Korea has achieved a remarkably high level of economic growth over the last thirty years. Its economic development process during this period has generally been described as following a government-led export promotion strategy. The government has been actively involved in almost every important aspect of economy related decision-making and the private sector has followed the signals given by the government. The government-led order has always taken precedence over the spontaneous market order.
In the context of the optimal utilization of economic resources, the economic development process usually entails two interrelated aspects of resource utilization the mobilization and the allocation of economic resources.
Very little attention has been paid to the possible side-effects of emphasizing the active role of government in resource mobilization The mobilization drive has tended to create a detrimental environment for macroeconomic management. In general, once priority is given to domestic resource mobilization, monetary and fiscal policies will also tend to be 'mobilized as the instrument to support economic development, thereby making the role of macroeconomic stabilization inoperative. Low interest rates, base money creation, and tax-and-expenditure instruments all tend to be utilized to support policy loans for import ant industries. The search for the best methods of mobilizing available resources to support economic development becomes the dominant concern to the detriment of macroeconomic stability.