Resurgence of Social Pact Regime? - a Critical Review on the Recent 'grand Compromise' in South Korea

While the balances of the labor markets are being destructed due to polarization, South Korea has seen an emergence of a new social pact concluded in September 2015. It is being described a 'grand compromise' and the successor of the well-known social pact concluded in 1998 under the Asian Financial Crisis. The processes of the pact-making as well as its implementation contains interesting dimensions to be analyzed in relation to corporatism theory as well as the recent debates on the dualization of labor markets. Most of all, its contents are oriented to realize a new political exchange betewen insiders and outsiders of labor markets. Despite the innovative figures of the document, the real processes of reform failed to bring about political innovation. Reviewing the processes critically, this paper characterizes the recent social pact in Korea and discusses its chances and limits.