Journal of Business & Economic Policy

The Heavy-Chemical Industrialization Policy Reevaluation in Korea from the Perspective of the “General Theory of Economic Development”
Dr. Jwa Sung-Hee, Prof. Dr. Lee Sung-Kyu

Abstract
The purpose of this study is to call attention to the distorted view of mainstream economic circles towards Korea‟s past heavy-chemical industrialization policy, which was the leading national industrial policy of the country, based on a new economic development theory, and then to demonstrate that it was a successful market-friendly industrial policy. On the basis of the “General Theory of Economic Development”, this study particularly intends to re-identify the economic policy paradigm of the Park Chung-hee era as a “heavy-chemical industrialization strategy”, rather than as an “export-led growth strategy” as considered by mainstream economic circles. To this end, this study suggests the necessity of a new interpretation of Korea‟s industrialization process as it examines the actual implementation process of the policy. This study also explains “the holy trinity of economic development”, that is, the market, corporation, and government, in line with the General Theory of Economic Development. To this end, this study examines the major criticisms of the heavy-chemical industrialization policy, and reevaluates the policy from the viewpoint of the General Theory of Economic Development. Based on the results of the above analysis, this study drew the following three conclusions. First, the success of the heavy-chemical industrialization strategy ultimately contributed to the accomplishment of the industrial revolution in Korea by elevating and developing the Korean economy from a „carriage manufacturing economy‟ into an „automobile manufacturing economy‟. Second, Korea‟s economic development was led by the growth of corporations, and thus, by the paradigm of the corporate contribution to the national prosperity and development. Finally, the industrial policy of government-controlled economic discrimination has contributed to the successful industrialization of Korea.

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