moves toward inclusive economic institutions when they are
fairly certain that this will not threaten their political power.
Alternatively, the historical situation could be such as to
endow an extractive political regime with rather inclusive
economic institutions, which they decide not to block.
These provide the second way in which growth can take
place under extractive political institutions.
The rapid industrialization of South Korea under General
Park is an example. Park came to power via a military
coup in 1961, but he did so in a society heavily supported
by the United States and with an economy where economic
institutions were essentially inclusive. Though Park’s
regime was authoritarian, it felt secure enough to promote
economic growth, and in fact did so very actively—perhaps
partly because the regime was not directly supported by
extractive economic institutions. Differently from the Soviet
Union and most other cases of growth under extractive
institutions, South Korea transitioned from extractive
political institutions toward inclusive political institutions in
the 1980s. This successful transition was due to a
confluence of factors.
By the 1970s, economic institutions in South Korea had
become sufficiently inclusive that they reduced one of the
strong rationales for extractive political institutions—the
economic elite had little to gain from their own or the
military’s dominance of politics. The relative equality of
income in South Korea also meant that the elite had less to
fear from pluralism and democracy. The key influence of the
United States, particularly given the threat from North
Korea, also meant that the strong democracy movement
that challenged the military dictatorship could not be
repressed for long. Though General Park’s assassination
in 1979 was followed by another military coup, led by Chun
Doo-hwan, Chun’s chosen successor, Roh Tae-woo,
initiated a process of political reforms that led to the
consolidation of a pluralistic democracy after 1992. Of
course, no transition of this sort took place in the Soviet
Union. In consequence, Soviet growth ran out of steam, and
the economy began to collapse in the 1980s and then
totally fell apart in the 1990s.
Chinese economic growth today also has several
commonalities with both the Soviet and South Korean