ABSTRACT
This chapter suggests that beginning in 1979 a fundamental difference of view emerged within the Korean state between those top policy makers who advocated a free market approach and those working level bureaucrats were unwilling to relinquish the managing role. The General Chun Doo Hwan came to power, a significant movement is already underway to abandon the highly interventionist policies which had characterised of the heavy and chemical industry drive. The government hopes that the combined effect of the reforms will to stimulate a sluggish economy by financing investment more effectively and to stabilise the nations' balance of payments position by relying more on foreign capital inducement through foreign direct investment rather than foreign loans. Bureaucratic capacity during the Park era had hinged upon the wide acceptance of a developmental ideology which placed a strong emphasis on the role of the state in guiding and directing economic activity even to the level of the individual firm.
