South Korea’s Economic Miracle: State-Led Industrialization and the Role of U.S. Aid

Abstract

This article examines the economic transformation of South Korea from the 1950s to the 1980s, focusing on the state-led industrialization model that contributed to the country’s rapid growth, often referred to as the "Miracle on the Han River." The study explores the role of government policies, particularly under the leadership of President Park Chung-hee, in fostering economic development through heavy industrialization, export promotion, and infrastructure investment. The paper also considers the role of U.S. foreign aid and military assistance in supporting South Korea’s economic recovery after the Korean War. By analyzing historical data, government reports, and international relations, the research assesses how South Korea's economic policies were shaped by both internal factors and external influences, including the Cold War context. The study concludes by reflecting on the challenges South Korea faced in transitioning from an agrarian economy to a major industrial power and the lessons it offers for other developing countries.