The Evolution of the Chaebols: The Property Rights System and Economic Organization in Korea

Having taken a close look at Korea’s macroeconomic policy environment in the previous chapter, we will now consider some microeconomic features peculiar to the Korean economy. Arguably the most influential of these are the Korean conglomerates, known in Korea as chaebols. The purpose of this chapter is to apply the new-institutional economic approach to issues regarding the chaebols, as well as to a number of controversial issues concerning the Korean economy as a whole. Specifically, we seek to emphasize the pivotal role of a country’s property rights system in determining the nature of economic behavior and organization. From these discussions, we draw some lessons to be learned in charting the future course of institutional reforms for the sustainable development of Korea’s economy.