By looking into the data collected by the scholars at Naksungdae Institute of
Economic Research, we ask the following two questions on the colonial
development in Korea. (1) Was Korea developed economically during the
colonial rule of Imperial Japan? (2) Did the colonial development cause the
rapid growth after mid-1960s? The answer to the first question is conditionally
affirmative in the sense that the development was not enough to remove the
poverty in colonial Korea. The fraction of consumption in GDP was very high
and that of basic foodstuffs and clothing in consumption was also sustained
high during the colonial period. In addition, most of Korean people stayed in
agricultural sector. The answer to the second question is definitely negative.
Firstly, physical capital accumulated in South Korea during the colonial period
had not been much and wiped away after WWII and during Korean War.
Secondly, human capital was not accumulated so much as to cause the rapid
growth since mid-1960s. Thirdly, the whole story relating the colonial rule to
the strong government of Park Chung Hee has been far-fetched. Lastly,
institutions are not sufficient but necessary for a rapid growth. Furthermore,
Japanese institutions were not the ones enhancing economic development. In
sum, the colonial rule by Imperial Japan helped Korea little with the rapid
growth since mid-1960s.