Long-term Changes in the Extractive and Redistributive Capacity of the South Korean State, 1965-2017: An Analysis of the Tax Revenue, Tax Structure, and Tax-Welfare Complex Using the Methodology of Ideal Type
Korea Social Policy Review
DOI : 10.17000/kspr.27.2.202006.93
Korean Association of Social Policy
Research Area :
Medical / Welfare / Social policy
In South Korea, a developmental state of low-tax and low-welfare systems with regressive tax structure depending on consumption tax has been established during the period of authoritarian rule, and many previous studies have emphasized that a large part of such characteristics continued up to date. To examine the long-term changes as well as the continuity of historical legacies of the tax-welfare complex of the South Korean state, this study analyzed the trend from the 1960s to the 2010s in comparison with OECD member countries, using tax revenue, tax structure, and welfare expenditure as key indicators. Methodologically, this study took a historical-comparative approach using ideological type to interpret the case of South Korea as a specific form of combination, proximity, and deviance in relation to the social democratic, continental European, liberal, and developmental regime types. The results of analysis showed that the legacy of the regressive developmental state continues, but has undergone considerable quantitative and qualitative changes. The tax revenue started to leap from the late 1980s, and the welfare expenditure started to leap from the late 1990s, and since then they have grown the most rapidly and persistently among the OECD member countries. Regarding the tax structure, the increase of income tax and social insurance contribution are contrasted with the decrease of consumption tax. While the characteristics of low-tax and low-welfare system continue from the international standard, the South Korean state experienced a significant change toward a hybrid welfare state in which the institutional legacies of the developmental state like the tax expenditure, the characteristics of the liberal type centered on income tax and those of the continental European type centered on social insurance contributions coexist. Discussions on new structural problems and policy responses corresponding to these changes are expected to become more important in the future.