Despite the billions of dollars spent on development assistance annually, disagreements persist about the impact of foreign aid on developing countries. This column explores a historic episode in Korea, when missionaries from two Protestant denominations fared quite differently. Presbyterian missionaries empowered local Korean churches to aim for self-governance, while Methodists employed a hierarchical structure with a centralised church administration. Presbyterians achieved greater success, suggesting that local citizens in any aid context should be treated not as passive recipients, but as active participants in developing their own communities.
According to the OECD’s Development Assistance Committee, the size of Official Development Assistance (ODA) reached $224 billion in 2023 (OECD 2024). Despite the massive size of ODA, there are doubts about its effectiveness for developing countries. Many studies show that aid has no significant effect on economic growth (Lohmann et al. 2015). In some cases, aid has even led to negative results, particularly in terms of increasing inequality (Herzer and Nunnenkamp 2012). The question of how best to support developing countries remains a pressing issue, with diverse opinions on how to manage aid programmes efficiently. In this context, history offers valuable lessons that continue to inform modern policy. This column focuses on Korea, a country whose southern part is now recognised for its remarkable economic growth.
Figure 1 Nighttime light intensity in Korea
Source: Ashraf and Weil (2024)
Which part of Korea was better off in 1930 – the North or the South?
The Korean Peninsula is a prime example of stark differences in nighttime light intensity across two political systems, with communist North Korea rather dark and capitalist South Korea shining brightly because of a much more vibrant economy. This was not always the case. A century ago, Pyongyang, now the capital of North Korea, was called the Jerusalem of East Asia because of its many Protestant churches. Today, few people know about these churches, as the communist government has since suppressed Christianity.
In 1930, as we discuss in our recent work (Becker and Won 2024), the literacy rate in the northern part of Korea (modern-day North Korea) was higher than in the southern part (now South Korea). Figure 2 highlights this, showing a higher concentration of literacy rates in the North, while Figure 3 illustrates the distribution of Protestant churches across the Korean peninsula. Regions with more Protestant churches tended to have higher literacy rates, suggesting that churches might have played a role in boosting literacy. Literacy is crucial for economic development because of the importance of human capital for economic growth. Economic historians often focus on literacy rates, as a larger number of people who can read and write in their own language leads to the creation and sharing of knowledge, which drives economic progress. In short, Protestantism might have helped lay the foundation for Korea’s economic development.
Figure 2 Literacy rates in 1930 (town-level data)
Note: The map displays the literacy rate in the Korean language per 1,000 inhabitants, at the town-level. The shape file was kindly shared by Dr Jonghyuk Kim.
Data source: Census of Korea (Chōsen Government-General 1932).
Figure 3 Methodist and Presbyterian churches in 1930 (town-level data)
Note: Towns marked in blue indicate the number of Methodist churches. Towns marked in red indicate the number of Presbyterian churches. There are 24 towns out of 2478 towns with a presence of both Methodist and Presbyterian churches. The shape file was kindly shared by Dr Jonghyuk Kim.
Data sources: Yearbook of Methodists in Korea (1931), and Yearbook of Presbyterians in Korea (1941).
However, Figure 3 exposes something unusual. Typically, Presbyterian churches were concentrated in the northern part of the peninsula, while Methodist churches were located primarily in the central part of Korea. Can it be true that Methodist churches did not coexist with Presbyterian churches in the same areas? If this is the case, why did Presbyterian-dominated areas have a greater impact on literacy rates? And what lessons can we learn from these figures? Let’s dive deeper!
Birth of Korean Protestantism
The impact of missionaries is a hot topic in economic development (see Becker et al. 2021 for a survey of the role of religion in economic history). Many studies not only highlight the positive effects of missionaries on educational achievement (Nunn 2014), knowledge diffusion (Bai and Kung 2015, Ma 2021), and the promotion of democracy (Woodberry and Shah 2004), but also explain the mechanisms through which Protestantism in particular positively influenced human capital accumulation (Becker and Woessmann 2011) and reduced the gender gap (Becker and Woessmann 2008). However, the impact of missionaries on former Western colonies is often unclear: missionaries typically cooperated with or were part of the colonial power, making it difficult to distinguish whether these positive effects came from the missionaries themselves or were simply part of a broader colonial influence (Jedwab et al. 2022).
In this context, Korea presents a fascinating case because it was annexed by Japan in 1910, meaning it was not a colony of the Western world. This distinction allows researchers to more clearly separate the effects of missionary work from those of colonial rule. Furthermore, missionaries likely had to be cautious in their actions, as they couldn’t expect support from their home countries, given that Korea was not under their legal jurisdiction. In fact, there was tension between missionaries and the Japanese government, as Japanese authorities wanted missionaries to focus solely on their religious work and avoid getting involved in political or social activism (Park 2003).
Korea has a unique history when it comes to Christianity. Many church historians trace the beginning of Korean Protestantism to the Sorae Church in Changyon County, Hwanghae Province. The founder of this church, Shangryun Seo, was a merchant who traded Korean ginseng with China. During a business trip to China, he fell ill and was helped by Western missionaries, who nursed him back to health. Grateful for their assistance, Seo converted to Protestantism, marking a significant moment in Korean history. He later became involved in translating the Bible into Korean and even attempted to smuggle copies into Korea. The Korean government had banned Christianity, forcing Seo to establish a small church, called Sorae, in rural Changyon County in 1883 (Oak 2016, Park 2023).
Missionaries in Korea
The first missionaries from the Western world, Horace Newton Allen and Horace Grant Underwood, arrived in Korea in 1884, believing that there were no Protestants in the country. However, Seo sought out Underwood to ask him to baptise a member of the Sorae Church. Underwood was surprised to learn that there were already Protestants in Korea. When they embarked on their first missionary trip, Underwood decided to visit northern Korea first, an experience that influenced the direction of mission work in Korea. First, the northern region was considered a suitable area for mission work because people had shown an interest in Protestantism already. And they had successfully established self-sufficient churches, which contributed to the adoption of the so-called Nevius Plan.
The official mission strategy of the Presbyterian Church, the Nevius Plan was a church-planting approach developed by John Livingston Nevius that advised new churches to aim for self-governance, financial independence from foreign support, and indigenous missionary work. The role of foreign missionaries was limited to training and guiding local Christians (Kim and Kim 2015). The first generation of Presbyterian missionaries was greatly influenced by the Nevius Plan. Underwood, a Northern Presbyterian from the US, was an enthusiastic advocate of the Nevius Plan, particularly due to his experience in Korea. The spirit of the Nevius Plan in Korea is also evident in “Our Education Policy”, a document written by William Baird, the founder of Soongsil University. Baird emphasised self-sufficiency, the development of religious leaders to serve in rural areas, and the teaching of the Korean alphabet as part of this mission (Christian Culture Institute of Korea 2013). Many prominent Presbyterian churches were located in northern Korea, and key cities in the region were deeply influenced by Presbyterian activities. This influence is one of the main reasons that Pyongyang was once called the Jerusalem of East Asia.
The North Korean miracle
The combination of two factors – missionary work starting in the North and the Nevius Plan – made a significant impact. Some research shows that Protestant churches, in general, contributed to an increase in literacy rates by the late 1930s (Becker and Won 2021, Izumi et al. 2022). Additionally, when comparing Presbyterians and Methodists, the Presbyterians achieved greater success in terms of human capital accumulation owing to their unique mission strategy.
Comparing the impact of Methodists and Presbyterians is straightforward because they made an agreement on which regions each denomination would oversee. This can be seen in Figure 3. The two denominations adhered to the so-called Comity Agreement of 1909, meaning there were no Presbyterian churches in areas managed by the Methodists, and vice versa, with a tiny number of exceptions in large cities where both Presbyterians and Methodists were present. This historical arrangement simplifies the analysis, as it allows us to directly compare the influence of each denomination in their respective regions.
This difference was likely due to the Nevius Plan. The focus on self-management created a strong incentive for Korean Presbyterians to become self-sufficient as soon as possible. To sustain their churches, it was essential to attract more followers, so they engaged in educational activities to bring more people into their congregations. The legacy of the Nevius Plan is still evident today. Presbyterian churches are led by pastors with the agreement of the church elders, whereas in Methodist churches, ownership is centralised under a central governing body. In short, the Methodist Church has a more hierarchical structure than the Presbyterian Church.
Conclusion
In conclusion, this historical episode offers valuable lessons for modern aid policies. Today, there is a strong emphasis on knowledge diffusion in developing countries (Cuntz et al. 2024, Oberfield and Buera 2016). The case of Korea provides a meaningful example of efficient knowledge distribution. When Western missionaries arrived in Korea, the local people were not merely passive recipients; they actively participated in mission work. This approach led to more significant achievements, particularly in terms of human capital accumulation. In fact, the direct comparison between Presbyterian missionaries, who tried to empower local Korean churches, and Methodists, with their more hierarchical structure that depended on the central church administration, shows the higher success rate of the Presbyterian strategy.
Local citizens in any aid context should not be passive recipients, but should play a central role in developing their own communities. With this in mind, it is crucial to consider what incentives will motivate local people and how to engage them as active participants in development projects.
Source : VOXeu
