Ideas, networks, and policy change: Explaining strategic privatization in Korea

This paper analyzes the relationship between organizational change in the public sectors of an economy and the coordination traditions of a society. Due to the financial crisis of 1997, many countries in Asia have shifted toward a market-driven economy and private ownership. However, each country selected a different path for their privatization policy and exhibited diverse capacities in pursuing economic reform. The specific case of South Korea, labeled a state-activist economy, illustrates that the scope and scale of privatizations are strategically selected by the government, and that even privatized firms remain strongly influenced by the government. In this paper, we complement the literature by examining two relatively disregarded factors in understanding the heterogeneous response of each economy to privatization, i.e., the ideas of policy-makers and the policy networks between the state and business sectors.