to democracy in the East Asian countries of South Korea and Taiwan in the course of the late 1980s into the 1990s. Before addressing

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the question of how and why modernization necessarily leads to democratization (see Chapter 3), however, the relationship between Asian values and modernization must be clarified first. To the extent that those Asian countries belong to the sphere of Confucian culture and value systems, some analysts began identifying the cultural roots and foundation for these economic miracles and the modernization of East Asian countries in Confucianism. The key to successful economic growth and prosperity was said to be Confucian values and value orientation. As deBary notes, "early stigmatizing of Confucianism as backward and retrograde had begun to yield in the sixties and seventies to a revisionist view of East Asia's 'post-Confucian' culture as a powerful human resource for modernization .... It was Singapore's Lee Kuan Yew who most visibly dramatized the combination of authoritarian direction, high-speed economic progress, and the promotion of Confucian values" (1998: 4). Others, like Mahathir bin Mohamad of Malaysia, also argued that Asian cultural values (especially Confucianism) were more hospitable to paternalistic authoritarianism of the sort practiced in Singapore, Malaysia, or Indonesia than to Western-style democracy and therefore could constitute an obstacle to democracy. 8 Asian values, however, can indirectly promote democracy by promoting economic modernization. In a conversation with the managing editor of Foreign Affairs, Singapore's senior minister Lee Kuan Yew advanced the thesis that "culture is destiny;' because "more than economics, more than politics, a nation's culture will determine its fate" and future (Lee and Zakaria, 1994: 1). 9 1f "culture is destiny" as claimed by Lee, what explains a culture's failure in one era and its success in another? How about cultural changes? To the extent that the West has left a mark on the "the rest" of the world, including East Asian values and culture, the proper balance between the old (tradition) and the new (transformation) will be something that needs to be explored, rather than explained away (Lee and Zakaria, 1994: 9-10). When asked "Is there an Asian model of political and economic development?" Lee responded, "I don't think there is an Asian model, as such. But Asian societies are unlike Western ones ... that Eastern societies believe that the individual exists in the context of his family. He is not pristine and separate. The family is part of the extended family, and then friends and the wider society. The ruler or the government does not try to provide for a person what the family best provides" (Lee and Zakaria, 1994: 125-126). According to F. Zakaria, Lee was skeptical that other nations could replicate East Asia's economic success, which he attributed to East Asia's cultural legacy and norms of Confucianism. While critical of the American social order, with an emphasis on the rights of the individual at the expense of social norms, Lee strongly supported America's presence and balancing role in East Asia. If America withdrew, Lee predicted, other powers like Japan and China would go their own way, and that would unsettle the region's peace. Lee Kuan Yew's position, that "the Western political system, with its intrusive government, was not suited to family-oriented East Asia," was challenged by the

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then South Korean opposition leader, Kim Dae-Jung. In a contributing essay to Foreign Affairs in 1994, Kim Dae-Jung argued that "culture is not necessarily our destiny [but] democracy is," because "Asia has a rich heritage of democracy-oriented philosophies and traditions." Kim continued that "Asia has already made great strides toward democratization" and that "Asia has its own veritable traditions of democracy, the rule of law, and respect for the people" (1994b: 194-195). Asia's destiny, as far as Kim was concerned, was to improve upon Western concepts, not ignore them. IO The underlying premise of Kim Dae-Jung's argument was that Asian values are as universal as are the Western values associated with democracy. Democracy and democratization would represent the universal rather than particularistic values. In taking this position, Kim made it known that he disagreed with the positions taken by some key advocates of Asian values like Singapore's Lee Kuan Yew and Malaysia's prime minister Mahathir. The latter advocated "the Asian Way" or the "ASEAN way" approach to economics and business, as well as diplomacy in the age of globalization ("Asian Values Revisited: What Would Confucius Say Now?" 1998: 23-28). The Association of Southeast Asian Nations' (ASEAN) most fundamental policy, since its founding in 1967, was the public stance of "noninterference" in the affairs of neighboring countries. Thus, "the ASEAN way has come to reflect Asian values--even before the term was coined--of consensus and nonconfrontation to diplomacy. But in subsequent years, this posture of the ASEAN way came to be subject to threats, as demonstrated by the Asian financial crisis of 1997-1998 and the intervention in the East Timor nation-building conflict" (Cotton, 2001). The myth of Asia's economic miracle has widely been challenged. This myth, according to economist Paul R. Krugman, led many pundits to worry that the West could not compete with the awesome growth of East Asia's economies. "But there is nothing miraculous about the success of Asia's tigers;' because "their rise was fueled by mobilizing resources-increasing inputs of machinery, infrastructure, and education." This was similar to the now-derided Soviet economy and, in fact, "Singapore's boom is the virtual economic twin of Stalin's Soviet economy" in the 1940s (1994b). Foreseeing an impending disaster for Asia's miraculous economy, which actually arrived with the 1997-1998 Asian financial crisis, Krugman notes that "[t]he growth rates of the newly industrialized countries of East Asia will also slow down." The lesson here for Western policy makers, Krugman suggests, was that sustained growth required efficiency gains, which came from making painful choices such as enhancing competitiveness of the economy. This debate is joined by other academic writers in the United States, like Francis Fukuyama, Samuel P. Huntington, and Tu Wei-Ming, who argue that Asian cultural values (especially Confucianism) were, at times, more hospitable to the paternalistic authoritarianism of the sort practiced in Singapore, Malaysia, or Indonesia than to Western-style democracy and therefore could constitute an obstacle to democracy. But certain characteristics in Asian values, such as the meritocracy of

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Confucianism, were supportive of a modern economy and these values, by promoting economic modernization, could indirectly promote political democracy (Fukuyama, 1995c, 1999; Huntington, 1997). Although Taiwan and South Korea, from such a perspective, might constitute an exception rather than the rule, in the light of their subsequent transition to democracy away from authoritarianism, the argument is not yet settled. Fukuyama offers wise counsel. He argues that "Asia is a diverse place and values differ from country to country, and Confucianism does not always constitute the dominant cultural value," and "values almost never have direct impact on behavior, but are only mediated through political and economic institutions" (1999: 2). In the study of cultural politics in Korea's post-Confucian society, the central question concerns "institutional design rather than cultural difference" (Fukuyama, 1999: 8). Asian values clearly have played a role in shaping the economic and political institutions of East Asia. However, the attempt to use such values to explain both Asia's postwar economic growth and Asia's financial crisis is misguided, as Fukuyama notes. Economic institutions, such as lifetime employment practices, Japan's keiretsu network and Korea's chaebol, and the overseas Chinese business practice of family-based networks, are unique to these Asian societies, but it is difficult to establish to what extent they have contributed to high growth in the region because "much of Asian growth can be explained by conventional economic analysis." Moreover, these institutions have recently become "dysfunctional" in the sense that they have become obstacles to further economic growth, even though they were not harmful to growth in the past (Fukuyama, 1999). At a time when the world economy is undergoing rapid changes and transformation, the Asian values associated with "a consensual approach" and "group orientation" as well as "hierarchical order and social harmony" and "a paternalistic State" may turn out to be more of "a liability" than "an asset" in the age of globalization. In a globalized world where goods, services, and capital move uninhibited across national borders, Han Sung-joo notes, "Asian values can be a liability unless they adapt to the requirements of transparency, accountability, and limitless competition," which are commonly identified with Western values (1999: 8). Moreover, what lies ahead for the Asian economy, and what role Asian values will play, is difficult to say because "it will depend very much on how societies and governments apply values to the challenges they face" in the days ahead (ibid.). Challenges for Institutional Design Institutional design for South Korea during the Roh Tae-Woo and Kim YoungSam administrations resulted in a mix of success and failure, as the preceding analyses in Chapters 3 and 4 showed. Chapters 5 and 6 also illustrated the challenges of establishing new institutions appropriate for the post-IMF era, a task that

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was by no means easy for the Kim Dae-Jung administration. How to harmonize prevailing cultural norms and values with a reform agenda and new institutional designs and requirements in the context of Korea's democratization and globalization has been the preoccupation of political leadership in the modern Korean state in the new millennium. This book has focused primarily on South Korea, but the examination of cultural politics can also apply to North Korea (Kihl, 1994b). Whereas the Western ideas of democracy and communism were introduced and adopted by South and North Korea respectively, Korean society as a whole was imbued by the cultural norms and legacy of Confucianism. When Korea was liberated from Japanese colonial rule by the Allied powers at the end of World War II in 1945, the country was largely a post-Confucian society, where contending schools of thought prevailed to capture the loyalty of the Korean nation. Subsequent chapters have examined some of the ways in which the new political ideas of democracy borrowed from the West have interacted with traditional cultural norms and legacies of Confucianism. The extent to which the political life of the South Korean state has been shaped by cultural forces is clearly a matter of empirical analysis. Modern Korea has been a country divided into two separate political entitie~: the Republic of Korea (ROK or South Korea) and the Democratic People's Republic of Korea (DPRK or North Korea), established in 1948 south and north, respectively, ofthe thirty-eighth parallel. They have been regimes in contest throughout the Cold War era and beyond (Kihl, 1984). While the Cold War has come to an end globally, the Korean Peninsula glacier has been slow to melt, despite the historic summit meeting of June 2000 in Pyongyang between the leaders from the South and the North. Their adoption of the joint declaration was a positive move, but their words were not met by deeds (see Chapter 7). This topic merits further examination from cultural theory perspectives as well as from historical and strategic perspectives of the Korean Peninsula. Confronting Korea's Uncertain Security Future

The security equation on the Korean Peninsula is rapidly changing with an uncertain future because of the North Korean claim that it now has nuclear weapons and an active program of building a "powerful deterrence force." 11 This dramatic reversal of Pyongyang's nuclear stance followed its announced withdrawal from the Nuclear Nonproliferation Treaty (NPT) in 2003 and its nullification of the 1992 North-South Korean nonnuclear agreement. The Geneva Agreed Framework of October 21, 1994, the basis of U.S.-DPRK relations since 1994, is no longer viable and U.S. relations with the ROK have also become strained, in large part over basic differences on how to deal with North Korea and its nuclear threat. The latest episode of North Korea's nuclear controversy erupted while South

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Korea's Sixth Republic was undergoing electoral campaigns for the sixteenth presidential election on December 19, 2002. The saga of North Korea's nuclear threat has continued with the launching of the new Roh Moo-Hyun administration in February 2003. The domestic political context and the foreign policy environment surrounding South Korea are therefore intertwined. It is important to take into account both factors in addressing the nuclear issues and the U.S.ROK security alliance.

Countering Nuclear Brinkmanship and "Tailored Containment" The 2002 presidential election left the country deeply divided over the pressing policy issues of the nuclear threat from the North and the future of the U.S.-ROK alliance. A widening perception gap developed between the older and younger generations over the question of collective identity. A new generation of leadership with little memory or no firsthand experience of the Korean War tragedy had overtaken the older Koreans. The difference was over the question of how to relate to communist North Korea and how to repair South Korea's injured pride vis-a-vis its traditional allies like the United States. Nevertheless, these and other policy issues can only be addressed by open dialogue and a consensus-building style of leadership if Korea's new democracy is to make any headway in the next five years. The atmosphere of reconciliation between Seoul and Pyongyang faced its biggest setback in December 2002, when North Korea announced the renewal of its nuclear weapon's program and touched off an uneasy standoff with the United States. When the George W. Bush administration began moving to orchestrate international pressure, including economic sanctions focused on the North, this strategy was opposed by both the outgoing president, Kim Dae-Jung, and his successor, Roh Moo-Hyun. The Korean leaders called for a dialogue and a peaceful solution to the North's nuclear issues rather than a policy involving political isolation and economic sanctions. The Bush administration officials floated the idea of "tailored containment" against North Korea, or a ring of economic sanctions by its neighbors. The primary goal of this policy was to bring about the abandonment of Pyongyang's nuclear weapons development by isolating the North through economic channels. But South Korea's president, Kim Dae-Jung, expressed his opposition, noting that four decades of economic sanctions had failed to bring down the communist government in Cuba. Nevertheless, President Kim continued to emphasize that "through a solid military alliance with the U.S., South Korea's national security has become stronger" and that Korea's relationship with the United States is "a win-win situation that is beneficial for both states." America is Korea's "biggest client as well as biggest investor" ("President Kim Emphasizes U.S. Alliance," 2002). President-electRoh Moo-Hyun also expressed his skepticism that this policy of "tailored containment" was "an effective means to control or impose a surrender on North Korea." Roh added that "success or failure of a U.S. policy toward North

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Korea isn't too big a deal to the American people, but it is a life-or-death matter for South Korea" and "therefore, any U.S. move should fully consider South Korea's opinion." Hearing this objection, the Bush administration seemed to back away from the sanctions idea, as noted by the State Department spokesperson at a subsequent news briefing (Brooke, 2003). Continuous anti-American demonstrations and protests in South Korea also prompted talks in the United States, in Congress, and on newspaper op-ed pagesthat the U.S.-ROK alliance should be reviewed. If South Korea, a democracy, did not want American troops stationed in Korea, it might be time to start withdrawals. During the fall presidential campaign, candidate Roh said he wanted the American troops to stay in Korea, thereby distancing himself from statements he had made a decade earlier when he wanted the Americans to go home. As president-elect, however, Roh was quoted as bringing up the possibility of American troop withdrawals during a meeting with South Korea's top military commanders, by saying, "I wanted to ask whether you have a long-term plan on how the South Korean military could make up for a possible reduction" in U.S. troops (Brooke, 2003). South Korea's president-elect was operating under a new strategic vision that "[i]f the U.S. and North Korea start a war, we will stop it," a statement he made during the presidential campaign in downtown Seoul (Brooke, 2003). This led to an eleventh-hour withdrawal of political support by his campaign partner, the National Alliance 21leader Chung Mong-joon, on the grounds that the United States was South Korea's ally and that there was no reason the United States would start a war against North Korea. Trained as a lawyer, Roh seemed to think that Seoul could mediate disputes between Washington and Pyongyang and that a compromise settlement could be worked out between the parties of conflict. That was why he suggested that diplomacy and dialogue instead of confrontation and containment should be the approach to settling conflict on the Korean Peninsula. Choosing diplomacy through dialogue over the threat of force sounds good and reasonable, in theory, but Seoul must also realize that its leverage and role as an intermediary are severely limited. Seoul was not only caught in the nuclear cross-fire between Pyongyang and Washington, but was also kept as a hostage by the nuclear-ambitious Stalinist North Korean regime of Kim Jong-11. Moreover, an emphasis on diplomacy over force must be accompanied by a recognition that diplomacy alone does not always work in international politics. Countering North Korea's nuclear brinkmanship, which itself was an act of political strategy on the part of Pyongyang, required appropriate strategic responses by the United States and its allies. These entailed combining both diplomatic negotiation and military preparedness, because Pyongyang was playing a highrisk game of nuclear deterrence. Pyongyang's act of nuclear brinkmanship was intended to get the attention of the outside world focused on its grievances. Pyongyang's demands on political and security issues included the guarantee by the United States not to launch an

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attack and a negotiation on the U.S.-DPRK nonaggression pact. When North Korea broke the nuclear moratorium and violated the legal obligations associated with the 1994 Geneva Agreed Framework and the International Atomic Energy Agency (IAEA)-imposed safeguards, the United States did not react by launching a preemptive attack against the nuclear installations of the North but kept the doors open for an eventual diplomatic solution to the latest controversy. The official position was that the United States cannot reward the North's bad behavior and that the DPRK had to first express its willingness to renounce its nuclear program (Sanger, 2002).

Revamping U.S.-ROKAlliance Relations under Stress? Fortunately for the United States, the Roh government's expression of its desire to strengthen the ROK alliance ties with the United States was a positive development. Following his appointment, Prime Minister Goh Kun made it known that Seoul was opposed to the scaling down of the U.S. troop presence in South Korea, including a reported change in the tripwire role by the U.S. infantry division along the demilitarized zone. A U.S.-ROK joint military exercise, Foal Eagle, was successfully launched as the new Roh administration was taking office on February 25, 2003. Roh's cabinet also endorsed a plan to contribute a token number ofROK troops to the U.S.-led war on Iraq and urged the National Assembly passage of such a bill. Roh made his support known for dispatching a noncombat engineering unit of 600 soldiers and about 100 medical personnel to support Coalition Forces and also to take part in postwar rehabilitation efforts. Roh himself was slated to make an official state visit to meet with President Bush early in May 2003, which was to be preceded by a visit of Vice President Dick Cheney to Seoul in April2003, but these meetings never materialized. Foreign Minister Yoon Young-kwan made a four-day visit to Washington in March with the mission of laying the groundwork for President Roh's first summit with President Bush. Yoon's visit was also intended to clear some outstanding doubts between the two governments and to set the table for constructive dialogue between their leaders. Roh's agonizing decision on a noncombat troop dispatch to Iraq was well received by the Washington circle. During Foreign Minister Yoon 's meeting with Secretary of State Colin Powell, Seoul reportedly presented to Washington a "road map" for a diplomatic solution to the dangerous nuclear standoff between the United States and North Korea, which Yoon subsequently explained to some reporters as a plan describing "step-by-step items" that might be taken to draw the North into multilateral talks. Powell said similar ideas were already on the table and he would study it. Yoon's warm reception in Washington this time was due largely to Roh's promise to support the U.S.-led coalition against Iraq. By making a timely promise of his "active support" of the unpopular war, Roh was betting on the chance to rescue the damaged U.S.-Korea alliance that he regarded as indispensable not only to

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deter another devastating war on the peninsula, but also to pursue inter-Korean reconciliation. On his way back from the U.S. trip, Foreign Minister Yoon stopped in Tokyo to pay a courtesy call on Japan's prime minister Junichiro Koizumi. Yoon held talks with Japanese foreign minister Yoriko Kawaguchi and they pledged to continue joint efforts to peacefully resolve North Korea's nuclear issue. In the meantime, Roh's top national security aide Ra Jong-yil began a four-day visit to Russia and China to discuss ways to resolve North Korea's nuclear issue. The dispatch of Ra and Yoon to the four nations could be seen as representing Roh Moo-Hyun's forward-looking views and optimistic approach to ending the ongoing nuclear standoff between North Korea and the United States. The legislative vote on the troop dispatch bill turned out to be highly controversial due to antiwar protests and twice-delayed voting in the National Assembly. In the end, the bill received an overwhelming endorsement, with 179 in favor, 68 against, and 9 abstentions. This was a major victory for President Roh, who had told parliament that sending the troops would strengthen ties with Washington, which he argued was essential for a peaceful solution to the DPRK nuclear crisis. Roh acknowledged, during his first address to the National Assembly, that many in the country were opposed to war in Iraq but said that "regretfully, international politics are swayed by the power of reality, not by principles." Seoul also announced that South Korea would donate $10 million to assist war refugees in Iraq through various United Nations (UN) agencies, including the World Health Organization and the Food and Agriculture Organization. In this way, Roh defended his foreign policy decision on pragmatic grounds as driven by the "forces of reality." In closing, a few parallels and lessons could be drawn between the present and past administrations that could prove useful for Roh to chart his own path for the next five years of his term in office. First, the political transition from the old to the new administrations in 2002-2003 was smooth and orderly, but also somewhat different from the previous cases of the Kim Young-Sam and Kim Dae-Jung administrations. Whereas inaugurating Kim Dae-Jung as president in 1998 meant a genuine change of political regimes from the ruling party to an opposition party, this was not the case with Roh. Despite the fact that Roh's ruling MDP suffered from an intraparty factional schism, the 2002-2003 political transition was much closer to the case of 1992-1993, where Kim Young-Sam succeeded the Roh Tae-Woo presidency. Therefore, one can see more continuity than change in policies from the 2002-2003 political transition and succession. 12 Second, since the 2002-2003 regime change was from the ruling party to the same ruling party, it may be said that South Korean democracy has gone through an increasingly mature, institutionalized, stable, and routinized process of political transition. Third, this replacement of leadership from the MDP of Kim DaeJung to the MDP ofRoh Moo-Hyun, even if it was between the varying intraparty factions of the ruling MDP, might ensure greater stability and continuity in politics and policies, especially in substance if not in style and appearances. Fourth, whether

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the intraparty process of political succession can be applied to the progressive wing of the MDP as well as to the conservative wing of the GNP in the days ahead is neither clear nor obvious. However, the 2002 presidential election has set a precedent that may be repeated, if the similar circumstance of divided government continues to persist. Finally, South Korea's party politics and party system must go beyond the bossism-based, top-down hierarchy in its structure and process of partisanship and leadership recruitment. Instead, the primary system that was instituted by the Roh Moo-Hyun candidacy within the MDP in the 2002 presidential election and led to Rob's nomination and victory may have laid the groundwork for institutionalizing and consolidating the democratic and participatory process of Korean party politics for years to come.

Continuing Saga of North Korea's Brinkmanship Although the DPRK is in a failing state economically and its population is starving due to food shortages and the mismanagement of its economic resources, North Korea has an ambitious program of developing weapons of mass destruction (WMD). After expelling two on-site monitors from the IAEA, North Korea announced that it was restarting its nuclear fuel reprocessing laboratory that would supply it with weapons-grade plutonium. If North Korea is allowed to attain its nuclear ambitions, the Korean Peninsula will no longer be nuclear-free because the nuclear-armed North Korea may force South Korea and Japan eventually to acquire their own nuclear weapons capability. In order to forestall such an eventuality, it seems imperative that all the parties concerned, including the two Koreas and the major powers with an active interest in Korean security, begin to address the ways of defusing the tensions and promoting confidence-building measures through arms control and disarmament. North Korea blamed the United States for its decision to restart the nuclear program, calling it an act of self-defense in reaction to U.S. aggression. Its decisions were necessary, it argued, because President Bush called North Korea an "axis of evil" country, together with Iraq and Iran, and made threatening statements toward and halted the delivery of much-needed fuel oil. Pyongyang also criticized the Bush administration for recruiting Russia and China to pressure North Korea, saying that the crisis could and should be solved by the United States and North Korea directly without outside interference (Rosenthal, 2003). Speaking to U.S. troops at Fort Hood, Texas, President Bush said, "In the case of North Korea, the world must continue to speak with one voice to turn that regime away from its nuclear ambitions" ("President Rallies Troops at Fort Hood" 2003: 5). Tensions between Washington and Pyongyang intensified in October 2002, when U.S. officials said North Korea had admitted to an American visiting

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delegation to Pyongyang that it had maintained a clandestine nuclear weapons program of enriching uranium. Ironically, what began as a fact-finding mission to resume long-stalled talks with the reclusive Stalinist North Korea turned into unproductive and failed diplomacy. In late December 2002, North Korea raised the stakes drastically by announcing that it would reopen a nuclear complex in Yongbyon that had been mothballed under the 1994 Geneva Agreed Framework to prevent the DPRK from developing nuclear weapons. In exchange for that agreement on a nuclear moratorium, North Korea was to receive two light-water reactors (LWRs) constructed by an international consortium, including South Korea, Japan, and the United States, and 500,000 tons of fuel oil annually until one of the two LWRs was ready to be turned over to North Korea (Kihl and Hayes, 1997). But the shipments of fuel oil were halted in December 2002 when Washington learned about Pyongyang's clandestine highly enriched uranium nuclear weapons program. 13 This nuclear dispute and brinkmanship by North Korea triggered a series of diplomatic moves and international countermeasures by the IAEA. Seoul dispatched respective envoys to Beijing and Moscow to exchange views on how to stop Pyongyang from reactivating nuclear facilities that could reprocess spent fuel rods into weapons-grade plutonium, thereby forestalling the looming crisis. If the 8,000 fuel rods temporarily stored away under the agreement were reprocessed, according to one analysis, the North could have enough plutonium to make three to six weapons within a month or two (Pinkston and Lieggi, 2003). North Korea had already hinted that it would withdraw from the NPT regime that it had joined in 1985. It had once threatened to withdraw in 1993, but reversed its stance three months later after obtaining an agreement with the Clinton administration to defuse the nuclear standoff in June. Not surprisingly, the IAEA called for an emergency meeting of its thirty-fivemember governing council. The UN nuclear agency passed a resolution on January 6, 2003, condemning North Korea's latest efforts to resume its nuclear program and giving Pyongyang an opportunity to come back into compliance with international nonproliferation agreements that it had signed. The IAEA resolution "deplores in the strongest terms North Korea's unilateral acts to impede the functioning of containment and surveillance equipment at its nuclear facilities and the nuclear material contained therein" ("Nuclear Agency Condemns North Korea," 2003). The IAEA called on North Korea "to cooperate urgently and fully" by following a series of steps, including meeting immediately with IAEA officials, allowing the reestablishment of surveillance and containment measures, and "giving up any nuclear weapons program expeditiously and in a verifiable manner." North Korea is given "one more chance to come into compliance," as the IAEA official added, and "unless the DPRK cooperates fully with the agency, the mat-

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ter will be referred to the Security Council" ("Nuclear Agency Condemns North Korea," 2003). The initial U.S. position was to seek a "verifiable and visible" dismantling of North Korea's nuclear weapons program as the precondition for resuming talks with the DPRK. To defuse the escalation and confrontational atmosphere over the nuclear standoff, the trilateral coordination and oversight group held a meeting in Washington, D.C., attended by high-ranking diplomats from its member countries of the United States, South Korea. and Japan. The two-day conference agreed on a common negotiation strategy vis-a-vis the DPRK by seeking immediate dialogue with North Korea to address their common and mutual concerns (Weisman, 2003). A statement of about 800 words noted that "there is no security rationale for North Korea to possess nuclear weapons" and endorsed dialogue with North Korea as a "useful vehicle for resolving serious issues." The U.S. delegation explained that the United States was "willing to talk to North Korea about how it will meet its obligations to the international community ... [while stressing that] the United States will not provide quid pro quos to North Korea to live up to its existing obligations." President Bush also noted that he believes "diplomacy will work" and he had no intention of invading North Korea (Weisman, 2003). Instead of seizing the opportunity for diplomatic settlement of its nuclear issue, Pyongyang continued to accuse the United States of spreading a "false rumor" about its nuclear program. "There is an increasing danger of a nuclear war on the Korean peninsula due to the U.S. criminal policy toward the DPRK," according to a statement released from Pyongyang's Korean Central News Agency (KCNA). "The U.S. is deliberately spreading a false rumor about the DPRK's 'nuclear issue,' in particular, in a bid to vitiate the atmosphere of inter-Korean reconciliation and unity and foster confrontation among Koreans," the statement insisted ("N. Korea slams U.S. 'Criminal Policy,"' 2003). This accusation was followed by a bombshell, on January 10, that the DPRK was declaring "an automatic and immediate" withdrawal from the NPT and, one day later, that North Korea might end its self-imposed moratorium on ballistic missile tests. Pyongyang defended the withdrawal decision on the grounds of safeguarding its sovereignty, dignity, and right to existence. It charged that the United States "instigated the IAEA to adopt another 'resolution' against the DPRK" and that "the NPT was being used as a tool for implementing the U.S. hostile policy toward the DPRK ... aimed to disarm and destroy the DPRK by force." Insisting that its withdrawal was "a legitimate and self-defensive measure," the statement added that the DPRK had "no intention to produce nuclear weapons" and its "nuclear activities at this stage [would] be confined only to peaceful purposes, such as the production of electricity" ("N. Korea slams U.S. 'Criminal Policy,"' 2003). Foreseeing the IAEA reporting on the matter to the UN Security Council for

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further action, the DPRK insisted that its withdrawal from the NPT was "totally free from the binding force of the safeguards accord with the IAEA under its Article 3." If the UN Security Council decided to impose sanctions against the DPRK for withdrawal from the NPT, Pyongyang would consider such measures as tantamount to "an act of war" and as leading to "a holy war" and even "World War III" ("N. Korea slams U.S. 'Criminal Policy,"' 2003). The U.S. move to entice the UN Security Council to deliberate on the IAEA report on North Korea's withdrawal from the NPT was tabled when Washington learned that Russia and China were inclined to oppose such a move by the Security Council.

China Agrees to Host the Six-Party Beijing Talks on North Korea Clearly, the United States and the DPRK were locked in high-stakes diplomacy by playing a game of nuclear brinkmanship. While the United States was preoccupied with preparation for a possible war against Saddam Hussein's Iraq so as to disarm its WMD program in violation of UN sanctions, the Kim Jong-11 regime of North Korea chose to confront the Bush administration for a nuclear showdown. The primary objective of the United States was to checkmate the North Korean strategy of nuclear brinkmanship and risk taking, while continuing the war in Iraq and the postwar reconstruction process. When the IAEA governing board voted, on February 12, to cite Pyongyang for defying UN nuclear safeguards and sent the issue to the Security Council Pyongyang accused the IAEA of being "America's lapdog" and urged it to investigate instead "the illegal U.S. behavior that brought a nuclear crisis to the Korean peninsula." Since North Korea already withdrew from the NPT in January, the DPRK had no legal obligations on the IAEA safeguard, the official KCNA news agency insisted. It also noted "discussing the nuclear issue through IAEA was an act of interference in internal affairs" ("North Korea Accuses Nuke Agency of Meddling," 2003). Defense Secretary Donald H. Rumsfeld said North Korea might pose a bigger threat as "a supplier of nuclear weapons" and as "the world's greatest proliferator of missile technology." The U.S. options under this circumstance were rather severely restricted: 1. Do nothing 2. Try to destroy North Korea's WMD program through surgical air strikes on its nuclear installation at Yongbyon 3. Impose economic sanctions and international pressure through the UN and support by its allies and friends 4. Seek negotiated settlements directly with the North along the lines of the Geneva Agreed Framework of October 1994

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Since the timing was ill suited for the United States and favorable to North Korea, the last choice of a quid pro quo settlement of the dispute between the two sides (the position of Pyongyang) seemed to be the only viable and workable approach in the short run. On February 13, Secretary of State Colin Powell told Congress that the United States forwarded a proposal to hold multilateral talks on North Korea's nuclear weapons program that would include China, Russia, and South Korea but that Pyongyang turned this proposal down. This stalemate was broken, however, when China agreed to host trilateral Beijing talks involving the United States and the DPRK in April. Unfortunately, the first session of this Beijing talk did not produce an agreement between the parties on the nuclear standoff ("Powell Says North Korea Rejects U.S. Proposal for Regional Talk," 2003). Finally, the U.S. effort to entice North Korea to a face-to-face meeting within the framework of multilateral talks seemed to have borne the initial, intended fruit when China agreed to host such a meeting in Beijing to address the North Korean nuclear issue. This gathering of interested parties of the United States and the DPRK under the auspices of China as the host nation and participated in by the three neighboring countries of South Korea, Japan, and Russia, would provide a face-saving device for launching a multilateral forum for international agenda setting and for possible problem solving on Korean Peninsula security. This effort eventually led to six-power diplomatic talks on North Korea's nuclear standoff. In preparation for the six-party talks on North Korea's nuclear issue, a flurry of diplomatic maneuvers and consultations took place among the interested parties in the region. Chinese vice foreign minister Wang Yi went to Pyongyang and met with North Korean officials to finalize the setting and timing of the six-party talks in Beijing. During his visit to Tokyo, Chinese foreign minister Li Zhaoxing told reporters that the talks would be held in Beijing on August 26, 2003. While the Russian diplomat was in Beijing, South Korea's vice foreign minister visited Moscow to meet with Russian deputy foreign minister Alexander Losyukov, who, in turn, was expected to meet with a North Korean Foreign Ministry envoy a few days later. U.S., South Korean, and Japanese officials were scheduled to meet in Washington for further consultation and policy coordination. The Bush administration hoisted a trial balloon ahead of the forthcoming sixparty talks in Beijing. On August 7, Secretary of State Powell sent a "subtle signal" to Pyongyang that the United States was prepared to compromise on a top North Korean demand: a written security guarantee that the United States would not attack it. Powell said that there could be a way to "capture assurances to the North Koreans ... that there is no hostile intent" and added that "there are ways that Congress can take note of it without being a treaty or some kind of pact." A senior State Department official said that this was "not an entirely new formulation" (Koppel, 2003). The six-party Beijing talks is a classic example of a two-level diplomacy game

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played out in the global political arena involving both formal and informal channels. All the delegates were presenting their government's official policy position at the meeting, while they were also open for and susceptible to informal channels offace-to-face communication. It was no surprise, therefore, to see that on the first day of the six-party talks on August 27, Assistant Secretary of State James Kelly emphasized in his formal presentation that the U.S. goal was a "complete, verifiable and irreversible" end to North Korea's nuclear weapons program, without spelling out a "road map" to achieve this goal other than to stress this principle. Kelly also emphasized that President Bush had said the United States had no intention of attacking or invading North Korea, while stressing that the United States would not accept Pyongyang's demand for a nonaggression treaty. He did say, however, that Washington was open to exploring other options. Later on, in an informal bilateral session with the North Korean delegation on the same day, the North Koreans repeated that they did possess nuclear weapons and raised the new possibility both of conducting nuclear testing to prove they did indeed have such weapons and also to show they had the means to deliver a bomb. The North Koreans said they had been forced to go nuclear because of the "hostile policy" of the United States. In response, Kelly said that this was a very serious matter and that the United States would share this information with the other participants. On the second day, on August 28, the North Koreans made a long presentation to the entire gathering and repeated the same points they had made privately to Kelly, to the distress of the other participants (King, 2003). Despite these unfriendly exchanges between the U.S. and North Korean delegates, Washington was reportedly "pleased" with the outcome of the six-party Beijing talks. "We have a long, long way to go. But the U.S. delegation is recommending that the U.S. stay the course" in continuing the six-nation negotiation process. "We know that the North Koreans are the most difficult interlocutors, but we are committed to the process" and policy direction set by President Bush. In fact, the U.S. officials said they were "pleased by the chemistry of the talks, not between Washington and Pyongyang, but among the other participants: the U.S., China, Russia, South Korea and Japan" (Chinoy, 2003). The three-day meeting, from the U.S. point of view, had led to a situation where the other nations, except for North Korea, no longer saw the nuclear issue as just a problem between Washington and Pyongyang. The Beijing talks was also a nuclear poker game with six players at the table, where the negotiators played cards that ranged from strong to weak hands. While the first round of the six-party Beijing talks in August was largely unproductive, China was confident that it had impressed the global community, particularly the United States, with its clout with Pyongyang. Despite its vocal rhetoric, claiming nuclear deterrence as a legitimate tool of self-defense, there were signs that Pyongyang was possibly ready for some form of a climb-down. Pyongyang did not carry out its threat of testing potent weapons, such as a nuclear bomb or a medium-range missile test-firing, on the day of the fifty-fifth anniversary of the founding of the DPRK in September (Lam, 2003a).

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It was reported that China had told North Korea to halt its "constant warpreparation" and to concentrate instead on building up its feeble economy. Chinese president Hu Jintao allegedly offered three suggestions to the North Korean leader Kim Jong-11, while making it clear that Pyongyang must dismantle its nuclear weapons program: work toward attaining economic self-sufficiency, try out a Chinese-style open door policy, and improve relations with neighboring countries after halting its WMD program (Lam, 2003b). If true, this was a clear case of strong-arm tactics of diplomacy by China toward North Korea in exchange for continuing China's close ties with Pyongyang and also China's desire to improve its future relations with the United States. A second round of six-party talks, tentatively scheduled for mid-December, did not materialize but was held on February 25, 2004. Pyongyang finally said it would freeze its nuclear program in return for Washington providing energy aid and removing it from a list of nations that sponsor terrorism. But President Bush was firm and clear about what the United States expects North Korea to do. Speaking at a brief news conference with China's visiting premier, Wen Jiabao, Bush responded to a question raised by the press by saying that Pyongyang must dismantle its program. "The goal of the United States is not a freeze of the nuclear program. The goal is to dismantle a nuclear weapons program in a verifiable and irreversible way. That," he said, "is the clear message we are sending to the North Koreans" ("North Korea Nuclear Deal Rejected;' 2003). 14 The outcome of the scheduled diplomatic gathering will impact U.S.-ROK relations as to the future course of action and will focus on a new direction for the alliance relations in the years to come. As part of the plan of a sweeping reorganization of U.S. troops across Asia, the visiting U.S. defense secretary Donald Rumsfeld said the process of relocating U.S. forces back from the highly fortified demilitarized zone would begin "as soon as possible." The troop movements "will reflect our new technologies and abilities to deter and defeat any aggressions against allies such as South Korea" ("U.S. Talks Korea Strategy Shift;' 2003). Rumsfeld's Seoul visit, to attend the annual U.S.-Korea security meeting, was the third leg of Rumsfeld's six-day Asian trip after Japan and Guam. South Korea and the United States are in the process of redefining their alliance. Under the fifty-year-old alliance, U.S. soldiers have acted as a "tripwire" along the demilitarized zone to deter an attack from North Korea, which would guarantee American retaliation and involvement in the war. In Seoul, the National Security Council's deputy director, Lee Jong Suk, who is said to embody many of the so-called 386 generation's views, is said to have the greatest influence on President Roh Moo-Hyun on foreign policy matters. A new generation of South Korean leaders, backed by young voters identified with the 386 generation, is more independent-minded and less beholden to the United States (Onish, 2003). 15 North Korea's "secretly developing a nuclear weapons program" was a key justification for the Bush administration's policy of imposing economic sanctions and directing efforts toward further political isolation and a regime change in the

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North. It has also led to the U.S. administration seeking a new theatre missile defense system, increased military spending, and continued U.S. troop presence in Asia and in South Korea. The September 11, 2001, attack on America and the Bush administration's resolve to address the transnational terrorism threat to U.S. security have added complexity to an otherwise familiar and conventional episode of the latest nuclear controversy over North Korea. These and related policies of the U.S. administration may be undermined by the proposed six-party talks settlement of North Korea's nuclear issue. Under the regionalization strategy pursued by the Bush administration, the North Korean nuclear issue will become an agenda of multilateral regional diplomacy in Northeast Asia. Seoul will be forced to seek a new strategy to accommodate the changing security dynamics alluded to earlier. In the end "all politics is local." Clearly, the Roh Moo-Hyun administration policy on inter-Korean relations will be impacted by the outcome of the April 2004 parliamentary elections and the results of the November 2004 U.S. presidential election, which will determine whether the current Bush administration will be reelected. The uncertain security future awaits the Roh Moo-Hyun administration in the days ahead. 16

Conclusion: Security Dilemma and Democratic Rebirth? What are the implications and lessons of the unfolding drama of the North Korean nuclear standoff for the future of Korean democracy? As a way of concluding the present discourse on transforming Korean politics, this study will turn next to the broader question of "war and peace" on the Korean Peninsula. Depending on how the current nuclear controversy is addressed and managed, there exists the distinct possibility of the worst-case scenario of a nuclear-armed North Korea becoming a reality (Cha and Kang, 2003). The danger exists for North Korea's overblown rhetoric of threat and retaliation to come true as a "self-fulfilling prophesy." Likewise, the new national security strategy of the Bush administration, proclaimed in order to defeat global terrorism in the post-September 11, 2001, security environment, may be invoked, although the Bush strategy may be ill suited to Korean security. After Iraq, North Korea may be the next target; at least that is what Pyongyang believes. The literal application of the Bush strategy to North Korea, especially invoking the doctrine of preemptive war, may end up with the greater tragedy of leading to another Korean War. The price of the regime change that results from the war may be too high and costly when directed at the belligerent and bellicose North Korean regime of Kim Jong-II. An outbreak of a Korean war will need to be avoided by all means; it will not only undermine the economic foundation, but also destroy the fragile peace sustaining the burgeoning political and civil societies of South Korea's new democracy. "Avoiding the apocalypse" in the Korean Peninsula will require the United States and its allies to take deliberations on Korean security with renewed seriousness

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(Noland, 2000; 2004). This requires upgrading the policy debate over "nuclear North Korea" to a higher level of scholarship and practical strategies that confront the "war and peace" issues directly (Cha and Kang, 2003). The U.S. policy toward Korea, for instance, suffered from the past practice of treating Korea as "ad hoc, reactive, and derivative of the alliance with Japan" (10). But the U.S. policy to confront "nuclear North Korea" must go beyond this practice of treating Korean policy as an appendage. The security dynamics of the Korean Peninsula are a classic case of a security dilemma arising from the situation of an "anarchic" structure of international politics. Under anarchy, independent action taken by one state (in this case the DPRK) to increase its security leads to actions taken by the United States so that its allies of South Korea and Japan feel less secure. The nuclear standoff as a security dilemma is a specific type of Prisoner's Dilemma game, where cooperation between North Korea and the United States with its allies is difficult because of the possibility of defection and cheating in the absence of mutual trust. Does this mean that there is no hope and possibility of achieving cooperation under anarchy? According to Robert M. Axelrod's 1984 study, there are three ways of overcoming a security dilemma: The first is by promoting "the mutuality of interests," that is, the extent to which each actor (in a Prisoner's Dilemma situation) can achieve its own interest by acting cooperatively rather than competitively. The second is by lengthening "the shadow of the future," that is, the extent to which actors value future payoffs from further interactions. The third is by limiting "the number of players," because cooperation becomes more difficult as the number of players increases (1984). That the United States chose to involve other actors in the nuclear talks, under the umbrella of the six-party Beijing talks, may make the situation more complex and complicated than confronting North Korea face to face. Does this mean that a future war is unavoidable and inevitable on the Korean Peninsula? The answer is "not quite," because it all depends on what the United States and its allies are prepared to do next. The only way to avoid war and conflict because of the nuclear standoff, again as Axelrod argues, seems to by "lengthening the shadow of the future." U.S.-North Korean dialogue and negotiation over the nuclear issue, or lack of it, reflect what may be called a "tit-for-tat" game, which is usually played by states that are perceived as distrustful: "If you cheat, I will do likewise" and "I will do to you what you did to me." This strategy works, however, only if there is a long shadow of the future (Axelrod, 1967). Unfortunately, with the continued stalemate and brinkmanship, this shadow is rapidly dwindling and, with it, a narrowing of choices and the loss of a degree of freedom in foreign policy decision making (Nye, 2003: 78-79). The U.S.-South Korean alliance cannot be taken for granted any more but will require constant vigilance and nurturing. The sequence of an unfortunate development, starting with a fatal traffic accident of two school girls run over by a U.S. military vehicle in 2002, led to "anti-American" sentiment and subsequent street

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demonstrations getting out of hand, with burnings of the American flag, which was heavily covered by the media. This episode, combined with U.S.-ROK divided opinion on policy toward North Korea, helped an unconventional politician, Rob Moo-Hyun, win his presidential bid over a "pro-American" candidate in the 2002 December presidential election. If the offer of mediation by Rob as president-elect to settle the disputes between Pyongyang and Washington ever materializes (an offer not accepted by either side and intended to maximize his political support at home) the discussions that follow would provide a useful venue and forum for further negotiation. Depending on the substantive and procedural components of the proposed solution, the good offices offered by a third party might also provide a face-saving device and an occasion for dispute settlement by either one or both parties to the conflict. Rob's suggested offer of mediation was dismissed as unrealistic because it overlooked an important fact that the United States was Seoul's ally and North Korea was its adversary and that Seoul could not possibly play an impartial role in mediation. Fortunately, China stepped in as a host country to call for a sixparty talks on North Korea in Beijing, as already noted. Following the first two meetings in August 2002 and February 2003, which failed to produce a breakthrough, the third meeting of the Beijing talks in June 2004led to a more flexible stance, with the United States offering "highly conditional" incentives to North Korea to give up its nuclear weapons.'7 A culture of democracy is fundamentally a culture of peace. As the newly elected government of Rob Moo-Hyun took office on February 25, 2003, South Korea's democracy was expected to continue its historical mission of building a just and prosperous society at home through the transformation of politics and economics. The same applies to building a peaceful, prosperous, and unified country of Korea through promoting democratic peace on the Korean Peninsula. 18 In his inaugural speech, Rob Moo-Hyun urged North Korea to abandon its nuclear weapons ambitions, spelling out the benefits Pyongyang could expect to receive in international recognition, support, and aid if it renounced its weapons drive. North Korea dismissed this plea and launched an antiship missile into the Sea of Japan (East Asia) on the day of Rob's inauguration, thereby causing the rattling of the Asian financial market. The new Rob Moo-Hyun administration must learn quickly how to reconcile the security and the welfare needs of Korea's new democracy. There exists a delicate balance between the two competing sets of values of security and welfare. Security is like oxygen: it is essential for life, yet taken for granted. Likewise, it is when one starts to lose security that one realizes how invaluable it is for sustaining the freedom and democracy that people often take for granted in a liberal democracy like South Korea today. The democratic performance of Korea's Sixth Republic in the past fifteen years has depended as much on the institutional rule of political games and selfgovernance as on the historical, social, economic, and cultural surroundings that

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have nurtured and transformed Korean politics. The quality of Korean democracy in the next fifteen years, needless to say, will depend as much on the quality of its own citizenry, as manifest in a vibrant civil and political society, as on leadership skill and vision, so that every generation of the Korean people will get the government that they deserve. On September 20, 2003, President Roh Moo-Hyun announced that he would quit the Tuling MDP. Roh's retaining of his position as chief executive does not depend on majority support in the National Assembly. The party split means that the ruling party is now factionalized into two rival groups of those loyal to Roh, with forty-three seats, and others loyal to the party's founder, former president Kim Dae-Jung, with sixty-three seats. The opposition GNP still commands a simple majority of 149 in a 273-seat unicameral legislature. This new move by Roh was interpreted as a resolve to launch a new political party to choose his own lawmakers for the scheduled April2004 National Assembly election ("South Korea's Roh Quits Party," 2003). 19 What is at stake for Roh's bid of electoral victory in the April 2004 general election will depend on the health of the economy and foreign and domestic policy agendas. Foreign direct investment in the Korean economy has been on the decline for the last four years. The reported cases of foreign investment fell from 4,140 in 2000 to 3,340 in 2001, 2,402 in 2002, and 1,215 for the first six months of 2003. As a result, overseas investment in Korea dropped from $15.22 billion in 2000 to $11.29 billion in 2001,$9.1 billion in 2002, and $2.66 billion in the first half of 2003 ("Foreign Investment on Decline for 4 Years," 2003). The ROK National Assembly voted the passage of a controversial five-day workweek bill on August 31, 2003, in clear defiance of fierce opposition from labor groups. The newly enacted labor law, which was passed by 141-57 votes with 32 abstentions, put to an end a three-year debate between labor and management and reduces working hours from forty-four to forty hours per week by abolishing half-days on Saturday. Under the new law, both private- and public-sector companies with more than 1,000 employees will have to adopt the five-day workweek system beginning on July 1, 2004, and those with 300 employees or more one year later on July 1, 2005 ("Five-Day Workweek Bill Passed Despite Protest," 2003). Achieving democratic self-governance for the Korean people has come a long way since the initial democratic opening in 1987. The interplay and interaction between the competing political forces of liberalization politics and the democracy movement in civil society led to an eventual authoritarian decay and the successful democratic transition. The new political order of the Sixth Republic has gone through several distinct yet overlapping stages: democratic transition, consolidation, institution building, and maturation of democracy. Democratic transition was relatively smooth and orderly, as contrasted with democratic consolidation and reform. "Democratic" institution building also proved to be a painstaking and

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continuing process, as was the challenge of nurturing democratic norms and rules for Korean politics. 20 During a New Year's news conference in January 2004, Roh Moo-Hyun apologized for disappointing his country with a political funding scandal involving his close aides. Under the constitution the sitting president is exempt from being charged with criminal offences other than grave crimes threatening national security. He also insisted that the economy was showing signs of a turnaround while calling on labor unions to refrain from demanding excessive wage increases. On January 15, Roh's foreign minister was replaced in the midst of Seoul's delicate diplomatic dealings and balancing act over the pending six-party Beijing talks on North Korea's nuclear standoff ("Roh Apologises for Funding Scandal," 2004). The Korean experiment in democratic self-governance, in the final analysis, has been no better or no worse than the quality of political participation of its citizemy. As voters, the people choose their leaders as agents and representatives who are held accountable to the will and wishes of the people, as the principal. Skeptics argue that the Korean experiment in democratic self-government is faltering, while optimists contest it has, so far, proven to be vigorous and viable. 21 Finally, the democratic rebirth and maturation of Korea's Sixth Republic was a political miracle in the making. Despite unknowns and adversity, this new democracy promises to continue to plod ahead.

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Transforming Electoral Politics Through Presidential Impeachment An Epilogue

Political upheaval and uncertainty have ensued in South Korea immediately following an unprecedented impeachment of sitting President Roh Moo-Hyun by the opposition-dominant National Assembly on March 12,2004. This political uncertainty was to continue until the Constitutional Court could decide, within 180 days, whether to uphold the 193-2 vote or to restore President Roh, who was down but not out of power. The lopsided legislative vote did not include the ballots of 49 members of the pro-Roh Uri Party legislators, who were evicted from the chamber when they physically occupied the podium to block the passage of the bill. The impeachment issue was met by public outcry, as shown by a candlelight vigil protest by Roh supporters, and it galvanized the electorate during the subsequent National Assembly election onApril15. This election was seen as a referendum on President Roh, whose popularity had sunk from a high of 80 percent to as low as 30 percent during the first year of his administration. More significantly, it reflected the determination of grass-roots populists to withstand orchestrated attacks by political conservatives. The legislative dominance of the Uri Party, established through its dramatic electoral victory, will help to restore political stability for the remainder ofRoh's five-year term in office, which will end on February 25, 2008. The electoral returns, as shown at the bottom of Table 1.3, indicate the major historical realignment that will shape the future political landscape of South Korea's Sixth Republic. What Happened? The seventeenth National Assembly election was remarkable because, unlike earlier general elections, there was no major contest over wide-ranging campaign issues. Candidates and political parties were held hostage by one single agenda item-the recent impeachment of President Roh by an outgoing National Assembly. The opposition parties were ali hamstrung, and handicapped in their campaigns, by a voter backlash against impeachment that delivered a bonanza of votes to Uri Party candidates. The Roh administration's crucial policy failures, such as the lowest growth rate of the economy in five years (with 3.1 percent of the GDP growth in 343

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2003), ineptness of presidential leadership, and a campaign funds scandal involving presidential aides, did not appear to have affected voters who supported the Uri Party that Roh had endorsed. In a last-minute attempt to galvanize voter support, the main opposition GNP chose as its new leader Representative Park Geun-hye, daughter of the late dictator Park Chung-Hee. She held broad appeal to conservative voters, especially in the southeastern region. The second opposition MDP likewise chose as its new campaign leader another female legislator, Representative Choo Mi-ae, who would consolidate the traditional voter support in the southwestern region. GNP chairwoman Park suggested "a more flexible and future-oriented North Korea policy" as well as institutionalizing inter-Korean relations, a clear reversal of the traditional GNP policy stance. Charges of "biased" election-related coverage by TV media, like the state-owned Korea Broadcasting Service, emerged during the weeks of heated campaigns. Munhwa Broadcasting Company (MBC) tastelessly aired a feature on Park ChungHee's assassination during the week of the election campaign that depicted his assassin, Kim Jae-kyu, as furthering the cause of restoring democracy. Daily newspapers struggled to retain objectivity and impartiality in election coverage under the watchful eye of the National Election Commission. Election campaigns began turning nastier, using negative TV ads. The governing Uri Party chose to highlight GNP representative Park Geun-hye wearing a broad smile in the National Assembly, allegedly when the motion to impeach the president was being declared passed; this was to reinforce the voters' already negative feelings toward the impeachment. As a post-Confucian society, South Korea is sensitive to traditional values and cultural norms involving gender and age issues. The fact that the two opposition parties of GNP and MDP chose as their leaders young female legislators was in itself a new path-breaking development. The new MDP leader was once a staunch supporter of Roh Moo-Hyun, but she did not approve of his subsequent switchover of party loyalty and affiliation. When the Uri Party chairman, Representative Chung Dong-young, said during an election rally that "the older voters in their 60-70s might as well stay home" rather than (wasting their time) voting on the election day, this gaff led to an emotional protest by the senior citizens. 1 Not surprisingly, as the campaign was picking up steam, a larger-than-normal voter turnout was predicted by pollsters, especially among older voters. According to a telephone survey of 1,017 adults nationwide, conducted by the Chason Ilbo and Korea Gallup on April 10, 80.2 percent replied that they would "certainly vote" in the upcoming election. This was up from 74.5 percent in a survey ten days earlier on March 30. Particularly dramatic was the proportion of citizens over age fifty (89.6 percent) who indicated that they would exercise their right to vote. In contrast, 63.4 percent of people in their twenties, 78.3 percent in their thirties, and 86.6 percent in their forties reported that they would be voting.

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The electorate was also very well informed. Of those surveyed, 83 percent said that they were aware of the new "one person, two votes system," which was being introduced for the first time in general election. Under the "one person, two votes system," 31.3 percent replied that the candidate and party they intended to vote for would be different. This was an increase from the 21.3 percent revealed by a Gallup survey taken just ten days earlier. However, almost half of the voters were undecided five days before the election date-23.7 percent did not reveal the candidate they would support, and 24.9 percent answered that they might change their minds. This suggests that the Korean voters were fully aware of the importance that the election would play in nurturing democratic institutions and in determining their political destiny for the future. 2 Two additional minor parties competed for the National Assembly seats: one was class-based and the other a regionally oriented political party. The Democratic Labor Party's election committee chairman Cheon Young-se announced the party's socalled 'Three Revolutions in Welfare" platform, calling for free education, free healthcare, and public housing. The United Liberal Democrats' secretary general Kim Jong-pil stumped in South Chungcheong Province, promising special benefits for his home districts. He reminded the voters that despite laws already passed by the National Assembly, his party would continue its efforts to ensure that the capital be moved away from Seoul to the home province in central South Korea. Of the 35.6 million eligible voters over the age of twenty, the voter turnout registered 21.3 million people, or 59.2 percent, which was above average and higher than the 57.2 percentage of voter turnout registered in the sixteenth National Assembly election in 2000. Four years earlier, in 1996, the voter turnout was 63.9 percent. A total of 1,175 candidates who came from fourteen separate parties and groups competed for 243 single-member district seats (an average of 4.8 per each electoral district). Why? Meaning and Significance of the Election The decisive victory of the Uri Party in the general election, by capturing 152 seats in the 299-seat National Assembly, compared with 121 seats won by the GNP and a meager nine seats by the MDP, was far better than what pollsters had predicted on the eve of the presidential impeachment voting on March 12. Only three other groups-the DLP (ten seats), the ULD (four seats), and Independents/ Others (three seats)-were successful in placing candidates. 3 This will help an embattled President Roh Moo-H yun, who was humiliated by an opposition-dominant National Assembly, to vindicate his cause. Roh's hands before the Constitutional Court will also be strengthened so as to win back his presidency. Neither of the opposition parties, the GNP nor the MDP, returned as the majority party in parliament. The GNP had 137 and the MDP 61 seats in the outgoing legislature, the Uri Party only 49 seats. This will mean that a change in the status

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quo will be accelerated in South Korea's political landscape-a movement away from the old politics toward the new, overcoming regionalism and bossism. The era of "Three Kims" in Korean politics was declared officially over with the victory of Roh Moo-Hyun in the December 2002 presidential election. It is no coincidence that the Uri Party, broken away from the ruling MDP, stands for "openness and participation" at the grass roots. Roh was the MDP standard bearer in the December 2002 presidential election, but he quit the party so as to endorse its progressive splinter faction, which launched the new Uri Party only six months before the general election of Apri12004. Roh now has the progovernment Uri Party on his side, and it commands a simple majority in the unicameral legislature. On progressive social legislation the Uri Party will be joined by the DLP, which has emerged as the third-ranking party in parliament. As for the impeachment proceedings, opinions were divided between those who said that the process should move quickly to end the political vacuum resulting from the suspension of the president's powers, and those who believed that the deliberations should move through due process and that a fair trial, in the end, would convince the people to support the court's final decision. During its third hearing, one week prior to the April15 election day, the Constitutional Court ruled to accept the National Assembly Impeachment Committee's request to call four witnesses involved in the corruption scandal allegations associated with presidential aides. It also asked the National Election Commission to turn over its records concerning the president's alleged election law violations. The court did not insist, however, that the president make an appearance in court, although it did not rule out such a possibility at a future date. The latest political saga of presidential impeachment indicates more than a failure of political leadership. It is a reflection of deeper structural problems in Korea's new democracy. It offers a dramatic demonstration of the problems of divided government. A government with both a popularly elected president and a popularly elected parliament requires close cooperation between the two branches of government, which did not exist during the first year of President Roh Moo-Hyun's administration. Such a working relationship and coordination are essential in order to prevent the type of governmental gridlock that occurred during the latter half of the Kim Dae-Jung administration in 2001-2003. With the Uri Party victory in the general election, Roh acquired a renewed political mandate to press on with the reform agenda that he as a candidate had presented during the December 2002 presidential election campaign. This agenda included, among other items: the constitutional amendment that would establish either "a parliamentary cabinet system" or "a shared power presidency." Roh was on record as favoring discussions on a constitutional amendment that would start in 2006 but be concluded in early 2007, so that the new election rule would apply to the next National Assembly election in 2008. Roh was also on record as favoring the removal of an excess of regionalism by

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introducing mid-sized electoral districts with multiple members in replacement of single-member districts. How and why this would make the parliamentary election more efficient and democratic was, however, not explained fully. The proposition would be disputable, at best, and require further specification. This was also true for the concept of reforming the governmental systems into either "a shared power presidency" or "a parliamentary cabinet system." In a larger sense, one must realize that institutions do matter for Korea's new democracy, but "institutional tinkering" like developing new election laws and constitutional amendments may represent "technical fixes" for Korea's democratic institution building. "Building social capital," which is not easy by any means, is "the key to making democracy work" for Korea, as it is for all other old and new democracies (Putnam, 1993: 185). "Networks of civic engagement" are a form of social capital. Korea's new democracy recently excelled in the critical area of democratic consolidation, as was manifested in the 2002 double elections for local representatives and the president. The heated campaigns associated with these elections were detailed in Chapter 8. This involved an unfolding political drama and the civilsociety group activism evident in the dynamic electoral processes. The latest changes to the electoral system for the National Assembly, timed with the seventeenth general election, illustrate why "institutional tinkering" may not be as important as "building social capital" for Korea's new democracy. The newly elected seventeenth National Assembly will operate under the new electoral rules of a two-ballot system, voting for the candidate and for the party. When it was enacted by the outgoing National Assembly, overriding the old rule passed four years earlier, it was praised as an example of a successful political reform measure. However, without involving civil-society groups in the process of legislation, such as holding public hearings and eliciting testimonials by civic organizations (like the Citizens Coalition for Economic Justice and the Citizens Council for Fair Elections), no legislative enactment is likely to further the cause of building social capital. According to this new rule, voters would get to choose a candidate as well as a party in each of the 243 single-member electoral districts. Any party that garners 3 percent of the overall vote or elects a minimum of five members is eligible to share in an additional fifty-six proportional-representation seats. The same principle of a "two-ballot system" had existed during the preceding National Assembly sessions from 2000 to 2004, but the total membership had been reduced from 299 to 273 in 2000 as a way of furthering efficiency in the hard economic times of the Asian financial crisis. The relevant question is: Has an increase of twenty-six seats four years later in 2004, back to 299, constituted a "qualitative" improvement in Korea's new democracy? Is the price tag too high for an enlarged house of deputies? This appears to be more like institutional tinkering than dealing with substantive issues of building social capital and trust that relate to democratic institution building.

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The historical significance of the political developments of 2004 cannot be overlooked. South Korea has written a new political chapter with the Uri Party's major electoral victory. It more than tripled its seats from 49 to 152, thereby capturing a simple majority in the 299-seat unicameral legislature. "Our people wrote a new history of elections," said acting president Goh Kun in a televised address, adding "With this election, I hope a new era of politics of co-existence and cooperation will be born." He also reminded the populace that the government and all political parties should concentrate on reviving the economy. The April 15, 2004, election marked the first time a liberal party won control of a hitherto conservative chamber in forty-three years. The pro-Roh Uri Party could push through a reformist legislation previously stymied by opponents during the first year of the Roh administration. The word "Uri" in Korean means "Our," and the party's full name is the "Yollin Uri dang" meaning "Open Our Party" or "Open and Participatory Our Party." A new political era of liberal domination in Korean politics is now in the making, the first time since the Second Republic (19601961) was overthrown by the military coup led by then major general Park ChungHee on May 16, 1961. The electoral victory of the Uri Party may also herald a new political trend in Korea's electoral democracy that overcomes the long-standing inertia of (1) regionalism, (2) factionalism, and (3) "cronyism." The 2004 parliamentary election was one of the few occasions of a fairer election with less costly election campaigns and a large-scale turnover of the parliamentary membership. The incumbency status of the candidates did not help. A total of 187 out of 299 legislators (62.3 percent) were the first-term lawmakers in the seventeenth National Assembly. The emergence of a socialist party as a legitimate political force in the 2004 general election also reflects the growing political maturity of South Korea's new democracy. For the first time, the Democratic Labor Party (DLP) was able to win parliamentary seats in a general election. By winning ten seats it emerged as the third-ranking party in the National Assembly, replacing the MDP, which suffered a devastating election defeat. 4 As a result, organized labor will now have legitimate representation in the legislature and will no longer need to resort to violence as a strategy for pursuing its interests. The "socialist" representation in parliament that the DLP epitomizes should be welcomed as a landmark along the path of South Korea's democracy building. What Lies Ahead? Future Prospects

In accordance with the election law and the Constitution, Roh's powers as president were immediately suspended the moment an impeachment motion was passed in the National Assembly. Prime Minister Goh Kun thereupon assumed presidential duties, including the role as military commander-in-chief. If Roh were to be removed from office by the six affirmative votes of the nine-member Constitutional Court, a new presidential election would have to be held within sixty days.

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This eventuality, however, was less likely with the Uri Party's surprising electoral victory, and the potential emerged for avoiding continued uncertainty during 2004 with the opening of the new seventeenth National Assembly on June 5. To prevent the new assembly from becoming a forum for further partisan wrangling, a suggestion was made that the outgoing National Assembly override the impeachment vote before the closing of its session on May 28. This proposal was turned down by the GNP chairwoman on the grounds that "The matter now rests with the Constitutional Court. We should wait and respect its decision." The electoral victory for the Uri Party may lead to many legislative battles. It may also lead to warmer ties with communist North Korea if it is able to resolve the nuclear standoff peacefully in a timely fashion. It could also evolve into South Korea having a foreign policy more independent of the United States. In an effort to reinforce ties between the United States and South Korea as allies, U.S. vice president Dick Cheney stopped in Seoul on South Korea's day of election, wrapping up a weeklong visit to Asia. He met with acting president Goh Kun and offered praise that "democracy is strong in the Republic of Korea." He also challenged allies in the region to do more to contain North Korea's nuclear program and also urged allies with troops in Iraq to stand firm. 5 What specific lessons and implications for policy making can be drawn from the preceding analysis of presidential impeachment politics and the parliamentary election of 2004? The following two substantive ideas regarding the transformation of Korean politics stand out as important for charting the future course of democracy in Korea. First, the clash of democratic values and future visions was evident in the contest between the populist style of liberal politics that the Uri Party and President Roh Moo-Hyun subscribe to and the more conservative orientation and democratic norms of pluralism that the opposition parties of the GNP and the MDP seem to represent. The political passion and ideological zeal displayed by politicians during the 2004 confrontation, however, had to be tempered by both the practical and pragmatic considerations needed to reconcile the competing sets of rival interests. This reconciliation was essential to resolving conflicting political, social, and economic interests. A zero-sum logic, aU-or-nothing approach and style has dominated South Korean politics for many years, especially during the latest controversy over the politics of presidential impeachment and parliamentary election. What Korea's new democracy requires in the future, however, is not so much "a high-risk and high-stakes" style of political game but more of a "pluralistic and participatory" style of politics that is based on a genuine commitment to furthering the common interest of the population at large. The essence of practical politics is the art of the possible, and herein lies the challenge for future political leadership in coalition building. As power is the key value in politics, the art and science of politics deals with the question of allocation of authority, influence, and power. Politics, to borrow from political scientist David Easton, deals with the "authoritative allocation of values for a society." Power and

350 EPILOGUE

authority constitute the key values of politics, much as money and wealth are those of economics. Power as a political value is necessary in order to achieve the higher societal goals of morality and ethics. Hence, power by nature is relative as a value, although an absolute claim is often advanced in the name of politics. The political leadership in Korea's new democracy must learn how to achieve the political settlement of conflicts through a "give-and-take" art of negotiation and bargaining. Herein may be found an answer as to how to overcome the failed politics of compromise, as manifested so dramatically in the impeachment politics surrounding Roh Moo-Hyun. Second, the crisis within South Korea in 2004 represents a failure of coordination in the body politic evidenced by the absence of equilibrium between the executive and the legislative branches of the government. During the Kim Dae-Jung administration, a weak legislature and a strong executive typified the Korean central government, as symbolized by the charge of "imperial presidency." The Roh Moo-Hyun presidency announced a reform agenda that would restore the equilibrium between the legislative and executive branches of government. By endorsing the Uri Party in the parliamentary election, Roh had expected to promote a progressive coalition in the legislature, but this effort was met by unexpected roadblocks associated with a presidential impeachment and a hard-fought battle during the parliamentary election. As this book has argued, three principal idea types (modernization, democratization, and globalization) have provided road maps and pathways for the Korean state to traverse since its democratic opening of 1987 and transition in 1988. In the absence of a "unique equilibrium" in post-Confucian society, the political elites and leadership must learn how to reconcile and coordinate the principled beliefs of democratization with the world views of modernization and the causal beliefs of globalization. Establishing this equilibrium will bring about the essential institutional changes and reform needed to transform Korean society and politics. The latest political episode of presidential impeachment can therefore be seen as a blip on a larger picture associated with the "Grand Transformation" of Korea from a post-Confucian society into a modem polity in search of both power and prosperity. This continued quest will shape the future of Korea as a nation and its place in the world at large. Despite all these political uncertainties and turmoil, the future for Korea's new democracy does not appear to be as bleak as the pessimists would imagine. The reason is that, so long as the competing interests and political parties work within the institutional framework, democracy will be able to weather this latest storm and potentially emerge even stronger as South Korea continues to plough ahead. April 18, 2004

Postscript

On May 14, 2004, the Constitutional Court gave its verdict by rejecting the parliament's impeachment of President Roh Moo-Hyun. The Korean Constitution, in Article 65, stipulates that in order to impeach public officials, including a president, the accused should be guilty of severe violations related to "the performance of official duties." The violations as charged "are hardly perceived as severe enough to discharge the president," the court presidentYun Young-chul said when he read the verdict in a nationally televised session. In making this announcement, Yun refused to reveal how the nine justices voted, thereby hinting that there was a split in opinions. 1 Among the main reasons for impeachment-charges of electoral law violations, incompetence, and corruption-the court rejected two. The court ruled that Roh had, indeed, violated the election law requiring public officials to stay neutral when he remarked to reporters in February that he was in support of the Uri Party candidates in the the forthcoming general election. His remarks drew a warning from the National Election Commission, but those violations did not qualify as "grave violations of duty" requiring impeachment. The second charge of Roh's economic mismanagement could never be considered grounds for impeachment, in the court's opinion. On the third charge, corruption among presidential aides, the court ruled that this could have occurred before Roh assumed office and that Roh's involvement was not clearly established. Given this ruling, President Roh, who was reinstated, owed the nation both an apology for breaching the election law and a pledge to uphold the rule of law. The coourt's ruling offered the president an opportunity to free himself from the pursuit of partisan interests and to focus instead on serving the entire nation with the support of the newly constituted National Assembly. The Korean people deserve that high level of statesmanship from their elected leaders. Roh's challenge in the remainder of his term lay in restoring national confidence and in helping to build a broad consensus for support of his domestic reform policy agenda and workable foreign policies. 2 Without Roh's reaffirmation of a determination to defend the Constitution, both in letter and in spirit, his administration will fail to seize the opportunity to move Korea's constitutional democracy forward in the days ahead. May 15,2004

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Notes

Notes to Chapter 1 1. Sen (1999: 5). 2. U.N. Development Programme (2002: 3). 3. As for examples of how the new ideas came to shape the post-World War II era, see: Keynesian "new thinking" in postwar settlement (Ikenberry, 1993), Stalinist political economy of central state planning (Halpern, 1993), decolonization (Jackson, 1993), and human rights policies (Sikkink, 1993). 4. For Max Weber, human beings are motivated to action by "ideal and material interests." In Weber's (l946a) famous "switchmen" metaphor: "Not ideas, but material and ideal interests, directly govern men's conduct. Yet very frequently the 'world images' that have been created by 'ideas' have, like switchmen, determined the tracks along which action has been pushed by the dynamic of interest" (280). Therefore, interests are the engine of action, pushing it along, but ideas define the destinations human beings seek to reach and the means for getting there (Swidler, 1986: 274). 5. For the local business elites to survive in the colonial state they had to struggle by learning to compete and collaborate with the Japanese colonial authority. One prominent industrialist, Kim Yon-su ( 1896--1979), was the son of a prosperous landowner and a native of the Koch'ang area in North Cholla Province. He was educated in Japan's Kyoto Imperial University. His elder brother, Kim Song-su (1891-1955), was a founder of Kyongsong Weaving Company in 1917, became the founder ofPosong College, the present-day Korea University, and served briefly as vice-president of the First Republic in May of 1951. Another set of brothers, Min Tae-sik and Min Kyu-sik, were prominent in finance, and Park Heung-sik distinguished himself in commerce. They and Kim Yon-su were business entrepreneurs in the colonial era from 1910 to 1945 (McNamara, 1990: 13-18; Eckert, 1991). 6. For those scholars giving greater attention to mass politics, as manifest in their opinion surveys, see Shin (1999). Shin's primary concern is to ascertain average citizenry competence and participation in democratic consolidation of Korea's new democracy. 7. The task of clarifying each of the concepts, "ideas, values and culture" and their interrelationship, is not an easy undertaking. This is not the place to dwell upon the merit or demerit of the "ideas, values, culture" trilogy, except to say that this framework provides a heuristic device for our proceeding with a policy analysis. Further elaboration on "conceptual frame of ideas, values, and culture" will be given toward the end of the present chapter (see pp. 27-31). 8. On the effects of the 1997-1998 Asian financial crises on the Korean economy, see subsequent discussion in chapter 5 (see pp. 157-160). 9. Four Modernization policy objectives, instituted by the PRC leadership of Zhou Enlai and Deng Xiaoping before Zhou's death in January 1976, were vigorously implemented under Deng's reign in 1980-1996. In 1978, a dissident, Wei Jingsheng, put up a poster, "The Fifth Modernization," on Democracy Wall in Beijing. In 1979, he was arrested and convicted for "counterrevolutionary" activities and was imprisoned from 1979 to 1993 and, again, from 1994 to 1997. For Wei's plea for the causes of human rights and democratization (i.e., the Fifth Modernization in China), see: Wei (1997). 353

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I 0. As the third wave of democratization is drawing to a close, the breakdown of what are sometimes called "illiberal or hallow" democratic states has also become a distinct possibility. One can start thinking about the possibility of a fourth wave of democratization, such as what tomorrow's China may face as it crosses the threshold of $2,500 per capita income. For an analysis of the future prospect for a Fourth Wave of Democratization, see: Diamond (1999: 261-278). II. In his study of institutional performance in modern Italy, Putnam (1993) traces the roots of Italy's civic community to the legacies of medieval Italy and analyzes the ways in which social capital and trust have emerged within the context of socioeconomic development in the modern era. 12. Game theory originated with economists who were trying to explain choices among actors participating in a market. It seeks to explain the economic and political choices of decision makers by placing those choices in the context of a game. The theory, as such, is based on several key assumptions and governing rules. Those useful for political science analysis include: (I) rational actors seek absolute gain when choosing among strategies; (2) preference among strategies can be operationalized and rank-ordered; and (3) cooperation is difficult under a zero-sum situation, where the Prisoner's Dilemma prevails. This leads to a suboptimal outcome (see Rasmussen, 1989). A nested game refers to the situation where the ruling coalition conducts its political bargaining and negotiation with a multiple set of actors in the political arena (Tsebelis, 1990; Jesse eta!., 2002: 401).

Notes to Chapter 2 I. Huntington (1991: 310). 2. Fukuyama (1995c: 23, 28). 3. Whether the Confucian ethos and value orientation is the functional equivalency of the Protestant ethics and ethos of Calvinism in the West is often disputed by the students of contemporary politics and economics. Max Weber was among the first to consider Confucianism ill-suited as an agent for evolving capitalism and modernization in traditional China (Weber, 1946, 1951). However, the Confucian cultural legacy of a work ethic and frugality has proven itself to be conducive to the subsequent modernization and economic development within the cultural realm of East Asian countries. 4. The prevailing notion was that the Koryo dynasty was a Buddhist and the Choson dynasty a Confucian kingdom. The process of Confucianization of Korea, however, was already in progress during the late Koryo kingdom (de Bary and Haboush, 1985: 73; Deuchler, 1993). 5. The Confucian authority, according to Lucian Pye, comes in a variety of forms in East Asia. It ranges from "the combining of competition and consensus" in Japan, to "illusion of omnipotence" in China, and to differing "forms of aggressive Confucianism" in Korea, Taiwan, and Vietnam (Pye, 1984: 55, 158, 182, 215-247). 6. Modernization theorists argue that the rise of industrial society is linked with coherent cultural shifts away from traditional value systems. Economic development, according to these theorists, leads to two types of social change that are conducive to democracy. The first is to transform a largely materialistic social structure into a culture that can help stabilize democracy. The second is to foster interpersonal trust and tolerance by placing high priority on self-expression and participation in decision making (lnglehart, 2000: 92). 7. The teachings of classical Confucianism were perceived as either undemocratic or antidemocratic. Chinese Confucianism, for instance (with its derivatives in Korea, Vietnam, and Japan), emphasized the group over the individual, authority over liberty, and responsibilities over rights. This suggests that Confucian societies generally lacked a tradition of rights against the state. To the extent that individual rights did exist, they were created by the state

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(Huntington, 1991b: 24). Moreover, Asia's Confucian traditions tend to vary from country to country. In Korean Confucianism, the primacy of the family seems to have been placed somewhere in-between the strong Chinese and the weaker Japanese practices. 8. The women's movement in modern Korea has a long way to go in its effort to move toward gender equality as a vehicle for democratic consolidation (S. Moon, 2002; Yoon, 2003). The gender issue will acquire a greater role as cultures change and as the social structure reflects an enhanced status for female participation in the socioeconomic life of modern-day Korea. 9. The opening of the Korean kingdom to the outside world, between 1875 and 1885, subsequently led to measures of both reform and reaction. King Kojong dispatched his official and secret envoys to China and Japan, respectively, prior to his positively responding to outside pressures and exhortations in 1879-1881. This initiative led to the launching of Korea's Self-Strengthening program, called T'ongnigimu Amun, which included a fundamental reorganization of the government, like the training of appropriate personnel and sending students abroad. However, it was soon to be met by a conservative reaction by the Confucian literati (Deuchler, 1977: 92-107). 10. Francis Fukuyama (1995c) has argued that the modernization theory, which draws a correlation between development and democracy, "has actually stood the test of time relatively well" and has been confirmed in the Confucian cultural realm of East Asia (21-22). However, this claim seems to be too simplistic and disputable. His statement that "both an element of truth and a great deal of exaggeration" is closer to the mark because "the relationship between Confucianism and democracy is far more complex than many commentators have indicated" (28, 31 ). As he argues, the Chinese and Japanese versions of Confucian traditions differ. Not only is the Korean Confucianism sui generic, rather than a variation of either the Chinese or the Japanese, but also the Korean path toward modernization is unique rather than commensurate with either the Japanese or the Chinese approaches.

Notes to Chapter 3 1. Park (1963: 292). 2. Tocqueville (1955 [1840]): 176--177. 3. Zakaria (2003: 56). 4. The primary danger for reforms of despotic regimes, according to Tocqueville, was "psychological" in nature. The sudden disappearance of fear in the masses and the loss of legitimacy in the old regime, despite improvement in the standard of living, reduction of repression, and expansion of liberty, may actually raise expectations and radicalize demands from a long-suffering population (Pei, 1994: 45). 5. From the perspective of new institutionalism, democracy can be seen as "a system in which parties lose elections" and "multiple political forces compete inside an institutional framework of uncertainty" (Prezeworski, 1991: 10--14). 6. Numerous studies focus on the ways in which soldiers-turned-politicians worked closely with the chaebol to enable Korea's "industrial take-off' and "the big push" toward "industrialization through learning" that constituted the so-called Korea, Inc. See Amsden, 1989; Clifford, 1997; Haggard, 1990; E.M. Kim, 1997; and Woo, 1991. 7. "Interest and institutions" also matter, as much as "ideas" in Korean politics. The military as an institution, with its vested interests in perpetuating its dominance and hegemony in Korean politics, is an example. A group of the Korean Military Academy graduates, particularly the class of 1955 and their associates, were recruited and patronized by Park Chung-Hee before he died in 1979. These "Young Turks" were determined to preserve the institutions of an authoritarian political order or its variation, as instituted by Park ChungHee (i.e., the Yushin system).

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8. Authoritarian withdrawal from power and democratic breakthrough came about only because of the successful strategic bargaining between the regime and opposition party leaders. The negotiations entailed agreements on establishing new institutional rules through constitutional amendment, democratic consolidation, electoral systems, and the political "entry and exit" for old and new politicians. As for the bargaining model of democratization in the Korean context, see Cheng and Kim (1994: 125-147). 9. Officially, the Fifth Republic started with Chun's inauguration on March 3, 1981, in accordance with the newly ratified Constitution of October 22, 1980. For a detailed account of "The Fifth Republic Emergence," see Kihl (1984: 75-90). Chun Doo-Hwan was the only ROK President who managed to give two inaugural addresses: first, on September 1, 1980, entitled "A Peaceful Transfer of Power" and second, on March 3, 1981, entitled "A Call for North Korean Society to be Opened" (Chun, 1981: 3-11; 2534). 10. From the new institutionalism perspective, the 1987 political change illustrates the successful negotiation and bargaining between the regime and opposition forces. Initially, the softliners within the regime opted for liberalization, but had to yield to the opposition forces in the civil society demand for democratic transition (Prezeworski, 1991: 51-66). 11. The twenty-fourth Olympiad in Seoul proved to be a turning point in the democratization of South Korea. As for the coverage of South Korea's turbulence on the eve of the opening of the Seoul Olympic Games, see Michael Shapiro's eye-witness accounts (Shapiro, 1990). Also, see Johnson, 1989; Kihl, 1984: 161-179; Kihl, 1988b: 75-90. 12. For the democracy movement and its strategy and tactics, to avoid Park's Korean Central Intelligence Agency surveillance and police control, see the accounts of twentysix Letters from South Korea by T.K. (Sekai, 1976). These letters, written from January 1973 to June 1975, were smuggled out of the country. The volume also contains a "Declaration of Conscience" by poet Kim Chi-ha as well as the texts of Presidential Emergency Decrees, including the infamous No.9. 13. Some studies are currently under way to reexamine the life history of Park ChungHee as political leader in South Korea's modern era. Cho Kap-jae (2003), for instance, has published a five-volume study of Park Chung-Hee's life that had initially appeared as a daily series in the Chosun Ilbo from October 20, 1997, to December 30, 1999, and subsequently as essays in the Monthly Chosun. 14. The 1987 political change also illustrates the inconclusive nature of transition to democracy because the reformers in the civil society were internally divided. This led to the unexpected electoral victory of the ruling party candidate in the December 1987 presidential election and an inauguration of the Roh Tae-Woo presidency on February 25, 1988. Whereas "democracy is the realm of the indeterminate," democratization is "an act of subjecting all interests to competition, of institutionalizing uncertainty" (Prezeworski, 1991: 95, 14). 15. Roh Tae-Woo's inaugural address, entitled "We Can Do It," accentuated the theme of "the era of the great common man" (ROK, 1990: 56). 16. Roh Tae-Woo's attempt at democratic transition, while continuing his "economic and social transformation" agenda, was positively evaluated by Robert Bedeski (1994). Also, see Hinton (1983) and Cotton (1995). Without enticing and involving various civil society groups in the process of reform from below, the state-building and social engineering approach to "state reform from above" that the Roh Tae-Woo administration pursued, however, was rather limited and self-defeating. Contributing authors to an anthology edited by James Cotton (1993) examine some of the prerequisites for democratization and its political process as well as the northern policy and inter-Korean relations pursued by the Roh Tae-Woo administration.

NOTES TO CHAPTER 4

357

Notes to Chapter 4 I. Zakaria (2003: 13-15). 2. This revised imagery of culture as a "tool-kit" for constructing "strategies of action," rather than the Weberian notion of action governed by "interests," where culture acts as a switchman, redirects our attention toward a different set of causal issues rather than the traditional perspectives in the sociology of culture (Swidler, 1986: 277). 3. As for the political significance of the December 1992 Presidential election and the victory of Kim Young-Sam as the first civilian president in thirty-two years, see Kihl, 1992. As for first-hand and eye-witness accounts of the emergence of Kim Young-Sam as a politician and as a crusader for the cause of democracy, see Manwoo Lee, 1990. 4. Whether Kim Young-Sam truly had a "communitarian" vision of democracy, rather than a liberal conception of democracy, is disputable at best. The common good, according to communitarianism, should take priority over all other political values, including individual preferences and self-interest (Shin, 1999: 271n1). The historical evidence will show, as this chapter argues, that most of Kim's reform agendas and their renderings were a mixed bag of successes and failures in their results. 5. Lee Hoi-chang, a former Supreme Court justice, was appointed as director of the Board of Audit and Inspection. Lee subsequently served in the Kim Young-Sam administration as its prime minister. He also ran twice unsuccessfully as presidential candidate, against Kim Dae-Jung in 1997 and Roh Moo-Hyun in 2002. For more information about Lee Hoi-chang's 2002 presidential electoral campaign, see Chapter 8, in this volume, pp. 282-289. 6. A new economic superagency was instituted that replaced the Economic Planning Board and the five-year plan of socioeconomic development. The latter institution was inaugurated by Park Chung-Hee during the authoritarian era as a key instrument of the capitalist development state for managing the Korean economy. 7. For an analysis of the 1995local autonomy election, see Oh (1999: 152-164). 8. Kim Dae-Jung was able to build his political coalition also with Park Tae-Joon. Park, as a former general and founder of the Pohang Steel Corporation during the Park Chung-Hee era, had a regional power basis in Kyongnam Province. 9. For an account of international peace and security surrounding the Korean Peninsula, with a focus on North Korea's suspected nuclear weapon's program, see Kihl and Hayes (1997: 181-426). 10. For the Kim Young-Sam administration policy toward North Korea, including stalemated inter-Korean relations, see Chapter 7 in this volume, pp. 246--248. 11. For an analysis of President Kim Young-Sam's Segyehwa reform, see Chapter 5 and Oh (1999: 147-152). 12. Establishing "the rule of law" instead of "the rule of men" tradition in Korean politics clearly was an important move toward democratic consolidation and institution-building for Korea's new democracy. Whether and how successful this step has been accomplished in Korean politics, through the court trial and conviction of two former presidents, is not something that this book can address. The fact remains that none of the successive presidents of Korea's Sixth Republic, including Kim Young-Sam, Kim Dae-Jung, and Roh Moo-Hyun, was entirely free from the financial scandals and irregularities stemming from charges of corruption and bribery by members of the presidential family and close aides, as Chapters 8 and 9 will show. 13. For the full texts of the court decision on "the December 12, 1979, and May 18, 1980" trial and deliberation, see Shindong-A Monthly (October 1996) (altair.chonnam.ac.kr/ -cnu518/data!data7_3930.html, accessed July 2002). 14. For an analysis of the 1996 National Assembly election, see Oh (1999: 181-193).

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15. Regarding the notion of government by "the rule of men" as interpreted by "men of virtue and wisdom," which is attributed to the Eastern tradition, seeP. Hahm, 1969. 16. His political rival Kim Dae-Jung was blamed, for instance, for the split in the democracy movement in the early 1980s, which led to the subsequent power grab by Chun Doo-Hwan through a military coup. Kim Dae-Jung was also criticized for inciting regional sentiment and rivalry as the basis for an electoral contest in the 1997 presidential election (Kim Young-Sam, 1999; 2000).

Notes to Chapter 5 1. Gourevitch (1986: 21-22). 2. Stiglitz (2002: 20-21). 3. Segyehwa is the Korean translation of the word "globalization," but the Kim DaeJung administration had shied away from using this particular term. 4. The Asian financial crisis of 1997-1998 may be looked at from a broader perspective that involves a study of interaction, not only between the global and regional dynamics of political and economic forces, but also between varying styles of the individual Asian countries' responses to externally induced crises. For an analysis of a complicated interweaving of economics and political forces, as well as a sensitivity to these forces in some of the Asian countries, see the individual chapter contributions in Pempel (1999) and Haggard, 2000a). 5. The litemture on the pros and cons of globalization is vast and expanding (see Chapter 1). Globalization today is a manifestation of what international relations study experts call "globalism." For such a view of globalism and interdependence, see Keohane and Nye (2001) and Nye (2003: 185-210). 6. This was contrary to the unionized labor assertion of the union's "unilateral burden-sharing." It was "simply wrong," the KCTU statement said, because Kim's policy "was totally ignoring our demand on job security and would worsen labor-management relationship by lowering credit on the government" (Korean Confederation of Trade Unions, 1999: 1-3). 7. In September 1998, the Kim government began to use stimulus spending because the rate of unemployment increased alarmingly, from 2 percent in 1997 to 8.5 percent in 1998 and through the first quarter of 1999 (January to March). This was a result of the austerity measures imposed by the IMF. The government insisted that short-term sacrifices, such as abolishing redundancies, would create more employment in the long term by strengthening competitiveness. 8. The political problems affecting economic policymaking for the Kim Young-Sam government, on the eve of the 1997 Asian financial crisis, were evident mostly in two areas, according to one expert: the mismanagement of major corporate bankruptcies (such as Hanbo Steel and the Kia group) and the failure to pass financial reform legislation, but they snowballed into a greater economic disaster (Haggard, 2000b: 131). 9. Kim Dae-Jung's political skill and his art of partisanship in building the ruling coalition as well as in mobilizing regional support are clearly his political assets and virtues. But these tangible resources must be tempered by the more intangible factors of shifting political fortune and balance of power as manifested by the surge of democracy movement at home and abroad. The economic crisis opened up a new opportunity and possibility for political miracle-making, by not only challenging both existing politics and policies but also making them more fluid (Gourevitch, 1986: 22). 10. Joseph E. Stiglitz, who was chief economist for the World Bank in 1998-99, writes that the IMF handling of the East Asian financial crisis almost "brought the world to the verge of a global meltdown." He also indicated that the one-size-fits-all economic policies

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could damage rather than help countries that had poor financial, governmental, and social instititutions to begin with (Stiglitz, 2002: 130-132). 11. Globalization itself, according to Stiglitz, is "neither good nor bad" because the countries of East Asia like South Korea have embraced globalization "under their own terms at their own pace" with an enormous benefit to them despite the setback of the 1997 Asian financial crisis. This was not the case for much of the rest of the world (Stiglitz, 2002: 20-21),

Notes to Chapter 6 1. Malthus to Ricardo, letter of26 January 1817, as cited by Landes (1998: vii). 2. Polanyi (1957: 273). 3. The 1993 World Bank study, by raising the question of how and why the East Asian economic miracle came about after World War II, seeks answers from an analysis of the role of public policy in the process of economic development and growth in East Asian countries. The institutional basis of government stability as well as strategies for rapid capital formation and accumulation, via a high savings rate and capital investment, were identified as the twin factors of policy success. These were combined with the promotion of productivity, via export-led manufacturing industry, as some of the ingredients for a successful economic take-off (World Bank, 1993). 4. The World Bank undertook its own new study of "Rethinking the East Asian Miracle" in the light of the 1997-1998 Asian financial crisis. This study involved many scholars and country analysts (Stiglitz and Yusuf, 2001; Woo-Cumings, 2001). 5. For an analysis of the December 1997 presidential election and the political significance of Kim Dae-Jung's victory as an opposition party leader in the annals of Korean democratic politics, see Oh (1999: 220-232). 6. In the end, however, the police crushed Daewoo Motor's labor resistance. The company had to lay off more than 1,700 workers, preparing for a possible sale to a foreign company, which in this case was General Motors (Kirk, 2001). 7. A showdown between the militant striking workers and the police backfired, with public opinion turning against the labor cause and the union demands. 8. However, Kim took special pride in his ability to cope with the foreign exchange crisis by creating a framework for four major reforms, and by further developing an information-oriented society for Korea. Kim also added to the list of his accomplishments, the special role he played in initiating what he called the end of the Cold War on the Korean Peninsula by undertaking the historic North-South Korean Summit talks in June 2000 (Chason llbo, February 26, 2001). 9. This policy gridlock will return, as Jongryun Mo (Mo, 2001a) notes, despite the government commitment to promote economic reforms to fulfill its commitments to the IMF, unless fundamental changes take place in the political culture, including the payoff structures of reform, and the establishment of a balance of power among political stakeholders in Korea (467-492). 10. The dilemma faced by Korea's new democracy, in the light of these and related crises, is "how to create incentives for political forces to process their interests within the democratic institutions when material conditions continue to deteriorate?" South Korea's democratic institutions are consolidated "only if they offer the politically relevant groups (such as business and labor) incentives to process their demands within the institutional framework" of democracy and market economy (Prezeworski et al., 1995: 70). 11. Sustainable democracy is possible only if the state can offer "the politically relevant groups" such as organized labor and public employees sufficient "incentives to process their demands within the institutional framework." In the absence of positive evidence that

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the organized labor is in agreement with the government labor reform policies, however, new institutional designs of economic reform other than privatization of public corporations may be necessary as an alternative strategy (Prezeworski eta!., 1995: 91-106). 12. For a positive assessment of South Korea's response to globalization impact, see Noland 2002b. In the five years since the 1997 Asian economic crisis, South Korea, according to Marcus Noland, "has made better progress than any other country in Asia (Japan included) in addressing its economic problem" (2004: 72). 13. All of these charges against members of his immediate family, including Kim's three sons, turned out not to be groundless. As Chapters 8 and 9 will show, the three sons of Kim Dae-Jung were tried and convicted of bribery. Despite these reported scandals involving the presidential family, Korea's new democracy continues to consolidate itself, upholding the institutional norms of the rule of law.

Notes to Chapter 7 1. Boutros-Ghali (1996: 53). 2. Russett (1993: 3). 3. For an overview of the changes in South Korea's foreign policy, see B. C. Koh (2001: 231-253). For a game theoretical analysis of South Korea's foreign policy strategies, with the focus on diplomatic normalization and nuclear inspection games, see W. Kim (1995, 101-115). 4. A new school of thought in international relations and foreign policy, known as constructivists, has come to emphasize the importance of ideas and culture in shaping both the reality of world politics and its discourse (Lapid and Kratochwil, 1996; Wendt, 1999). They stress the ultimate subjectivity ofinterests and their links to changing identities. Policy making in democracy, therefore, reflects the fact that interests are linked to identities and loyalties. 5. For a recent study of the origins of the reunification discourse in South Korean politics in 1960, see Hong (2002: 1237-1258). 6. For a study of the foreign policy of Korea as a divided nation system, see B. C. Koh (1984) and Kihl (1984, 1994a). 7. Several English-language versions of "Selected Speeches by Roh Tae-Woo" are available. The original version was published by the Presidential Secretariat office in Seoul in 1990, but was re-issued abroad, under the title: Korea: A Nation Transformed: Selected Speeches (by) Roh Tae-Woo. Oxford and New York: Pergamon Press, 1990. A companion volume to the 1990 book, a third version, appeared in 1992 under the new title: Korea in the Pacific Century: Selected Speeches, 1990-1992, by Roh Tae-Woo (Lanham, MD: University Press of America). The second version, from which the present book derives its information, contains a total of 63 speeches and addresses delivered. 8. Roh Tae-Woo's July 7, 1988, statement on the foreign and unification policy initiative, entitled "A Single National Community," was touted as the "Special Declaration in the Interest of National Self-Esteem, Unification and Prosperity" (ROK, 1989: 59-61). Roh's address at the 43rd Session of the UN General Assembly, October 18, 1988, immediately following the successful conclusion of the Seoul Summer Olympics (October 2-14), was entitled "Dialogue for Peace" (ROK, 1999: 3-10). 9. Upon his inauguration, President Kim Young-Sam appointed a new minister of the National Unification Board whose status was upgraded to second vice-prime minister of his cabinet. He also chose a new foreign policy and a national security team, making Han Sung-Joo his foreign minister. Han was responsible for redesigning the foreign policy goals and methods of the Kim government by (1) diversifying partnership and policy issues, (2) overcoming competition with North Korea, (3) injecting a new moral and ethical dimen-

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361

sion in diplomacy, and (4) institutionalizing the policy-making and implementation processes (Han, 1992). 10. Former president Kim Young-Sam's memoirs, entitled Kim Yongsam Hoegorok (Y. S. Kim, 2000) in Korean, appeared early in 2000, but its public reception was lukewarm. The historical value of what the former president had to say in the book, however, is considered to be noteworthy and invaluable. 11. For a useful analysis of the unification policy of the Sixth Republic, drawing contrasts between the Kim Young-Sam administration and the Kim Dae-Jung administration policies, see B. C. Koh (2001: 253-264). 12. Kim Dae-Jung's "sunshine policy" initiative toward North Korea caused dissension and schism within South Korea's body politic, between those who support and those who oppose the Seoul government engagement policy toward the Kim Jong-Il regime in the North. For an analysis of the South Korean debate over the sunshine policy toward North Korea, see Levin and Han (2002). 13. As the second summit talks failed to materialize, the first 2000 summit meeting itself became a hotly contested domestic political issue in South Korea. The Hyundai Marine Company, for instance, was charged in 2003 with making an illegal payment of up to $500 million to North Korea. This was alleged to be a payoff to North Korea by the Kim DaeJung government in an effort to expedite the process of holding the June 2000 inter-Korean summit in Pyongyang. President Kim received his Nobel Peace Prize in November that year in recognition for his accomplishments that included, among others, Kim's North Korea initiative and engagement policy toward the North. 14. Further discussion and analysis of the U.S.-North Korean nuclear standoff, following the DPRK's dramatic announcement of its withdrawal from the International Atomic Energy Agency and the Non-Proliferation Treaty regime early in January 2003, will be resumed in Chapter 9. 15. The book Orient Express was published in Moscow in 2002. It draws heavily on a confidential report prepared by a Russian foreign minister from notes taken on board during Kim's leisurely train ride across Russia in the summer of 2001. This 200-page snapshot-laden book naturally prompted a diplomatic protest from Pyongyang (Brooke, 2002). 16. For strategies to settle the 2002 U.S.-North Korean nuclear standoff, see Harrison (2003) and Laney (2003). For an analysis of Korean security dynamics in the post-Cold War era, see Kihl, Moon, and Steinberg (1993), Kihl (1994a), Moon (1996), Kihl and Hayes (1997), and Harrison (2002). 17. In a bizarre move, North Korea chose to test fire an anti-ship missile into the Sea of Japan (East Asia) on February 25, the day of the inauguration of South Korea's new president, Roh Moo-Hyun. On March 2, four North Korean MiGs intercepted an unarmed U.S. spy plane over the Sea of Japan. Pyongyang's action caused the rattling of the Asian financial market. 18. The notion of "Democratic Peace" (that democracies rarely go to war against one another) is now widely accepted in the study of world politics. The question of how and why this is the case is still debated and unresolved, however. Institutional factors, like norms and culture, as well as structural elements like economic growth, have been mentioned. Regime types and political systems have also been suggested as explanatory factors and the causes for sustaining democratic peace (Russett, 1993; Russett and Oneal, 2001). 19. The three explanations of foreign policy behavior by democratizing regimes are offered here as hypotheses, rather than as proven theories. 20. The competitive legitimacy game is being played out here between the two Korean leaders (Kim Dae-Jung's South Korea and Kim Jong-Il's North Korea). Which one of the two Kim states will win out is yet to be seen, however. Korea's future, in a way, has been

362

NOTES TO CHAPTERS 7 AND 8

held hostage by this relentless and deadly serious zero-sum game between the two Korean states (Kihl, 1984).

Notes to Chapter 8 1. Putnam (1993: 185). 2. UN General Assembly (49th Session), 1994. 3. The subway tragedy, on the eve of Roh's inauguration, led to the loss of over one hundred innocent lives due to a fire that was set by a deranged individual on an incoming commuter train. The negligence of subway operators and the lack of emergency procedures organized by the local administration made the loss of innocent lives doubly tragic. This tragedy displayed the reality of bureaucratic inefficiency at the municipal and local level of government in Korea. 4. "Netizens," literally meaning "network citizens," are mostly younger people and heavy users of the Internet. "Nosamo" refers to a group of fervent supporters of Roh MooHyun during the 2002 presidential campaigns in Korea. They organized through Internet networking and numbered close to 50,000 activists who donated time, energy, and money in support of the Roh candidacy. 5. These security and foreign policy challenges faced by the new Roh administration will be examined separately in detail in Chapter 9. 6. The large-scale socioeconomic changes within Korea began in earnest during the colonial era (1910-1945), starting with the commercialization of agriculture, rural exodus and migration, urbanization, and industrialization of the economy (Shin and Robinson, 1999). Also, see Koo (2001). 7. However, by April 2004, this situation had changed. The DLP successfully added ten members to the seventeenth National Assembly by winning two electoral constituencies but, under the Proportional Representation system, increased its at-large national delegates by eight. For details, see the "Epilogue" to this book, especially on pp. 345-350. 8. During the 2000 general elections, civic groups formed an alliance to campaign intensively against twenty-two incumbent lawmakers throughout the nation. They claimed to have identified those candidates as targets because of their alleged corruption and incompetence, and successfully forced as many as fifteen incumbents to lose their assembly seats. 9. Based on the limited sample cases it seems premature to draw any meaningful conclusion regarding the incumbency status of the presidential party and its chance of either winning or losing the regional or local-level elections. What matters more are the factors other than national politics and presidential popularity that reflect the economy and social welfare programs. The network of civil engagement and civil-society activism will come to play a greater role in the electoral contests at the national, regional, and local levels in Korea's new democracy. 10. Kim's second-oldest son, Hong-up, happened to be director of the board of trustees of the Kim Dae-Jung Peace Foundation, serving as the political arm for his father before and during the 1997 presidential election. In February 2003, Kim Hong-up was sentenced to two years in prison for taking 2.2 billion won in bribes. Kim's oldest son, Hong-il, was a sitting member of the National Assembly, but was also charged by the press for some irregularities and corruption in his public dealings and transactions. In June 2003, Kim Hongil was indicted without physical detention on charges of taking bribes from the head of a bank facing liquidation. 11. According to the Gallup Polls, Chung's rating reached a zenith of 30.9 percent on August 8. Soon thereafter, it fell to 27.3 percent on September 9, to 27 percent on October 19, to 23.6 percent on October 28, and to 21.7 percent on November 16. The most important variable in the upcoming election, according to the Gallup researchers, was "whether

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363

Roh and Chung would unite and field a single presidential candidate to take on Lee" ("Opinion Polls on Presidential Hopefuls Trace a Meandering Road to Polls," 2003). 12. Institutional designs matter for democracy, but no reliable empirical knowledge exists on the subject matter (Prezeworski, 1991: 34-37). As for an analysis of certain lessons of the Korean experience for the comparative study of democratization, see "Drawing Lessons from the Korean Experience," pp. 311-319. 13. Ten days before his term was to end, outgoing President Kim Dae-Jung apologized for a scandal involving his government, authorizing a branch of the Hyundai Corporation to transfer nearly $200 million to North Korea, just a few days before the historic June 2000 summit in Pyongyang. This raised suspicions that his government had bought the summit, for which Kim won the 2001 Nobel Peace Prize. 14. Although the incoming president called for a political rather than a legal resolution of the scandal, the opposition GNP pressed for parliamentary investigation on the related charges of a $500 million illegal transfer of funds to North Korea that also involved the National Intelligence Agency ("S. Korean Leader Sorry for Summit Scandal," 2003). This probe led to the conviction of two high-ranking aides to former president Kim Dae-Jung. 15. Kim Hong-go! flew in from Los Angeles, where he had been a graduate student and researcher at an American university. He was to answer a summons about a widening scandal involving aides and relatives of the president and his wife, Lee Hee-ho. Mr. Kim's arrest followed the arrest of a prominent lobbyist and president of a sports lottery firm, Choi Kyu Sun. Prosecutors charged that Choi arranged the transfer of nearly U.S. $2 million in bribes (Kirk, 2002a: A-12). According to the court document Mr. Kim had received payoffs through Choi in the form of 66,000 shares-valued at U.S. $1,050,000---in Tiger Pools (a sports lottery). Choi had also sought his influence to win a contract to conduct a national sports lottery and offered U.S. $870,000 in separate bribes. In November Kim Hong-go! was convicted and sentenced to serve a two-year prison term with a three-year suspended sentence. 16. How far Roh Moo-Hyun would go to press former president Kim Dae-Jung to stand on trial on charges of "bribery" or even "sedition" was unclear. In the end Roh chose not to go along with the National Assembly probe of Kim on "bribery and corruption" charges. In so doing, Roh reversed the precedent of placing former presidents on public trial. 17. Exit polls released by MBC-TV also showed that among the voters in their twenties, 59.0 percent supported Roh, while 34.9 percent were for Lee. Also, among the voters in their thirties, 59.3 percent chose Roh and 34.2 percent Lee. Those in their forties were evenly divided, with 48.1 percent and 47.9 percent backing Roh and Lee, respectively. But Lee's approval ratings were higher, with 57.9 percent and 63.5 percent among voters in their fifties and sixties, respectively, while the comparable figures for Roh stood at 40.1 percent and 34.9 percent (1. Kim, 2002: 304-305). 18. In his inaugural address Roh Moo-Hyun accentuated a "policy for peace and prosperity on the Korean Peninsula." This policy objective will be based on four main principles: to resolve all pending issues through dialogue, to build mutual trust and uphold reciprocity, to seek active international cooperation (on the premise that South and North Korea are the two main players in inter-Korean relations), and to enhance transparency, participation, and party support (Roh, 2003). 19. The Constitutional Court, by a vote of five to four, ruled against the legality of the proposed national referendum. The issues at stake did not constitute a grave matter of economic emergency or national security, in the opinion of the court, that would necessitate the calling of a national referendum. The request for the court ruling was made by a former speaker of the National Assembly, Lee Man-sup. 20. The last time the parliament overrode a veto was in 1954, when then president Syngman Rhee dismissed a criminal procedure bill allowing the National Assembly to demand the release of a lawmaker in custody. Lawmakers said then that the enacted leg-

364 NOTES TO CHAPTERS 8 AND 9

islation was needed to prevent the government from exploiting judicial power to suppress the opposition. Before December 9, when the legislative session ended, the National Assembly was still to vote on a total of 1,205 bills, including the following year's budget bill ("S. Korea Opposition to End Boycott," 2003). A special legislative session was called in to dispose of these bills, including appropriations, and the sending of 3,000 combat troops to Iraq. 21. Has South Korea attained democratic consolidation? An answer to this question seems affirmative, because, from the new institutionalism perspective, "democracy is consolidated when it becomes self-enforcing, that is, when all the relevant political forces find it best to continue to submit their interests and values to the uncertain interplay of the institutions" (Prezeworski, 1991: 26). In South Korea, to paraphrase the same source, "a particular system of institutions (has) become the only game in town, when no one can imagine acting outside the democratic institutions, when all the losers want to do is to try again within the same institutions under which they have just lost" the elections.

Notes to Chapter 9 1. Toffler (1970: 460). 2. Zakaria (2003: 256). 3. Thomas Friedman ( 1999) has coined a "Golden Arches Theory of Conflict Prevention" by suggesting that no two countries that both have McDonalds have ever fought a war against each other (148). Amy Chua (2003), however, has written about the instances of backlash to globalization by noting that "exporting free market democracy breeds ethnic hatred and global instability" to countries where "market-dominant minorities" are in charge of the economy, like the Chinese in Southeast Asia (23), Croats in the former Yugoslavia, and "whites" in Latin America (39). The backlash to globalization has been less in East Asian Tiger economies, as Chua also noted (178), primarily due to the fact that these countries, like South Korea, have not had "market-dominant minority groups" in their national economies. Ethnic homogeneity, not diversity or pluralism, has been an aperion of Korean politics that, according to Henderson, has led to an upward draft in the politics of vortex (Henderson, 1968). 4. For a discussion of the activation of industrial working-class formation after 1945, and the emergence of civil-society activism in general, see Chapter 8. As for the agrarian origins of modernization and the transformation of rural Korea via commercialization of agriculture see Chapter 1. 5. Root (2002) also suggests a region wide commitment to accountability and transparency in a common institution that will help East Asia deal with the pressures for economic competition. The establishment of region wide standards of governance could be monitored within this regionwide framework for trade and investment (124-125). 6. According to this study by Prezeworski and his team, which was based on a total sample of 135 countries spanning a period of 4,318 country-years between 1950 and 1990, democratic regime endurance depended on the continuous presence of six prior conditions: (1) democracy, (2) affluence, (3) growth with moderate inflation, (4) declining inequality, (5) a favorable international climate, and (6) parliamentary institutions (Prezeworski eta!., 1996: 39). 7. As for the criticism of "flying geese formation" and "product-cycle market" theses, as applied to the regional political economy in Asia, see Cumings (1997: 327, 336--337). 8. This argument seems rather weak because, as Francis Fukuyama (1999) reminds us, values differ from country to country in Asia and Confucianism does not constitute the dominant cultural value in places like Indonesia or Malaysia. Even in the Confucian cultural zone of East Asia, Confucianism is likely to be interpreted differently in China, Korea,

NOTES TO CHAPTER 9 365 and Japan. Also, "values will almost never have a direct impact on action" but are mediated through political and economic institutions, as Fukuyama argues. Institutional designs rather than cultural difference, therefore, should be the primary concern of the reformist (Fukuyama, 1999: 1-2). 9. At the time of the interview in 1994, Lee Kwan Yew was senior minister and former prime minister of Singapore. The dominant theme of the Lee-Zakaria dialogue was the importance of culture and the difference between Confucianism and Western values. 10. Then a dissident, presidential candidate, and human rights activist in Korea, Kim Dae-Jung was seeking publicity and recognition at the time of his making a rebuttal to Lee Kwan Yew's conversation on "Culture is Destiny." 11. The North Korean nuclear program, Pyongyang insists, is for the peaceful purpose of generating electricity. However, this pretense finally gave way in June 2003. Pyongyang has indirectly admitted for the first time that its intention now would be to acquire nuclear weapon capability for the purpose of military defense and deterrence (Sanger, 2003). 12. Since Roh Moo-Hyun has been more a political maverick, he is unlikely to play the role as a successor to Kim Dae-Jung. Therefore, the Roh Moo-Hyun presidency will not be beholden to its predecessor, the Kim Dae-Jung administration. In 1991 Roh was a member of the Kim Young-Sam Party but switched his affiliation to the Kim Dae-Jung Party. Roh also made it known that he would found his own political party sooner than later. In much the same way, the Kim Young-Sam presidency was not beholden to its predecessor, the Roh Tae-Woo administration. 13. Pyongyang denied a U.S. State Department delegation claim that North Korea had admitted the existence of a highly enriched uranium program (Sanger, 2003). It added, however, that the DPRK had the "sovereign right to develop nuclear power for peaceful purposes" of generating electricity. 14. During the second session of six-party Beijing talks North Korea wanted the United States to know that it had nuclear weapons and had also completed reprocessing nuclear weapons-grade plutonium. If true, North Korea could produce five or six atomic bombs within six months or one year of time. North Korea's "nuclear breakout" strategy is aimed to exert pressure on the United States to negotiate a new nuclear agreement. The U.S. Bush administration strategy is to secure the dismantling (not freeze) of North Korea's plutonium and uranium-based nuclear programs (Niksch, 2003). 15. The so-called 386 generation is said to refer to a computer chip and to those young voters in their thirties, who were born in the I'960s and went to college and fought in the pro-democracy movement in the 1980s. This generation regards the United States less as the country that fought in the Korean War than as the country that backed military dictators in the years before the 1988 democratization (Onish, 2003). 16. "All politics is local." But external pressures (such as China's rise and fail as well as the factors of geopolitics) also matter in the Korean context, as proven so many times in the annals of diplomatic history. One study draws lessons of the causal linkage between Korea and the dynastic cycles in China in the historical past (H. Kim, 1994: 22-27). 17. During the third session of the six-party talks in Beijing in late June, the United States continued to insist upon the CVID (Comprehensive, Verifiable, Irreversible Dismantlement) policy stance on North Korea but also outlined a new "five corresponding measures" plan in return for a nuclear freeze by the DPRK. These include, according to Seoul's Foreign Ministry Web site, (1) heavy oil, (2) a provisional security guarantee, (3) longer-term energy aid, (4) direct talks about the lifting of economic sanctions and removing the DPRK from its list of terrorist states, and (5) retraining of nuclear scientists during a three-month "preparatory period" of dismantlement ("U.S. Offers 5-Point Proposal toN. Korea," Korea Times, July 13, 2004). The Bush administration is deeply divided over the negotiating stance to take toward

366 NOTES TO CHAPTER 9 AND EPILOGUE

North Korea. Because of the political uncertainty of the U.S. presidential election on November 3, the ultimate settlement of the nuclear issue is unlikely to take place until after a new U.S. administration takes office in January 2005, and the Kim Jong-11 regime of North Korea knows it well. 18. A recent study by Noland (2004) assigns a pivotal role to South Korea if North Korea's regime is to survive economic failure and adversity in the immediate future. In July 2002 Kim Jong-Il's North Korea introduced an economic reform policy but it is not doing as well as anticipated due to a variety of reasons. These include a dual-pricing strategy, limited market opening, aid-seeking behavior, and external constraints like the pending nuclear standoff and failed normalization of relations with Japan (46-57). Integration with and absorption by South Korea may be the only pathway open to North Korea economically in the long run, according to Noland (43-68). 19. The new party supported by Roh (called United New Party for Participatory Citizens) was able to recruit four additional new members as of December 1, 2003, increasing the number of Roh's party to 47 in the 273-seat parliament. For an analysis of Roh's dramatic call for a confidence vote on his performance through a referendum, as well as the parliamentary vote to override Roh's veto on the slush fund scandal probe, see Chapter 8. 20. The probe into President Roh's campaign funds continues as prosecutors indicted eight of his aides for suspicion of illegal fund-raising up to $5 million. His subsequent apology for disappointing the country with a scandal involving his close aides amounts to Roh's admission to the charges. Since Roh repeatedly had stated that he was willing to step down over his aides' misdeeds, this admission has made the Roh government weak and insecure. The country's domestic politics has also become uncertain and volatile as the new campaign season begins for the seventeenth National Assembly election in April2004 ("South Korea: Presidential Aides Charged," 2003). 21. Despite the recent report on scandals involving politicians, South Korea's Sixth Republic turning into an "illiberal democracy" (Zakaria, 2003) seems to be not on the horizon for the moment. Korea's new democracy-after a journey of more than sixteen years since the 1987 democratic opening-has proven itself to be a resilient and thriving system that is on its path toward democratic consolidation and institution building. The South Korean state, more than a type of "hybrid regime" (Diamond, 2002) or "delegative" democracy (O'Donnell, 1994), represents a type of "transformative" regime and "dynamic" post-Cold War era new democracy. Actually, South Korea is becoming a hybrid system of blending legacies of Confucian culture and ideals of modernization as reflected by liberal democracy and a capitalist market economy.

Notes to Epilogue 1. Three days before the election, Representative Chung Dong-young stepped down as the Uri Party's campaign chairman and also gave up his candidacy for an at-large parliamentary seat. Following the Uri Party's landslide victory, however, Chung continues to remain as its party chairman. An expectation is that he will probably return to the National Assembly by running in one of the by-elections to be held within the next six months to one year. As many as 60 successful candidates, according to the National Election Commission report, may be subject to investigation for possible violation of campaign laws in 2004. In the 2000 general election, as many as 15 lawmakers had their elections nullified or were forced to resign due to court proceedings and convictions of election irregularities. 2. The survey also revealed a higher cognition level of the voters: 42 percent answered that they knew "almost all" the names of candidates running for office in their districts, while 45.8 percent said that they knew the public pledges of the candidate they supported.

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Also, 54.8 percent of voters indicated that they were more concerned with the party the candidate belonged to than with the personal ability of the candidate (an improvement over 38.5 percent in an earlier survey). This survey had a 95 percent confidence interval with a 3.1 plus or minus percentage margin of error ("Large Voter Turnout Expected April 15: Survey," 2004). 3. The DLP has emerged as the third largest voting bloc within parliament, ahead of both the MDP and the ULD, by virtue of its capturing enough nationwide support votes to win eight at-large delegates, even if it was successful at winning only two electoral districts. DLP chairman Kwon Young-ghil was elected this time from an industrial district of Changwon City instead of the Ulsan City district four years ago. Along with two independents, Chung Mong-joon was elected as a member of National Unity 21, the political party that he himself founded. 4. The performance of the MDP, which held sixty-nine seats in the National Assembly but ended up with only nine seats, was taken as a crushing defeat. It remains to be seen whether the MDP will finally split or resurrect itself. MDP chairman Cho Soon-hyung announced his resignation after forming an emergency committee to call for a national caucus. The MDP was originally launched by President Kim Dae-Jung during the 2000 general election, but its roots can be traced as far back as the time of the ROK's founding in 1948. 5. North Korea's Foreign Ministry dismissed Cheney's disarmament appeal, calling him "a mentally deranged person steeped in the inveterate enmity" toward North Korea's communist system. Yet, on April 18, North Korea's reclusive leader Kim Jong-Illeft by train for a four-day visit to China to meet with Chinese leaders, including President Hu Jintao, to discuss the North's nuclear weapons program and appeal for economic assistance. This was Kim's third China trip, the first being in May 2000 and the second in January 2001, and it closely followed Dick Cheney's weeklong visits to Japan, China, and South Korea (Paul Eckert, "Report: North Korean Leader Heads to China for Talks," USA Today, April19, 2004, llA). Kim's earlier visits to China had not been announced in advance by either side and only came to light after the trips had ended and Kim was safely back in Pyongyang. An exchange of views between the two communist neighbors will help the third session of the Six-Party Beijing Talks on North Korea's nuclear program, which was planned for the summer of 2004.

Notes to Postscript 1. Yun refused to reveal who and how many were for or against the verdict, by stating that not releasing the minority opinion would be entirely proper, by citing article 36, clause 3, of the Constitutional Court law. The subsequent press report by other sources, however, indicated that the voting by the nine judges was split in terms of three in favor of impeachment, five against, and one in abstention. 2. A survey was conducted by the Uri Party's policy committee immediately after the election already revealed the potential for changes in foreign policy orientation. Among the 130 respondents of the successful candidates of the Uri Party, an overwhelming 63 percent said that China was likely to become Korea's next most important diplomatic and trading partner, whereas only 26 percent of the respondents said that the United States would be ("63 Percent of Uri Lawmakers Value China Over U.S.," Digital Chosunilbo, April 24, 2004). The Uri Party chose a new leader, Representative Shin Ki-Nam, a third-term veteran lawmaker who represents a key electoral district in Seoul.

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Index

Academic Organization Consultative Association, 95 Administrative reform, 112-113, 122 Agrarian society, pre-1945, 5-7 Agriculture commercialization of, 6 labor, 72, 272 land reform, 5, 47-48 market openings, 120, 139 urban migration and, 6-7, 272 Allison, Graham, 249-250 Amsden, Alice H., 50, 176, 185, 186, 189, 208 Analects of Confucius, The, 45,46 Anti-Americanism, xi, 339 APEC (Asia Pacific Economic Cooperation), 126, 153 Armstrong, Charles K., 163, 277, 278 ASEAN (Association of Southeast Asian Nations), 323 ASEM (Asia-Europe Meetings), 229 Asia Development Bank, 156, 159 Asia-Europe Meetings (ASEM), 229 Asian economic miracle, 185-186, 208, 319, 320-321 Asian financial crisis of 1997-1998, 11, 12, 150, 157-161, 169-170, 185, 190, 204, 222, 313 Asian model of industrialization, 221-223 Asian values, 319-324 Asia Pacific Economic Cooperation (APEC), 126, 153, 229, 246 Asset disclosure policy, 111, 112, 113 Association of Southeast Asian Nations (ASEAN), 323 Authoritarian state Chun Doo-Hwan regime, 77-79 civil-society groups in, 277

Authoritarian state (continued) Confucian values and, 322 economic development and, 50-51, 72-73, 98, 101 elections of, 14, 71 exclusionary nature of, 73 legacy of, 73-74 legitimacy problems of, 53, 72, 73, 78 military-dominated, 3, 71-73, 77-79 rectifying ills of, 117-118, 232 withdrawal of Fifth Republic, 79-82 See also Democracy movement; Democratic transition Bank for International Settlements (BIS), 188, 195-196 Bankruptcies, 127, 128, 157, 158, 198 Banks and banking restructuring of, 195-196 slush funds in, 129 structural problems in, 127, 188, 190 Beijing talks, 334-336 Berlin Declaration, 251 Borderless World, The (Ohmae), 163 Bretton Woods Agreement, 185 Buddhism, 34, 44, 47, 60 Bureaucracy. See Government bureaucracy Bureaucratic Authoritarian Industrializing Regime model, 222 Bush, George W., 251, 256, 258, 326, 328, 330, 333, 335, 336 Business bankruptcies in, 127, 128, 143, 157, 158 corp