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Thesis Submitted for the Degree of Doctor of Philosophy University of Bath PHD The role of the state and the market in the Korean Water Sector: Strategic decision making approach for good governance Min, Kyung-Jin Award date: 2011 Awarding institution: University of Bath Link to publication Alternative formats If you require this document in an alternative format, please contact: [email protected] General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal ? Take down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Download date: 25. Sep. 2021 The Role of the State and the Market in the Korean Water Sector: Strategic Decision Making Approach for Good Governance Kyung-Jin Min A thesis submitted for the degree of Doctor of Philosophy University of Bath School of Management January 2011 COPYRIGHT Attention is drawn to the fact that copyright of this thesis rests with its author. A copy of this thesis has been supplied on condition that anyone who consults it is understood to recognise that its copyright rests with the author and they must not copy it or use material from it except as permitted by law or with the consent of the author. This thesis may be available for consultation within the University Library and may be photocopied or lent to other libraries for the purposes of consultation. Abstract This thesis challenges the neoclassical and the state-oriented views on economic and industrial development, using a strategic decision making theory framework and by focusing on the changing governance of the Korean water sector as an in-depth case. This research finds that a governance structure controlled by a few elites from the market or the state inevitably fails to meet the public interest. Strategic decision making theory (SDT) in this research incorporates Barzelay’s institutional processualism (Barzelay, 2003, Barzelay and Gallego, 2006) and Moe’s concept of purposive incentive (1981), in order to explain ‘changing’ governance and the reasons why some actors voluntarily participate in democratic decision making despite ‘collective action problems’. The Korean water sector, the case of this research, illustrates these ideas by showing that governance changes result from intense interaction between interested and purposive actors, critical events, and context. SDT analysis is complemented by an econometric analysis, which shows that the decentralisation of decision making power does not necessarily come with better performance unless proper governance is introduced. Solutions suggested in this thesis are democratic industrial governance and, as an intermediate means, a democratic regulatory agency, which is beyond merely (economic) regulation to remedy ‘market failure’ and economic bureaucrats pursuing long term career path. i Acknowledgement I have to mention my parents’ sacrifice to me and our family, even in desperate situations, which enabled me to reach this point. My wife, Ran, is an amazing support in my life and study. My two sons, Hyun and Yoon, have also been a driving force in my research. Without their support and encouragement, I would not have started, continued and finished this work. I acknowledge the financial support of Korea Water Resources Corporation. The academic influence and humane support of my two supervisors, Dr. Robert Branston and Mr. Peter Vass, has been enormous in the process of my PhD research. Their advice has shaped my rough ideas and trials, and helped me realise new ways of research. I deeply thank two examiners, Professor Roger Sugden and Dr. Tomlinson. Their comments in the viva were incisive. All have proved to be good guidance to improve both the quality of my thesis and my study in general. It was good luck for me to meet Professor Barzelay. Discussion with him on his processualism concept enriched my research base and strategic decision making theory. My friends, Dr. Tina Chang, Dr. Yeong-jun Choi, Sergio Seabra, Jeong-Hwa Yeom, and John Heung, have been good informants and advisors. I deeply appreciate their help and support. Even though it is impossible to thank everyone who helped me finish my thesis, I would like to express my heart-felt thanks to Dr. James Wilson, Vice President Wan-Kyu Kim, Professor Dong-Myeon Shin, Professor Heekyung Park, Dr. Hyun-ju Moon, Hyung- Cheol Yeom, all interviewees for this research, my colleagues at Korea Water Resources Corporation and the University of Bath School of Management, and everyone else who has contributed to, or influenced this thesis. Nonetheless, the responsibility for errors is entirely my own. ii Table of Contents Abstract.................................................................................................................. i Acknowledgement................................................................................................ ii Table of Contents................................................................................................ iii List of Tables ....................................................................................................... vi List of Figures..................................................................................................... vii List of Abbreviations .......................................................................................... ix Chapter 1. Introduction .....................................................................................1 1.1 Context, Motivation and Research Questions...................................................1 1.2 Organisation and Chapter Overview.................................................................4 Chapter 2. Literature Review and Analytical Framework ............................9 2.1 Introduction..........................................................................................................9 2.2 Strategic Decision Making Theory.....................................................................9 2.3 Issues of Democratic Participation...................................................................15 2.4 The State, the Market and Governance...........................................................25 2.5 A Processual Approach .....................................................................................29 2.6 Concluding Remarks .........................................................................................32 Chapter 3 Case Reviews on Asian Economies and Water Reforms...........34 3.1 Introduction........................................................................................................34 3.2 Developmental Paths of Japanese and Taiwanese Economy .........................35 3.3 Water Reforms in England and Wales, Italy and Argentina.........................44 3.4 Concluding Remarks .........................................................................................56 Chapter 4. Methodology ..................................................................................59 4.1 Introduction........................................................................................................59 4.2 A Single Case Study with Three Sub-cases......................................................61 4.3 Methods...............................................................................................................64 iii 4.4 Concluding remarks ..........................................................................................74 Chapter 5 Physical, Socioeconomic and Environmental Context...............76 5.1 Introduction........................................................................................................76 5.2 Physical Characteristics of the Water Industry..............................................77 5.3 Socioeconomic Context and the Water Industry ............................................87 5.4 Environmental Context and Water Resources Management ........................96 5.5 Concluding Remarks .........................................................................................99 Chapter 6 The State-led Economy and the Korean Water Industry .......101 6.1 Introduction......................................................................................................101 6.2 The Miracle of the Han River.........................................................................106 6.3 Prior Events......................................................................................................108 6.4 Episode 1: The Supply-oriented Governance by the Developmental State 112 6.5 Episode 2: The Supply-oriented Governance under the Dismantling Strong State...................................................................................................................131 6.6 Material and Purposive Actors in the Supply-oriented Governance..........153 6.7 Participation in the Supply-oriented Governance ........................................164 6.8 Concluding Remarks .......................................................................................171
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