Ideas, Networks, and Policy Change: Explaining Strategic Privatization in Korea

This paper analyzes the relationship between organizational changein the public sectors of an economy and the coordination traditionsof a society. Due to the financial crisis of 1997, many countries inAsia have shifted toward a market-driven economy and privateownership. However, each country selected a different path for theirprivatization policy and exhibited diverse capacities in pursuingeconomic reform. The specific case of South Korea, labeled a stateactivisteconomy, illustrates that the scope and scale of privatizations are strategically selected by the government, and that evenprivatized firms remain strongly influenced by the government. Inthis paper, we complement the literature by examining two relativelydisregarded factors in understanding the heterogeneous responseof each economy to privatization, i.e., the ideas of policy-makersand the policy networks between the state and business sectors.