ABSTRACT

There are several explanations on the determinants of liberalization. For example, it is argued that liberalization occurs as internationalists led by competitive export-oriented sectors gain political strength vis-a-vis nationalists (Frieden, 1991 ; Frieden and Rogowski , 1996; Milner, 1988), but this formulation has difficulty in demonstrating how to overcome collective action problems. When the benefits of liberalization are dispersed and the costs concentrated, the potential beneficiaries of liberalization are not willing to bear the costs; that is, interests and preferences often do not correspond. In this case, only the government-if insulated from societal pressure-may proceed with liberalization. Moreover, in the case of Korea, its unique industrial structure makes it difficult to identify sectoral interests. Because big conglomerates in Korea, known as chaebol, are highly diversified and involved in both export-oriented and import-competing industries, there is no evidence that export-oriented sectors favored liberalization.