The economy of the “Hermit Kingdom” (a Western-inspired nickname) was also more agrarian with less commerce, urbanization, and manufacturing than either of its bigger Northeast Asian neighbors or Imperial Russia. Yet, Korea was more isolated from the West than China or even Japan. The Chosŏn Dynasty Kings (1392-1910) presided over a country strongly influenced by Confucianism and other Chinese traditions the dynasty’s kingdom was also home to a proud and distinctive people. On the eve of the 20 th century, Korea had been a unified state for over twelve centuries. This article suggests that institutions matter and that key institutions are fundamental to economic success. Now, South Korea has the same wealth as Western European nations, on average, yet North Korea firmly remains at the bottom of the world’s development ladder.
The Democratic People’s Republic of Korea (North Korea, DPRK) and the Republic of Korea (South Korea, ROK), for example, started out as poor nations after World War II. Economists have debated for years why it is that some nations prosper while others do not.
