Developmentalism in Korea: A Useful Tool for Explaining the Role of Social Security in the Reduction of Poverty and Inequality

다국어 초록 (Multilingual Abstract)

It is conventional wisdom that universalism is more effective than selectivism in addressing theproblems of poverty and inequality. In providing income security for the elderly, retirementpensions calculated on the principle of social insurance represent universalism and social assistancebenefits on the basis of means-test selectivism. Korea has both a contributory pensionscheme and social assistance program for the elderly. The social assistance began in 1961. Thecontributory scheme, the National Pension, started belatedly in 1988 and its coverageexpanded to the entire population in 1999. We can, therefore, expect that the social securitysystem, especially the universal pension scheme based on social insurance, has some positiveimpacts on the reduction of poverty and inequality. This paper, however, raises doubt as tothe conventional wisdom and thus reviews the developmental process of the Korean socialsecurity system for the aged. It was found that the dominant ideological controversy revolved,not around universalism versus selectivism, but around the option between developmentalismand other strategies. Our empirical analysis showed that the public pension had little impacton the reduction of poverty and inequality, particularly in comparison with advanced welfarestates. This is not surprising at all, since poverty eradication and redistribution were not majorobjectives of the Korean social security system. The controversy between universalism andselectivism was relatively unfamiliar in the policy process of the Korean social security system.
Even though the redistributive effect is getting larger as the National Pension system becomesmature, the developmentalist model has been proved to be a more useful tool for explainingthe limited role of Korean social security.

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