Corruption in the Korean government
The military-backed regimes had virtually unchecked power. Under
authoritarian rule, the chaebol were coerced by the government to contribute
regularly to privately established foundations, which existed in the
administrations of Park Chung-Hee of the Third Republic, up to Roh Tae-
Woo of the Sixth Republic.8 Those businesses which refused were punished
and encountered difficulties when applying for loans and licences.
The public outcry against the military’s political influence led to the
adoption of a democratic system of government in 1993. However, the
need to acquire campaign funds for political candidates and the low
salaries of public officials increased the amount of corruption. As politicians
needed funding to win elections, they accepted large sums of illegal
contributions from the chaebol, who in return were given major government
procurement contracts by the government. As the chaebol increased
their business profits from these government contracts, it gave them even
more financial power to influence elections and government policymaking.
The introduction of a democratic system in Korea still gave a significant
amount of control of the legal, law enforcement, tax, and financial systems
to the President. The President appoints all the Korean ministries and
regional and local officials are appointed by the central government, which
gives the President overall control from the national to the local levels of
government. The South Korean economy, a product of governmentsponsored
economic plans, is also highly regulated by the government.
Thus, the majority of business transactions require government permits
and licences. Furthermore, government ministries without the approval of
the legislative branch can change the rules and regulations on business and
commerce.9
This centralized system required businesses to lobby the administration
in order to receive favourable treatment by government officials, thereby
fuelling a corrupt relationship between the government and private business.
In exchange for commerce and business regulations being altered in