Broadly speaking, the Korean government has actively participated in resource mobilization, even though the degree of participation has fluctuated during the development period according to the situation faced by the country. In the course of these developments, Korea evolved a very peculiar management pattern. While macroeconomic the economy was subject to inflationary pressure stemming from the base money and credit expansion and the low official rates geared towards maximum mobilization of investment funds, conventional monetary policy instruments such as control of the money supply and Interest rate policy became inoperative, Direct controls on individual prices, important for the CPI basket and even to economic activities within the private realm, became widely utilized as the instruments for maintaining macroeconomic stability. In sum, macro macroeconomic policy function was performed by micro regulations.
On the other hand, the Korean government resource allocation through discriminatory policies the microeconomic such as favoring certain sectors and groups of economic agents. The controlled the financial resource allocation by regulating government interest rates and the lending activities of financial institutions. In the earlier stage of development - until the late 1970s - the large business groups and heavy and chemical Industry sector were favored, but since the 1980s, small and medium-sized firms have been relatively favored.
Instead of allowing market competition freely rein as a kind of discovery procedure, the government has assumed the responsibility of making important allocation decisions. The government has determined the sectors the conglomerates can engage in, and stipulated that the financial institutions can lend only to selected businesses. This pattern of direct intervention in private decision areas has improved process in recent years, but has somewhat through the liberalization generated far-reaching and long-lasting interventionistic mind-set of the policy makers regarding the role of the market.