South Korea's story to date has in big part been the story of what is sometimes called a "developmental state"-that is, one that uses formidable powers to direct and regulate the economy to achieve growth above all else. The first "Miracle on the Han" worked because the developmental state, after 1961, mostly got things right. Or, rather, it got them right until it got them very wrong, resulting in the 1997 fi-rnnancial crisis. By then, the economy and the way it was financed had become far too complex for traditional guidance, and the state's sense of omnipotence had blinded it to the need for structural reform. The recovery from crisis accomplished only half the structural reforms South Korea needs. There will be no second miracle unless Mr Lee accomplishes the other half.
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