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How Did Turkey and South Korea Achieve Different Levels of Development?


Istanbul, Turkey



Seoul, South Korea

Objective of the Article


Why do some states develop, while others do not?

This is a very dominant question in development studies which does not have one universal answer, although many theories have been put forth by various scholars. For example, some would argue that historical reasons such as colonial legacies , which are affected by geographical factors (Engerman,Sokoloff 1994), were the main reasons for failed development attempts in countries. Others would argue that institutional differences between nations are the main cause for different development paths between different states (Acemoglu, Johnson and Robinson 2002). There are even some who claim that infighting between elites within a nation is what really hampers the development attempts of the country (Waldner 2018). Although all of these arguments have valid points to explain the difference in development paths of countries, this article will focus on a different explanation for the divergence of development, that has happened and is happening right now. This explanation is the policy differences across governments. To validate this argument, comparisons of Turkey and South Korea will be used. Even though at the surface these countries didn’t have much in common, they actually had very similar circumstances at the beginning of their nationhood, from their economic situation to their allies and geopolitical importance, Turkey and Korea had a lot of similarities. This begs the question, why did Korea develop so successfully while Turkey couldn’t. This article will first focus on the similarities between these countries and how these similarities disprove some other theories for differences in development. Then it will focus on differences and explain, why their effect on differences of development is minimum. Lastly it will draw a final conclusion, as to why Korea developed more than Turkey.



Similarities


Both South Korea and Turkey were allies of the USA during the Cold War. They bordered socialist countries such as North Korea and the Soviet Union respectively.


Their geopolitical situation made them valuable to the USA and therefore they were financially supported and highly influenced by the super power. (Üstün, 1997) ( Click here for more information​).

The fact that Turkey benefited from the Marshall Plan even though it did not suffer during the WW2, and South Korea got most of the capital that was needed to rebuild the country after the Korean War from US, are clear evidences for this. Both had totalitarian regimes initially, that tried to achieve development (Aydin, 2005). Both of them lack natural resources like oil or gas, which helped many Middle Eastern countries financially. Education in both of these countries was very weak initially. Evidences for this is the literacy rate of these countries had at the early stage of their nationhood. (Gök, n.d.)



Differences


Although South Korea and Turkey had a lot of similarities, some clear differences also existed between these two countries. These differences have been used by some to explain the different outcomes in their developmental path. Their different history, which includes their religious background, culture, and traditions, for example, has been used by the likes of Acemoglu, Johnson and Robinson as an explanation for different development outcomes in these two countries, as they caused different institutions. Even though this argument has some validation for explaining why some countries develop differently, it has some shortcomings. For example, different developmental outcomes in North and South Korea cannot be explained by their cultural and historical differences, as these countries were one country until World War II. The fault cannot go to communism and the institutions it has created either. China, which was also a communist country that had a similar Confucian culture to Korea, developed far better than North Korea, even though they were not as successful as South Korea. This does not mean that institutions do not matter or that historical backgrounds do not affect institutions. However, it does mean, that institutions are not set in stone and they can be changed and influenced by the policies of the governments



Policies implemented by Turkey and South Korea


Turkey


Turkish governments used populist policies to stay in power, which hurt their ability to develop For example, the public sector in Turkey from 1960s to 1980s heavily relied on labour intensive production rather than usage of machines. The reason for this is the regimes needed support from interest groups, such as factory workers, to stay in power. Less support for mechanisation also hampered educational progress in these areas. Turkish governments also didn’t want to alienate its rural population and therefore they reversed their policy of exporting agricultural goods to collect the capital needed for industrialisation, which they enacted from 1950 to 1953, as it was creating inflationary pressure. This also made Turkey less reliant on export orientated industrialisation, as exports seemed too dangerous because of inflationary pressures. Turkey also started to buy domestic produced agricultural goods above market price to further please the rural population. This caused inefficiency, because farmers knew government would buy anything they would produce. The result was low quality products which were inadequate for exportation. An example for this is tea production at Black Sea region of Turkey in 1970s, where farmers produced over the demand, but because they were low quality goods for exportation the extra goods were thrown to the sea. Another thing that hampered the Turkish objective of development is the lack of meaningful intervention in the credit market, which made banks loan to commercial firms instead of industrial ones, as there were more existing profit opportunities in commercial markets. This hurt the industrialisation process.


South Korea


The South Korean government after 1960s used less populist policies compared to their Turkish counterparts. For example, president Park Chung Hee, who came to power after his coup in 1961, threatened chaebol (big businesses) with persecutıon, as they were using their immense profit to create a monopoly in the country. However, he never really moved against them. However, his threats were enough to change them from rent seeking inefficient organisations to world class manufacturers. Park also used populist measures in agricultural production like subsidizing fertilizers and helping farmers to get easy credit from 1961 to 1963. However, after he consolidated his power he slowly backtracked from these policies, which were encouraging inefficiency. South Korea also focused on export orientated industrialisation, as it brought foreign capital to further improve industrialisation in the country. South Korea also heavily improved the education system and heavily financed education, which made them competitive in foreign markets, as South Korean industries became very efficient.


Conclusion


Waldner’s argument about the elite conflict as the reason for low development in Turkey is based on the government’s bad policies, which Waldner argues were implemented because of the elite conflict itself. This argument is somewhat valid, however it does not really explain why elite conflicts occur and he does not seem to think government policies are the reason for these conflicts in the first place. For example, the reforms and policies, that Ataturk and his successors (Kemalists) enacted were the main cause for elite conflict, because it alienated a part of the population from the government. However, in Korea after the 1960 coup alienation of a certain part of the population has been minimised and therefore elites were more united in their actions (Waldner 2018). The Divergence in their development also starts at this point in time. Even though there was the unification of elites, the rivalry between North and South Korea played an important role, because support for communism became less accepted in the Korean society compared to Turkish society and its struggle between secular and religious ideas.



Reference List


Andrea Matles Savada and William Shaw, editors. ‘’South Korea: A Country Study’’. Washington: GPO for the Library of Congress, 1990


Nadir Altinok, Claude Diebolt & Jean-Luc Demeulemeester (2014) – A new international database on education quality: 1965–2010. In Applied Economics, 46:11, 1212-1247, DOI: 10.1080/00036846.2013.868592


Engerman, S. and Sokoloff, K. (1994). Factor Endowments. Cambridge, Mass.: National Bureau of Economic Research


Acemoglu, D., Johnson, S. and Robinson, J. (2002). The Rise of Europe. Cambridge, Mass: National Bureau of Economic Research.


Waldner, D. (2018). State Building and Late Development. Ithaca: Cornell University Press.


Üstün, S. (1997). Turkey and the Marshall Plan


Aydin, Z. (2005). The political economy of Turkey. London: Pluto


Gök, F. (n.d.). Educational change and politics in Turkey 1946-1971

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