Actually, you have raised a very important and interesting question - Why do some states develop strong economies, while others do not? Modern theorists are not so self-conscious nowadays, no one can really provide a road map for development, but there are some major features that can be seen and analysed.

If you look at the history of development, for the most part it, it can really be traced to the Industrial Revolution that occurred in Britain during the 19th Century, and then spread to other countries. Britain, the largest beneficiary of this paradigm shift, was able to establish a number of colonies throughout the world, and exert its hegemony in the global state system. Several factors influenced the development of the industrial revolution, and today are still being argued over by historians; according to Kenneth Pomeranz in The Great Divergence, Britain had a unique convergence of factors that enabled it establish itself as an industrial power. It had the New World, which served as a valve for excess population, a center-periphery dynamic relationship with its colonies that favoured the development of the centre, and dry coal mines that enabled it to acquire a relatively easy source of coal. Once, self-sustaining growth developed in Britain, or in other words industrial capitalism, it reshaped the institutions, culture and economy of Britain drastically, and forced a paradigm shift on the world. As a result, other polities were forced to modernize (either through capitalism or marxism), or risk being absorbed by Britain and other Imperial powers.

In recent development literature, political scientists like to look at institutions as a vector of development. 'Good' institutions that are power sharing spur on economic development, while 'bad' institutions stifle development through hoarding resources or wealth for a privileged few. One of the best books you can read on this topic is Why Nations Fail by James A Robinson, and Daron Acemoglu. Gradually, if the elite (or others) create institutions in pivotal moments, these institutions will affect the development of the country. Case in point, oil regimes. In contrast with coal, which helped create the labour movement in Britain, oil needs to be extracted only by a few people. As a result, a few wells and refineries can control a vast supply of wealth. Elites don't necessarily need to negotiate with workers (or the proletariat if you will), and can reserve the lion's share of wealth for themselves. The wealth doesn't really trickle down, and institutions are created, like military posts, elections, and the like to buttress the elite's power. Meanwhile, other countries like Botswana, developed a more pluralistic government and institutional heritage as a result of a convergence of tribal goals and British support. As a result, when diamonds were discovered, and a mining industry developed, the fruits helped benefit the entire population rather than a clique which enabled a more self-sustaining growth. Of course, all of this is historically contingent, and institutional developments can go either way (unless there is an overwhelming path dependency).

Anyway, on to a (short) analysis of the case studies. What really enabled Japan to modernize, and do it quickly was a high government revenue ( in comparison to other neighbouring states), a strong impetus to modernize ( fear of colonization among elites through observation of China), a declining central government, lack of significant foreign shocks, and a strong literate and politically active class. South Korea on the other hand, benefitted from an institutional legacy from Japanese colonization, a strong impetus to modernize (north korea), significant aid and a market in the form of the United States, and an elite, Park Cheung Hee and successors, who created a state highly tied to industry, and one that squashed labour movements at any cost in order to modernize on the cheap. Indian development suffered from English colonization to a certain extent, but after independence developed only a few areas such as the central plains for heavy industry. Meanwhile, other areas, such as Tamil Nadu, Kerala and the South were able to develop despite a lack of elite subsidies because they were forced to become competitive in the global market, and they accomplished this through establishing an IT sector. Nigeria, on the other hand has had less than stellar results (though far better than some other states) because it inherited a weak institutional legacy from the British, who perfected the art of colonization on the cheap and did not allocate a significant amount of money for infrastructure (outside of extraction), education, or the like. Once independence came, a weak state combined with frequent coups, and a lack of institutionalized rule of law, along with ethnic strife and state breakdown damaged the ability of the state to push forward development. Fortuitously, oil and a weird mixture of politics, has enabled the economy to overall move forward.

I hope this response won't get buried, but nevertheless, I can expand on certain sections if desired.

While Korea was never Colonized by European powers, it was annexed by Japan. Infact it underwent a similar ordeal as Africa, where for a period 40 years, Korean culture, identity and language were suppressed and supplanted by Japanese. Other colonial practices such as forced labor and land reoganization (into the hands of japanese) were also practiced.

However, I would argue that unlike Africa, Korea was much less exploited under the japanese. Infact Japan improved infastructure, education and technology in korea. The Korean population doubled and production increased drasticly. This is in stark contrast to European powers, which either didnt developed African areas at all, or destroyed cultures when they conflicted with European interests.

Now why Japan and Korea were able to industrialize has been toroughly debated and is still a contested subject. Personally I would argue that unlike India, Korea and Japan are Homogenous and were relatively centralized. And unlike sub-Saharan Africa, that Korea and Japan already had complex economic societies and effective state systems. Many states in Africa are multi-ethnic, multi-religious and have multiple social ordering. This makes an African country extremely difficult to govern and modernize.

I would argue that the reasons behind the lack of colonization of japan and korea (and china) stems from the fact that these countries were relatively unified, well organized and relatively technologically sophisticated. This combined with the large populations made East Asia much less financially interesting (And feasable) for Europeans to colonize. Also concider that the countries that had the infastructure to do so (France, England, Spain and the Netherlands) already had large empires that they needed to manage, and would not be able to bear the burden of occupying and governing East Asia.

Because Korea and Japan were already relatively unified, well organized and relatively technologically sophisticated, the step from feudal to a modern system was easier to make then say tribal africa, or splintered and colonized India would be able to do. Thus I would argue that it is not a lack of colonization that caused Korea and Japan to succeed, but that which makes Korea and Japan able to succeed in the Modern world, also helped them stafe off European colonization.

I am not sure about the subject/title of your post, but as for the question about were Korea and Japan better off in 1800?

For the most part no. Japan westernized very quickly but that wasn't until after 1860s so it was not better off to any significant extent in 1800.

Korea is probably even less likely, because when it was divided after WWII the north and the south weren't that different. In fact until the first Sino-Japanese War Korea was a tributary state to China, and after that it was in the Japanese sphere of influence.

The five most wealthy countries outside the European (and Northern American spheres) as defined by GDP per capita are Qatar, Singapore, Brunei, Kuwait and UAE.

All were colonized by the British.

The five most wealthy countries as defined by GDP (outside the same sphere) are China, Japan, Brazil, India, South Korea

Brazil and India were colonized. South Korea was colonized by Japan

The five highest HDI ranking outside the same sphere are Singapore, Hong Kong, South Korea, Japan, Israel (if you don't count that then Brunei).

Again half were colonized by British.

So i guess you can say that the wealthiest were either never colonized or colonized by the British...

It's difficult to say whether the economic prosperity of modern Korea and Japan is coincidence or not. There is a large amount of academic interest and study into the affect of colonization on countries economic development, though there are so many factors that go into development that it is hard to say just how much impact a nation's colonial past has today.

It does seem clear that if a country was subjected to "exploitative" colonialism (which was certainly the case in Nigeria, and somewhat in India as well), then it generally had much less economic success than countries that weren't. The examples of this can be found in much of the colonies in Africa, the Caribbean, South America, and Southeast Asia. Factors such as harsh climate, disease, and large native populations made long term settlement by Europeans unattractive. Therefore, the colonies typically worked to extract as much wealth as possible as quickly as possible to enrich the colonial rulers. The legacy of this was a lack of good institutions and governance, which then hampered the development of the countries even after independence.

So South Korea and Japan were at least not impeded by this type of European colonialism. Though, as others have mentioned, Korea was colonized by Japan from 1910 to 1945 so it didn't escape colonialism completely. However, Korea actually industrialized significantly during the time of Japanese rule, due in part to Japanese influences which sought to modernize the country (source). Instead of merely seeking to exploit Korean natural resources for quick profits, Japan invested in Korean industry and infrastructure which then gave South Korea significant benefits in industrializing after independence in 1945. This type of colonization (where the colonial power wants to assimilate the colony) is similar to the settler colonialism seen in North America, Hong Kong, South Africa, and Australia/New Zealand. Those colonies all had much better economic outcomes in modern times than the exploitative colonies.

I think answers here should consider the success of Singapore. Singapore was colonised, is culturally diverse and was quite poor.

Of course, industrialisation of a city state is different to a whole country.

I'm reading a lot of questionable, well, crap here.

While in 1930 Japan was definitely better off than most other Asian countries, it still paled by comparison to most European powers. As my favorite chart shows, Japan's industrial warmaking potential was well behind that of the UK and France, on a level on par with Italy, and dwarfed by the US, Germany, and USSR. South Korea, at that time part of Japan's Korean possessions, can be included in Japan's industrial and economic capability. In addition, Japan was heavily bombed by Allied bombers, and much of its industrial capability was razed to the ground by the end of the war.

In addition to Japan and South Korea, another country that fits into this paradigm is Taiwan. Taiwan too was a Japanese colony, which would seem to lead some credence towards the idea that it was Japanese institutions that paved the way for economic growth. But while many Japanese institutions were retained by the Chinese when the island returned to ROC control after World War II, Taiwanese economic growth is accredited to extremely heavy-handed policies by the central government which was relatively devoid of Japanese influence.

The reason why Japan's economic growth surged after World War II and why people compared Mitsubishi's purchase of Rockefeller Center to Pearl Harbor is a different story than that of Taiwan and South Korea. Namely, it has to do with the Korean War.

While the US had provided substantial aid to Japan after the war to get her back on her feet, for the most part the economy did not begin to recover until the Korean War. Japan was suddenly seen as the last defense line to keeping Communism out of the Pacific, and extremely heavy US investment went into Japan, which was now acting as a logistics platform for the UN intervention into Korea. This resulting inflow of funds encouraged capital expenditure in Japan, and many of the factories and buildings being constructed were of the latest designs, as well as being far more efficient than, for instance, older American factories. Add the addition of Japan to the GATT series of tariff treaties by American demand, and even with the end of the war and an ensuing recession, the sheer attractiveness of Japanese production (due to lower labor costs and new factories) dramatically boosted foreign investment into the country and propelled economic growth. Collaboration by local economic groups into organizations called Keiretsu (a sort of decentralized combination of zaibatsu and a traditional group of companies) gave the benefits of economies of scale ala the the South Korean chaebol and US conglomerates that were necessary to survive in the increasingly globalized world.

This contrasts a bit with the stories of South Korea and Taiwan. In the case of Taiwan, the island of Taiwan itself was relatively unindustrialized, although it had escaped the worst of both World War II and the Korean War. However, the government was in turmoil and clashes between the recent Chinese immigrants and the Chinese/aborigines already on the island were frequent. In addition, the threat of a Communist invasion were almost omniescent.

The Korean war changed all that. Suddenly, the US decided that they could no longer afford to stay out of Asia while Communist forces marched as they pleased. The Seventh Fleet was deployed to blockade the Taiwan Strait, preventing any Communist attack (although a previous failed invasion at Quemoy had already made future attacks unlikely), and substantial US foreign aid-and especially pseudo-protectionist concessions made by the US-made its way to the ROC government.

As for Chiang himself, his government instituted several very important policies that kicked off Taiwan's industry. The first was land reform, which was achieved by essentailly seizing the land from the landowners and redistributing it among his supporters, who then redistributed the land amongst various emigre households. In addition to small scale local agriculture, one of the policies encouraged were what essentially amounted to family industries. So-called light industry, such as canned goods, were encouraged, and friendly US export laws prevented cheap US product from flooding the Taiwanese market and wiping out the nascent industry. The light industry began to consolidate and allow for the development of heavy industry, and eventually electronics-most famously, semi-conductors, a key component in computers. You can even trace this trend-products from the 1970s with "Made in Taiwan" commonly featured trinkets, toys, and small products, while products in the 1980s and 1990s with "Made in Taiwan" were usually computers.

I'm a bit less familiar with South Korea's story in particular, but I did write a paper recently comparing the South Korean chaebol and the rule of President Chung with the technological and economic advancement caused by the zaibatsu and the reforms of the Meiji government. I'd appreciate it if someone could comment in greater detail here.

I think it's just a causal fallacy, how about North Korea? share the same history with the south until 1945, never colonized by Europe, but probably the poorest country on earth.

and both of Japan and South Korea have American Military base, and extremely westernized, especially the political system, arguably it's another form of colonization.

If you look at a broader picture, South Korea, Japan along with Hong Kong, Taiwan, Singapore are the richest countries in the far east, they share some similar characteristics, they are all in the so-called Sinosphere or East Asian cultural sphere, deeply influenced by traditional Chinese culture and values like hard working, put education as priority etc. and they all adopted a modern western style political system.