The Evolution of Welfare Production Regimes in East Asia: A Comparative Study of Korea, Japan, and Taiwan

Abstract

This study examines the evolution of a dualistic welfare production regime in Korea and Japan, with Taiwan as a contrasting case. It examines how institutions evolved during the industrialization period in the three countries. Taking the view of historical institutionalism, the Varieties of Capitalism approach (Hall & Soskice, 2001) provided theoretical grounds for analyzing the variation of welfare production regimes in East Asia. The study argues that historical events (in Japan, the end of World War II and the Allied occupation; in Korea, the influx of foreign aid followed by the Korean War and the military government; in Taiwan, the defeat of the Kuomintang and ethnic divisions) created a critical juncture for these countries’ institutional developments. Korea and Japan developed large-company-oriented welfare production regimes, while Taiwan’s regime was more small and medium size enterprises (SMEs)-oriented. The dualistic welfare production regime of large companies and small and medium size enterprises (SMEs) in Korea and Japan is further explained by the functional equivalent welfare system that developed together with each country’s production regime.