For the Latin American economic historian, you have just asked *the* question. There is an entire literature devoted to the Latin America vs. East Asia development. What one believes about this question says rather a lot about one's preferred models of economic development, which themselves have deep roots in politics and economic theory. So buckle up, there are a lot of different ideas here. Most of them are developed more broadly than Mexico vs. South Korea specifically.

First: This is not a 1980s-present story, but a much longer run thing. Almost all major countries in Latin America started the 1950s richer than South Korea, Taiwan, Singapore and HK (and not far behind Japan), but by 1990 were all considerably poorer, including relatively well-off countries like Argentina and Uruguay. This divergence has continued largely until today, and certainly until the end of the 20th century, where this subreddit's chronological boundaries lie.

One debate emerges directly from how you've asked the question: Was South Korea's extraordinary growth the result of an "economic plan"? If so, what was that plan, and can it be copied by other countries, or does it rely on preconditions that are true in Korea but potentially false elsewhere?

Early analysis of the East Asian "miracle" focused on the contrast between the "export oriented" model of SK (and Taiwan, and HK, Singapore, and the great-grandparent, Japan) and the inward-facing "import substitution" model of Latin American countries. This is the sort of view advanced by Bela Balassa in the earliest debates about the differences between the two regions. This view hinges on the role of export discipline: a good which is exported must be internationally competitive on price and quality. Export markets are enormous, and can achieve almost any level of scale. By contrast, domestically produced goods can always be made profitable simply by raising tariffs high enough, even if the quality is terrible, and the scale of the industry is limited by the size of the domestic market, which is not very large in a relatively poor country. Those countries which maintained an export focus outperformed those whose objective was to turn away from international trade by substituting domestic manufacturing for imports.

The Balassa view was very influential, as expounded in the World Bank's East Asia Report (the "miracle" report) but has been critiqued on a few points. First, it isn't clear at all that the South Koreans pursued a radically different policy regime than Latin American countries. The difference between a successful big export push and a failed one is not necessarily about the inputs; South Korea used plenty of protective tariffs and direct state intervention in their policy mix, and the overwhelming success in exports came afterwards. Latin American countries would have been only too happy to have their manufactured products bought up in export markets, but they were mostly noncompetitive on either price or quality. (This is less true for Mexico than for many LA countries, because of relatively low wages, dense markets, and close proximity to the United States. Manufactured exports have been a feature of Mexican industrialisation to a larger extent than, say, Argentina or Brazil.)

The role of the state, including industrial policy (protective tariffs, subsidies, targeted infrastructure, "picking winners," exchange rate manipulation, and so on), is one of the major bones of contention. On one side, you have scholars like Ha-Joon Chang who argue (in Kicking Away the Ladder) that there is a known path to development: target a few industries in which your country might eventually be able to compete, protect them in their early years with tariffs and subsidies in order to bootstrap yourself to a higher level of technology and productivity. (This is the Alexander Hamilton/Freidrich List school of infant industry development.) Chang argues that if this has not happened in countries, it is largely because they have been prevented from following this path by international organisations (the WTO, IMF, World Bank, etc...) who make these policies the infamous "conditionalities" that developing countries have been made to abide by, either in trade agreements or in exchange for debt relief. South Korea is the absolute central case for his analysis, which he holds up as a clear demonstration that "heterodox" policy intervention in SK has been overwhelmingly successful, whereas "orthodox" Washington Consensus policies have largely failed elsewhere. A similar, though more nuanced and less firebreathing position is taken by Robert Wade in "Governing the Market: Economic Theory and the Role of Government in East Asia's Industrialization."

This is related to disequilibrium theories of growth championed in an earlier era by Albert Hirschmann: stagnant economies need to be forced out of their low-growth equilibrium by a transformative push. (For an excellent exposition that is quite reflective and self-critical, his "The Political Economy of Import Substitution in Latin America" is excellent, if now quite old.) If the market does not provide such by itself, then it can be provided by government support. Once the beginnings of such a push are successful, they can transition into self-sustaining growth if the "imbalance" in the leading sector triggers complimentary investment in other sectors, the so-called "linkages" between investments. However, this process is vulnerable both to political economy concerns, and also to the external constraint: if imported goods are necessary to continue the process of import substitution, then there must be something exported on the other end to earn foreign currency, or else the system will collapse. Once the system passes into "maturity," this can be earned by selling the manufactures themselves. But if that point of export competitiveness is never reached, then the process can stall out, as it did in much of Latin America.

Dani Rodrik (in "Getting the Interventions Right" provides an analysis of what went right in Korea that centres on the correct targeting by the government of this process: the South Koreans made decisive and wise interventions that provided export-oriented industries with key pieces of infrastructure and subsidised important-but-undeveloped sectors whose participation was necessary to the successful "big push" ex post, but which were not immediately or obviously profitable ex ante. Without a "coordinating" state able to identify these bottlenecks and provide appropriate support and subsidies, an export boom will only occur when by coincidence all of the parts of the process are simultaneously profitable, whereas with such an industrial policy, it can be engineered. If other countries have failed to do so, it is because they have gotten the interventions wrong: they have supported industries, but failed to identify and remove the key bottlenecks to export competitiveness, either because they lack the expertise to do so, or because weak political economy institutions direct their efforts into rent seeking.

For all these theories, the important part is that the state in SK (and Japan, and Taiwan, Singapore, HK, and perhaps now China) took an interventionist stance and did what was necessary to organise a "big push" industrialisation program. In that mirror, the problems in Latin America are about institutions and state capacity: how powerful is the state, and how do they decide what do to? Is the state strong enough to take the necessary actions, and also able to resist the pressures of incumbent interest groups to scupper the process to their own benefit?

For a recent analysis of this question for East Asia by a top scholar, try Robert Wade: (https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2018-101.pdf ) He goes over many of the underlying factors behind the peculiar success of some East Asian states. There is the role of Japanese colonialism following the Meiji restoration, which not only created an authoritarian-developmentalist model for EA states, but also literally laid the groundwork in SK and Taiwan in the form of schooling reform and infrastructure building during the colonial period. There is also the role of the United States in during the cold war, which provided support for states seen as key battlegrounds in the war against Communism (which SK and Taiwan clearly were). What exactly about US support was critical is harder to say, and it is not entirely clear (as the mysterious Pseudoerasmus points out) that Japan/SK/Taiwan enjoyed particularly privileged trade relationships with the US.

Wade also reiterates a major point, which is that there were substantial land reforms in South Korea which are generally interpreted as providing a broad base of support for market-friendly reforms by neutralising inequality-driven opposition of the kind that has perennially plagued Latin America. One might note that American influence has largely been *for* such land reforms in East Asia, but decisively *against* them in most Latin American countries. But we must also be wary of assigning too much agency to the US; domestic actors are the driving forces in most of these decisions, and the US does not always get its way.

(cont'd)