Since the 1990s, there are two extreme opinions between compressed growth and neoliberal transformation in the studies on welfare state development in Korea. In order to verify both extreme arguments, this study in which the development of public pension system is analyzed raises the following questions; First, how reforms in National Pension Scheme have changed the public pension system? Second, what is the factor that has caused these changes? As a result, two reforms in National Pension Scheme can be regraded as a gradual institutional transition such as ‘Conversion’ and ‘Partial Displacement’ than as a radical change. The National Pension Scheme was originally introduced for the purpose of promoting economic growth. In the first reform in 1998, however, the aim of National Pension Scheme was transformed into providing the old age income security for every worker. In the second reform, a public pension system which only consisted of social insurance was replaced partially by the Basic Old-Age Pension, a system of social assistance.
In addition, the factors in the political context and the institutional discretion which are presented in historical institutionalism are very useful to explain these aspect of change. In the second reform, the weakening political support for keeping institution and low level of discretion caused the transition of ‘Partial Displacement’. By contrast, in expension reform like the first reform a high discretion and a strong veto player could led to ‘Conversion’ rather than ‘Drift’.