Deregulation and Economic Reform in Korea

In its all-out push for export-led growth, the Korean government increasingly came to rely on direct control of the economy. Among the undesirable legacies of this largely successful effort are inflation, the dominance of large conglomerates, an underdeveloped financial sector, inefficient allocation of resources, and the inevitable corruption that arises from overregulation and the overconcentration of power. Efforts to improve efficiency and competitiveness by simply deregulating the economy are likely to exacerbate rather than correct these structural imbalances. A more comprehensive, longterm reform program is needed.