institutional sibling) are unable to properly explain why Korea’s once-performing state
sharply deteriorated during the 1990s.
Second, democratization theories became refined toward a better diagnosis of
corruption, the central part of Korea’s negative democratization effects. Several chaebol
scandals swept through Korea’s political economy immediately before the 1997 crisis.
Hanbo and Kia, the two major financial scandals, radically pulled down the credibility of
the economy and caused the withdrawal of foreign capital. Initially, efforts to disentangle
the unprecedented corruption scandals paid attention to the “political uncertainty” that
democratization had brought.
Private firms, chaebols in particular, channeled black
monies to key political figures or bribed high-level governmental officials to make their
business futures certain when everything turned uncertain in the advent of
democratization. Put differently, corruption was largely understood as “insurance”
bought by private firms against political uncertainty.
Soon, however, analysts testified
that such political-business trades had been practiced for a long time and were not limited
to the 1990s. Challenged by the fact that the whole Korean political history was plagued
by bribes and corruption, democratization researchers had to turn their eyes to the issue
of controlling corruption and sought for an answer as to why corruption suddenly went
out of control in the 1990s.
Two kinds of theoretical refinement were made to get closer to the causes of
deteriorating management of political financing. One attributed Korea’s structural
degeneration to “money politics” while the other argued for transitory instability.
11
The theoretical framework was developed in, Adam Przeworski, Democracy and Market: Political and
Economic Reforms in Eastern Europe and Latin America (New York: Cambridge University Press,
1991).
12
Meredith Woo-Cummings, Race to Shift: State and Finance in Korean Industrialization (New York:
Cambridge University Press, 1991), Eun Mee Kim, Big Business, Strong State: Collusion and Conflict
in South Korean Development 1960-1990 (Albany: State University of New York Press 1997).
9
Convention