But they have different quality of kimchi.
LOL at some people here who credit IQ. North Korea and South Korea largely have the same IQs.
How did South Korea get so rich?
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This paper documents the fundamental role played by factor accumulation in explaining the extraordinary postwar growth of Hong Kong, Singapore, South Korea and Taiwan. Participation rates, educational levels and (with the exception of Hong Kong) investment rates have risen rapidly in all four economies. In addition, there have been large intersectoral reallocations of labour, with (again, excepting Hong Kong) non-agricultural and manufacturing employment growing one and a half to two times as fast as the aggregate working population. Thus, while the growth of output per capita in these economies has averaged 6% to 7% per annum over the past two and a half decades, the growth of output per effective worker in the non- agricultural sector of these economies has been only 3% to 4% per annum. If one then allows for the doubling, tripling and even quadrupling of the investment to GDP ratio in these economies, one arrives at total factor productivity growth rates, both for the non- agricultural economy and for manufacturing in particular, which are well within the bounds of those experienced by the OECD and Latin American economies over equally long periods of time. While the growth of output and manufacturing exports in the newly industrializing economies of East Asia is virtually unprecedented, the growth of total factor productivity in these economies is not.
http://www.nber.org/papers/w4680 -
Institution and sanitation.
Who borough them to Korea? Japanese.
Koreans were illiterate aboliginis crapping in the side street while feudal lord enjoyed luxury. Japanese came, killed the feudal Min family that wanted to sell their country to Russians, cleaned up Seoul, built schools, hospitals and railroad, created banks, factories, etc. Seeds of industrialization were there by 1940, infant mortality plummeted, life expectancy increased, and Koreans could now read!
Koreans were treated as Japanese citizen, free to migrate to japan and smart ones went to university of Tokyo. Korean athletes competed in Berlin Olympics and won medals.
Then after 1965, Japanese aid helped Korean bureaucrats (modeled after Japanese system) implement industrial policy.
Say kamsa hamnida to Japanese, you ungrateful kimchi head.