Conversely, the mechanism of paying deferred compensation defined the
relationship between democratization and globalization, and made it possible to better
explain Korea’s economic downturn from the effects of the double advent.
Democratization destabilized deferred compensation, and the deteriorating compensation
in turn downed Korea’s bureaucratic capacity to transform the economy. Globalization
failed to adapt the Korean economy to a liberal economy with ease and stability, resulting
in the financial fiasco of 1997. Democratization and globalization stood at odds with each
other when they passed through the bureaucracy. The double pursuit of political
liberalization and top-down economic liberalization proved incompatible in Korea.
Finally, this paper presented two critical cases to testify to the importance of
bureaucratic deterioration in Korea’s economic outcomes. Bureaucratic policy failures in
both the 1993 and 1997 projects were fatal to the success of Korea’s financial reform
efforts, leading to the 1997 financial crisis. Whereas most existing studies on the 1997
crisis treated the unsuccessful outcomes in both policy projects as political failure, i.e.,
corruption or crony capitalism, this study interpreted it as the low policy capacity of the
bureaucracy to handle the project with the same efficiency and autonomy that it used to
have.
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Convention