State–Chaebol relations in the post-crisis period

This article examines contemporary Korean capitalism via an analysis of state-chaebol relations in the post-crisis period. The Korean state played a prominent role in industrial and financial restructuring after the crisis. Some scholars argue that a 'new' state has emerged in Korea, with the activism during the financial crisis representing only a temporary diversion from the shift towards a 'competition state'. Others claim that the Korean state still seeks to directly shape economic outcomes: some policy instruments have changed, but strategic intent, defined here as the will to directly manage investment flows and shape economic structures, has not. The transition of Korean capitalism from the developmental state system towards neo-liberalism, this article argues, is far from complete. Emphasizing the situated choices of state elites and the challenging political context in which they find themselves, we presume a condition of mutual dependence between the state and chaebols. Given incidences of conflict in the post-crisis context, we argue that the state has not fully reasserted its will over the chaebols. The restructuring of chaebols ('Big Deals') are best understood as symbolic measures intended to garner external support for the Korean state rather than unfettered exercise of strategic intent. At the same time, we go beyond existing accounts of 'state decline' by highlighting the place of economic performance by the chaebols as the preeminent criteria for state support. The state and chaebols remain central to Korean capitalism, even in its current hybrid and somewhat dysfunctional form.<br />