Financialization and Industrial Policies in Japan and Korea Evolving Complementarities and Loss of Institutional Capabilities

CEAFJP Discussion Paper Series 16-02

45 Pages Posted: 27 Mar 2018

See all articles by Sebastien Lechevalier

Sebastien Lechevalier

Ecole des Hautes Etudes en Sciences Sociales (EHESS)

Pauline Debanes

Ecole des Hautes Etudes en Sciences Sociales (EHESS)

Wonkyu Shin

Institute of Economics and Business, Ilias State University (ISU); Center for International Development Cooperation, Kyung Hee University

Date Written: March 22, 2018

Abstract

The purpose of this article is to analyze the revival of industrial policies from the late 2000s in Japan and Korea and their limitations. Our approach has two major characteristics. First, we adopt the perspective of historical institutionalism to focus on the relation between IPs and financial systems and study their evolution over the last 40 years. Second, by mobilizing the concepts of institutional complementarities and hierarchy, we discuss the limits of this revival in a context of liberalized financial systems, to which IPs have contributed. Our major result is that, in the context of financialization, past complementarities of the developmental state have weakened and contradictions have arisen. It resulted in a restructuration of state capabilities to design and implement IPs, and to its inability to subordinate finance to its goals, despite the discourses and ambitions of governments. However, and this is our second result, comparison between Japan and Korea also allows us to identify some significant differences that may explain diverging trends in terms of the deindustrialization and internationalization of these two economies.

Suggested Citation

Lechevalier, Sebastien and Debanes, Pauline and Shin, Wonkyu, Financialization and Industrial Policies in Japan and Korea Evolving Complementarities and Loss of Institutional Capabilities (March 22, 2018). CEAFJP Discussion Paper Series 16-02, Available at SSRN: https://ssrn.com/abstract=3146968 or http://dx.doi.org/10.2139/ssrn.3146968

Sebastien Lechevalier (Contact Author)

Ecole des Hautes Etudes en Sciences Sociales (EHESS) ( email )

54, boulevard Raspail
Paris, 75006
France

HOME PAGE: http://https://sebastienlechevalier.wordpress.com/

Pauline Debanes

Ecole des Hautes Etudes en Sciences Sociales (EHESS)

54, boulevard Raspail
Paris, 75006
France

Wonkyu Shin

Institute of Economics and Business, Ilias State University (ISU) ( email )

Kakutsa Cholokashvili Ave 3/5
Tbilisi, 0162
Georgia

HOME PAGE: http://beri.iliauni.edu.ge/researchers/

Center for International Development Cooperation, Kyung Hee University ( email )

Dongdaemun-ku
Seoul, Gyeonggi-Do 446-701
Korea, Republic of (South Korea)
82-2-961-9193 (Phone)
82-2967-6931 (Fax)

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