Tonight we all read an article published in ITMC called Explaining the Development of North and South Korea. Through this article the authors discussed a Most-Similar-Systems (MSS) Design study and notes the influences that North and South Korea followed through their historical development. Although, North and South Korea have similar cultures and geographies they vary drastically in their political and economic institutions.¹ North Korea is still employs a Soviet Style “planned economy”, meaning the state makes all key decisions regarding funding and production.¹ On the contrary, South Korea promotes export-led growth.¹ The article presents a set of theories to why these two states vary in their development, the theories are focused around Institutions (market institutions), Institutions (states and state policy), culture and the World-System.¹
In a 2017 article titled , “Why Harley-Davidson Is Moving Production Overseas published” by Fortune, the author discusses the reasons and implications of the move. The Trump administration increased tariffs on imported steel and aluminum from the EU, Mexico and Canada, although these tariffs were designed to protect U.S Jobs they enraged other countries.² “In response to Trump’s tariffs, Europeans are targeting the most iconic American products… The EU raised U.S. motorcycle tariffs from 6% to 31%”.² Harley has made the decision to produce its European product in the EU to maintain their business abroad and combat the tariff. ²
How much government control is helpful for economic growth in a nation?
In South Korea, the government has been focused on having an export-led growth economy, allowed by the policies of their government, a democracy. ¹ In the United States the administrations action of implementing high tariffs in order to protect American jobs has backfired. Companies that are moving overseas to produce goods in order to offset the cost of the high tariffs is depleting the amount of jobs available to Americans, as well as increasing the price of goods for Americans. As the state government limits the countries involvement in the World-System the price and accessibility to goods increases. On the contrary to North Korea’s Communist ways, a laissez- faire system enables businesses to be involved with other nations.
¹Dickovick, J. Tyler, and Jonathan Eastwood. Comparative Politics: Integrating Theories, Methods, and Cases. Second edition. Pages 114-117
²Carson Kessler “Why Harley-Davidson Is Moving Production Overseas.” Fortune. Accessed October 11, 2018. http://fortune.com/2018/06/26/harley-davidson-moving-production-overseas/.