Recognizing that the debate is reduced to the issue of market failure versus government failure, the key point of this chapter is that market failure another most cases is the reflection of institutional failure-another form of government failure. Korea's experience suggests that the inter-vention into endogenous decision variables has created many problems. This is because the believed informational superiority of the government was no longer valid in the handling of a sizable, complex structure such as the Korean economy. Based on the lessons of the Korean experience, our contention is that the role of the government should be confined to preserving the spontaneity and endogeneity of the market order and to cultivating a better economic environment for the smooth operation of the free market. We have tried to provide a philosophical underpinning for this type of government in economic management, derived from the oriental philosophy of Taoism with the central theme of “being natural without coercion”. The government should determine exogenous variables for the market order while the determination of endogenous variables should be left to market competition, especially under the conditions of globalization which will make government intervention virtually ineffective.