ABSTRACT
Korea (South Korea) is in the midst of a transition from systemic informality to systemic formality. In recent times, twin disjunctions in Korea – the financial crisis in 1997 and the political crisis in 2016 – have given a grim reminder that this much talked about systemic transition still faces serious bottlenecks. Based on an analysis of the ongoing structural shift in the system, this chapter makes two central arguments: (1) economic forces in Korea led by family-owned conglomerates and activated by conservative polity are pushing to maintain a level of informality in the system to reconnect the pipeline that once supplied subsidized credit, favourable tax breaks and other administrative support, and (2) social forces led by civil society and activated by progressive polity are clamouring for a formal, highly accountable and transparent system capable of ensuring equitable, efficient and rule-based economic order. Methods and mechanisms that Korea uses to reconcile the two competing socio-economic forces may decide the dynamics of its business environment.
