Paper short abstract:

The study compares industrial policymaking in the 1970s and late-2000s Korea to trace the change in business elites' exercising power in industrial policy. It is the information monopoly from their dominant position in production that enables business elites to partake in agenda-setting today.

Paper long abstract:

In the last 60 years since the first development plan in 1962, many studies on the Korean industrial policy took a state-centric perspective placing business elites merely as a supplementary partner or an axis of corruption hindering rational policy. While technocrats and pilot agencies are still important, the role of the private sector has long been emphasised in a specialised, globalised, therefore, ever-complex industrial ecosystem. Meanwhile, democratic consolidation along with economic development has made policymaking more transparent and effective to check cronyism and money politics prevalent in the past. Despite changes in the institutional environment, the influence of big businesses, or chaebol, continues to place the sectors and technologies of their interests at the core of the recent policies. This study compares the policymaking of the heavy/chemical industry in the 1970s and of the new growth engines including green cars (electric vehicles) during the Lee Myung-bak administration (2008-2012). The qualitatively different influence of business elites, namely, from instrumental to structural power, appears 1) in their distance to policymaking (indirect to direct participation), 2) in their participation in agenda-setting not only policy formation and implementation, and 3) from the fact that the source of power is big businesses' dominant and monopsonist position in the production structure that systemically monopolise capital and industrial information which relates to growth and job creation in the country. The review of the business elites' power in this study suggests an impact of industrial development on changes in the political landscape, particularly elite politics.