Name: Cinco, Merrycris T.

Course and Year: BSMA-3

CASE STUDY: SCHOOLS OF THOUGHT IN CONTEXT:

SOUTH KOREA AND ARGENTINA

I. Facts of the Case

South Korea and Argentina have recently been contrasted and examined for having similar
economic figures. These two employ the four development approaches of growth stages, structural
patterns of development, dependency, and neoclassical. These four techniques use their valuable
insights into development processes and policies to help the country improve even more. Both of
these countries have populations of 50 million and 41 million people, respectively. They were also
categorized as middle-income countries, but the World Bank reclassified South Korea as a high-
income country in 2008, with a per capita income of $31,000, about double Argentina's $17,000.
Using the Rostow stages of economic growth, South Korea has enjoyed positive growth in
recent years. Among other countries, it made the most investments, particularly in Asia. In 1965,
15% of GNI was generated, but by 1990, it had risen to 37%. In the period 2000-2007, the GNI
remained close to 40%. Argentina, on the other hand, is experiencing major negative growth,
which is affecting its economy. Despite the fact that the country was able to grow in the following
years, the nation's long-term obligations have yet to be paid or followed upon. This translates to a
startling 17 percent of GDP, or half of South Korea's.
With the rapid increase in agricultural productivity, both countries boost their country's
productivity. However, the results are not the same. Between 1985 and 1990, South Korea's per
capita income climbed by 7% per year, but Argentina's living circumstances remained unchanged.
The reason for this is that South Korea prioritizes the expansion of its agricultural workforce by
enacting unconstitutional reforms that boost the country's economy. Argentina places a high value
on improvement, despite having little knowledge of the long-term consequences of the decisions
that have led to their current situation.
After World War II, South Korea became reliant on the Japanese colony, but they also
gained allies that aided their dependence on North Korea. The United States then provided an aid
budget to boost South Korea's economy, which is now a highly developed country with numerous
prospects to grow. Argentina's economy has historically relied primarily on export of products.
II. Problem/s of the Case
1. How to break Argentina’s foreign dependency on developed-country economic
interests especially those of British and American corporations.

2. How to prevent the existence of government failure in Argentina on which letting the
export real prices fall lower than imports.

III. Solutions to the Problem

Solutions to Problem 1:
Solution 1. To place a strong emphasis on achieving self-sufficiency by establishing an
industrial sector based on indigenous raw materials and powered by the home market.
Solution 2. To underline the importance of building an enclave economy with few strong
relationships to other economic sectors and to progress the two countries' poor development, an enclave
economy with few strong ties to other economic sectors develops, and social spending is squeezed out of
the defense budget.

Solutions to Problem 2:
Solution 1. To focus on raising the pricing of imported goods and making them less
appealing to consumers, or by restricting the availability of imported goods in favor of
domestically produced versions of the same product since non-tariff barriers will help protect the
domestic producers from foreign competition
Solution 2. To develop and establish successful manufacturing export sectors so that they
can focus more on strengthening the country's exports while maintaining control and management.

IV. Recommendation
• Argentina should collaborate with foreign technologies to boost productivity and
promote the country's industrialization. To build up their economic industry, they
are utilizing their accessible raw materials and focusing more on the manufacturing
of agricultural products.
• Applying licenses, quotas, and ad valorem tariffs to foreign products. The
government issues a license to a company that authorizes it to import a specific type
of product into the country. Import quotas are limits on the amount of a specific
product that can be imported. A tax applied on the basis of the monetary value of
an item is known as an ad valorem tariff.
V. Conclusion
In terms of population and income, South Korea and Argentina are a good fit. In many
aspects, South Korea, like the neoclassical theory, poses a challenge to dependence theory, but
Argentina is more focused on justification. South Korea focuses more on linear stages of
development and conclusions on their structural patterns of development, whereas Argentina faces
difficulties to their universal significance. South Korea exemplifies the importance of government
in resolving coordination shortcomings. Argentina, on the other hand, offers a way for the
government to participate in a disastrous balance.
In summary, each method for comprehending progress has its own set of advantages and
disadvantages. We looked at a variety of opposing theories and approaches to the study of
economic development in this chapter. The fact that there is so much disagreement whether
ideological, theoretical, or empirical makes economic development research both demanding and
intriguing. Development economics, more than any other subject of economics, lacks a broadly
agreed ideology or paradigm. Instead, we have an ever-evolving pattern of insights and
understandings that serve as the foundation for analyzing the various nations' present growth
prospects.