ABSTRACT
This chapter investigates the growth of both sectors in relation to the growth of economic factors and their policy measures. It examines the change in the relative shares between the two sectors in the course of Korea’s economic development. In the literature of economic development theory, it is generally believed that a revolution in agricultural productivity must precede entry into industrial development. Korea’s development experience, however, provides little evidence for this conventional theory. Korea’s economic development was much more industrially export-oriented, while Taiwan experienced more of an agriculturally oriented development. The increase in agricultural productivity can be accomplished through technological changes in the form of improved techniques and cultivation practices. The government attempted to maintain the consumer price at a level lower than producer support prices. Korea has a long history of absentee landlords, where tenant farmers suffered from feudalistic landlords. Thus, Korea’s economy was forced to raise industrial wages relatively faster and earlier than usual.
