Divergence before the division: the colonial origins of separate development paths in Korea

Martin Andersson, Montserrat López Jerez*, Luka Miladinovic

*Corresponding author for this work

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This study revisits the question of what impact Japanese colonialism had on the long-term economic development of North and South Korea. Factor endowments, economic activity and economic performance are compared between the regions that later became parts of North and South Korea, respectively. The study finds that important elements of the economic history of the peninsula have not been sufficiently acknowledged in much of the influential literature that uses Korea as an illustration of theoretical claims of the root causes of development. In particular, the fact that the economic divergence of northern and southern regions could be traced back to different colonial treatments – especially after mid-1920s – has often been overlooked when analysing the divergent post-partition development trajectories. The study suggests, based on a sectoral similarities analysis, that the initial dissimilar economic performance of North and South can at least partially be found in differences in political economy and economic trajectories preceding the partition.
Original languageEnglish
Pages (from-to)802-819
Number of pages18
JournalJournal of Institutional Economics
Issue number6
Early online date30 Jun 2023
Publication statusPublished - 1 Dec 2023


  • Division
  • Factor endowments
  • Institutional change
  • Japanese colonialism
  • Korea
  • Sectoral analysis


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