chapter  2
The travails of state building and institutional arrangement for development
WithSeung-hun Chun
Pages 14

For 12 years, the newly born South Korea had to suffer from social conflict and disorder in the process of state building under a democratic mandate. The military junta staked its claim to power on a mandate for national unity and poverty elimination. To begin with, the regime made administrative reforms to create a favorable environment for policy implementation. To eliminate social disorder, it established a police state that concentrated power in the president. Within the framework of a market economy, it established a planning and policy coordination body, the Economic Planning Board (EPB), which carried out development planning, national budgeting and management of foreign capital. A series of Five-Year Development Plans was promulgated to provide medium-term blueprints. The president assumed the role of general commander and the deputy prime minister and minister of the EPB took up the role of field commander in the campaign for economic development. Think tanks were established to support policy formation and technological development, and a monitoring system was created to check policy implementation. To bring allocation of financial resources in line with development policy, the banking system was put under the government’s influence.