POLITICAL CHOICES AND Economic outcome
POLITICAL CHOICES ANDECONOMIC OUTCOMES
A Perspective on the Differential
Impact of the Financial Crisis
on South Korea and Taiwan
UK HEO
University of Wisconsin-Milwaukee
ALEXANDER C. TAN
University of North Texas
South Korea and Taiwan have gone through similar experience of political and economic development
in the past several decades. Both countries have achieved miraculous economic developments
under the government-led development paradigm and have gone through democratization
process in the 1990s. Despite the similarity in developing history, the 1997 financial crisis experiences
are quite different between the two countries. South Korea was hit hard by the crisis,
whereas the crisis barely touched Taiwan. What caused the difference? The authors argue that
the difference in the impacts of the crisis and the resulting outcomes on SouthKorea and Taiwan
is a result of existing political and economic institutions and structures and the choices that were
made within those institutions. They support this argument by using institutional explanation,
such as growth strategy, market liberalization, and political development.
Keywords: Asian financial crisis; Taiwan;Korea; political institutions; financial liberalization
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