Divergent Evolution of Statist Coordination Models: A Comparison of Japan and Korea

By examining the different patterns of policy-making, this chapter investigates the divergent evolution of statist coordination capitalism in Japan and South Korea. Since the 2008 global financial crisis, along with the escalation of U.S.–China rivalry and intensifying technological competition, the traditional state-led industrial policies of both countries have attracted renewed scholarly attention. For institutionalists and culturalists, Japan and South Korea represent critical cases that challenge neoliberal convergence arguments in the era of globalization and the digital revolution, demonstrating the persistence of national diversity. Yet existing approaches still fall short in explaining the diverging trajectories of the two economies in terms of economic performance and reform politics since the 1990s. Despite sharing a broadly similar statist coordination model—distinguished from both the free-market model of the United States and the social coordination model of Germany—the recent evolution of Japan and South Korea reveals significant differences: Japan has experienced prolonged stagnation and institutional inertia, whereas South Korea has shown comparatively greater flexibility in adapting to globalization and digitalization. Focusing on their differing policy regimes, we highlight that although the two countries maintain similar institutional frameworks and policy practices, the way these systems operate in practice diverges: Japan relies on a consensus-based state–bureaucracy–business model, while South Korea employs a presidentially driven hierarchical model. This comparative perspective not only clarifies the backgrounds of their different developmental paths but also offers insights into the respective strengths and weaknesses of the two statist coordination models.