(TheDeclineofDevelopmentalState)20055DevelopmentalstatesplayedaleadingroleinpromotingeconomicdevelopmentinNortheastAsia.However,theAsianfinancialcrisismadepeoplequestionthecontinuityofsucharole.Thispaperdiscussesthequestionofthedeclineofdevelopmentalstate.Startingfromthe1980s,developmentalstatesinNortheastAsiahavebeenfacingstrongchallengesbothfromoutsideandfrominside,whichledtothetransformationandeventhedeclineofthedevelopmentalstates.BycomparingSouthKoreaandTaiwan,thispaperneverthelesspointstodifferentroutesofsuchtransformation,andarguesthatitsexplanationliesindifferentgovernment-businessrelationsinSouthKoreaandTaiwan,whichwereshapedbydifferenthistoricalinstitutions.Thus,thispaperopensanewangletotheresearchonthedeclineofdevelopmentalstate.DevelopmentalState,HistoricalInstitutions,Government-BusinessRelations,andFinancialCrisis1Johnson,1982;Amsden,1989;Wade,199011Zhu,2002199719802Hamm,1999196013.2%198028.2%196318.5%198041.9%Koo,1987:177197348.2%197958.7%1970Kim,1993:236,238Han,1989:294;Tsai,1989:86Deyo,1987:2001987Thompson,1996Mastanduno,200031997Haggard,1990;HeoandKim,2000;Zhang,20021Kim,1971:43-48Henderson,1968:106Lee,1968;Kim,1982;Cumings,1984;Kohli,1994Eckert,1991;Cumings,1997Clifford,1994:47194516721202921198372619935441Chu,1989:662419495%36%1986242Fei,1993:72monetaryconservatismCheng,,HaggardandKang,1998:92Gold,1988Mardon,1990;Winters,19941971198310%24.5%46.3%1981198818%19753981986547Whitley1992:4319801991556%Lee,1997:655199225%Kim,1997:2001993199719971Wade,1998a,1998b,2004;WadeandVeneroso,1998Chang,1998;Woo-Cumings,1999;Mo,2001Gills,1996;Lee,2000;Choi,2002;Park,2002;Thurbon,2003HeoandKim,2000;Liao,20011“Themesection:modelsandcrisis:turbulenceinAsianeconomies”ReviewofInternationalPoliticalEconomy5(3),1998;HaggardandMacIntyre,1998;Agenor,Miller,VinesandWeber,1999;Haggard,2000;HaggardandMo,2000Pempel,1999;NobleandRavenhill,2000;Robison,Beeson,JayasuriyaandKim,20006199220001991901996Dixon,1999;Minns,2001;MoonandRhyu,2000;Liu,2002;Maswood,2002Weiss,1998,1999,2000,2003;Huang2001;Thurbon,2001;Kondoh,2002;Wong,2004;Kong,2005;2000200371991—2000—2000“”—01986—1950-19852003—19931996—1992Agenor,Pierre-Richard,Miller,Marcus,Vines,David,andWeber,Axel.1999.TheAsianfinancialcrisis:causes,contagionandconsequences.Cambridge:CambridgeUniversityPress.Amsden,AliceH.1989.Asia’sNextGiant:SouthKoreaandLateIndustrialization.OxfordandNewYork:OxfordUniversityPress.Chang,Ha-Joon.1998.“SouthKorea:TheMisunderstoodCrisis.”InK.S.Jomoed.TigersinTrouble:FinancialGovernance,LiberalizationandCrisesinEastAsia.London:ZedBooks.Cheng,,Tun-Jen,StephanHaggardandDavidKang,1998.“InstitutionsandgrowthinKoreaandTaiwan:thebureaucracy.”JournalofDevelopmentStudies34(6):87-112.Choi,Jin-Wook.2002.“RegulatoryforbearanceandfinancialcrisisinSouthKorea.”AsianSurvey42(2).Chu,Yun-han.1989.“StatestructureandEconomicAdjustmentoftheEastAsianNewlyIndustrializingCountries.”InternationalOrganization,43(4).Clifford,MarkL.1994.TroubledTiger:TheUnauthorizedBiographyofKorea,Inc.Singapore:8BHAsia.Cumings,Bruce.1984.“TheoriginsanddevelopmentoftheNortheastAsianpoliticaleconomy:industrialsectors,productcycles,andpoliticalconsequences,”InternationalOrganization38(1):1-40._____.1997.Korea’sPlaceintheSun:AModernHistory.NewYorkandLondon:W.W.Norton&Company.Deyo,FredericC.1987.“StateandLabor:ModesofPoliticalExclusioninEastAsianDevelopment.”FredericC.Deyoed.ThePoliticalEconomyoftheNewAsianIndustrialism.IthacaandLondon:CornellUniversityPress.Dixon,Chris.1999.“ThedevelopmentalimplicationsofthePacificAsiancrises:theThaiexperience.”ThirdWorldQuarterly20(2):439-452.Eckert,CarterJ.1991.OffspringofEmpire:TheKoch’angKimsandtheColonialOriginsofKoreanCapitalism,1876-1945.SeattleandLondon:UniversityofWashingtonPress.Fei,John.1993.“TheTaiwanEconomyintheSeventies.”InShao-chuanLenged.ChiangChing-Kuo’sLeadershipintheDevelopmentoftheRepublicofChinaonTaiwan.Lanham,NewYork,andLondon:UniversityPressofAmerica.Gills,BarryK.1996.“EconomicliberalisationandreforminSouthKoreainthe1990s:a‘comingofage’oracaseof‘graduationblues’?”ThirdWorldQuarterly17(4):667-688.Gold,Thomas.1988.“Entrepreneurs,Multinationals,andtheState.”InEdwinA.WincklerandSusanGreenhalgh.eds.ContendingApproachestothePoliticalEconomyofTaiwan.ArmonkandLondon:M.E.Sharpe.Haggard,Stephan.1990.“Institutionsandeconomicpolicy:theoryandaKoreancasestudy.”WorldPolitics42(2):210-237.Haggard,Stephan.2000.ThepoliticaleconomyoftheAsianfinancialcrisis.WashingtonD.C.:InstituteforInternationalEconomics.Haggard,Stephan,andAndrewMacIntyre,1998.“ThePoliticalEconomyoftheAsianEconomicCrisis.”ReviewofInternationalPoliticalEconomy5(3):381-92.Haggard,Stephan,andMo,Jongryn.2000.“ThepoliticaleconomyoftheKoreanfinancialcrisis.”ReviewofInternationalPoliticalEconomy7(2):197-218.Hamm,Taik-Young.1999.ArmingtheTwoKoreas:State,CapitalandMilitaryPower.LondonandNewYork:Routledge.9Han,Sung-Joo.1989.“SouthKorea:PoliticsinTransition.”InL.Diamond,J.J.Linz,andS.M.Lipsereds.DemocracyinDevelopmentCountries.Vol.3.London:AdamantimePress.Henderson,Gregory.1968.Korea:ThePoliticsofthe