Political Economy of the Third World Bilateralism
Political Economy of the Third World Bilateralism
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Date
1984
Authors
Moon, Chung-in
Advisor
Pirages, Dennis
Citation
DRUM DOI
Abstract
The birth and development of extensive bilateral
economic ties between Korea and Saudi Arabia, as we
explained in Chapter Four, depended only partly on a set of
preconditions conducive to the rise of such bilateralism.
Industrial complementarity shaped by the precise timing of
development sequencing provided both countries with various
economic incentives to cooperate with each other. At the
same time, their structural position in the international
division of labor and the constraints resulting therefrom,
combined with endogenous political and economic factors,
had induced political elites of both countries to share a
certain strategic consensus in their foreign economic
policy which nurtured a feeling of mutual necessity. In
this sense, it can be argued that both Saudi Arabia and
Korea were endowed with a set of necessary conditions to
promote bilateral ties.
However, the mere existence of these necessary
conditions alone does not offer a satisfactory explanation
for the dynamic interactive processes which evolved around
the Saudi Arabian-Korean connection. Certainly these
preconditions define the parameters of the structure of bilateral interaction between two countries in terms of
economic and political factors (i.e., comparative advantage
and price, structural position in the international
economic system and the range of policy choice, and
domestic decision-making structure and the level of
bilateral preference). It is from these preconditions that
we can deduce a set of causal conditions leading to the
rise of bilateral ties. Nevertheless, the process-level
dynamics and the mechanisms through which this bilateral
connection developed are not explained in these
preconditions. In this connection, Chapter Two asserted
that "the channel and process-level dynamics of inter-South
bilateralism are a function of entrepreneurial dynamism
(private) in general and the nature of business -state
relationship in particular." In other words, since private
entrepreneurs carry out economic transactions between two
countries, it is essential to examine the role of private
entrepreneurship in the evolution of the Saudi Arabian-
Korean connection.
Under standing the nature of entrepreneurial dynamism
within the bilateral setting is not an easy task.
However, Chapter Two identifies four behavioral and
structural factors associated with business practices of
private entrepreneurs: perception or monitoring capability
of new markets, overall entry conditions in new markets,
market penetration strategy, and the nature of a business
connection as a structural determinant of the effectiveness
of market penetration. This chapter's hypothesis is that
the keener the perception of the new market the more
effective the penetration strategy, and the more extensive
the magnitude of business connections, the higher the
level of bilateral economic transactions. once caveat is in
order, however. The entrepreneurial dynamism involved in
the Saudi-Korean connection is chiefly one way, rather than
two way. While Korean businessmen were anxious to get into
the Saudi market, Saudi entrepreneurs were less interested
in Korea because their involvement with Korea was solely
based on oil exports which did not require
entrepreneurial efforts. We focus primarily, therefore, on
the entrepreneurial dynamism exhibited by Korean
businessmen and on the receptivity of Saudi entrepreneurs.