This paper investigates the effects of the "Heavy and
Chemical Industry"(HCI) policy of the 1970s on resource
allocation among manufacturing industries and their
performances. The effects on industrial organization and on
income distribution are also very important, but they are not
considered here. The effect on the performance of sectors other
than the manufacturing sector is not considered, either.
This paper consists of two parts. Part Ⅰ, "The Background
of the Heavy and Chemical Industry Policy, " reviews the
economic and non-economic circumstances at the time the policy
was adopted and discusses the motivations behind the policy.
Part Ⅱ, " The Korean Experience with an Industrial Targeting
Policy," briefly presents the instruments of the HCI policy and
discusses the effects of the policy on the performance of the
manufacturing sector of the Korean economy.