Transferring the Anglo American system to Korea: at what cost, and are there alternatives?

The Anglo American economic model, together with its corporate governance practices, is frequently regarded as the optimal instrument for achieving competitiveness and enhancing investor confidence, even by countries which do not share the culture and tradition from which it originated. Its corporate governance structures, shareholder friendly laws and liquid capital markets with high levels of disclosure are regarded as mechanisms which can enable ‘global’ standards of efficiency, transparency and accountability to be achieved. Many countries outside of the US and UK are encouraged by the international financial community to attract foreign business and investment by emulating this model. But to what extent is this model suitable for countries outside of those in which it was developed?
This article examines this issue in relation to South Korea, an economy traditionally based on a state-led developmental model, but which has since the 1990s, experimented with the Anglo American model. Whilst many academics support the implementation of the Anglo American economic system on the basis that it will enable its economy to be competitive, others have counted the significant costs post implementation and have proposed alternative paths to economic growth. Some have gone so far as to suggest that the government should reject the Anglo American system altogether and instead, modernise the traditional state-guided growth model. This article argues that Korean policy makers need not adopt the Anglo American model wholesale, but can create an optimal environment for growth by combining the strengths of its traditional economic model with those under the Anglo American system.