The rapid growth and structural change of South Korea (henceforth referred to as Korea) during the last three decades has spawned a large body of literature, which is becoming almost impossible to keep track of. With the accumulation of research, it has been revealed that the state played an important role, and the proponents of Korea as a free market have been on the defensive for the last several years. The 'alternative' literature emphasising the role of the state in the Korean developmental experience is still in its infancy, despite some important contributions by Jones and Sakong (1980), Luedde-Neurath (1986), and most notably Amsden (1989). The present article provides some additional empirical support to this alternative literature, and consolidates its theoretical basis by using some recent developments in economic theory such as the New Institutionalist Economics.