By examining Korean dirigisme, or system of state-led development, its socio-economic consequences, and its post-1997 reform efforts and trends, this paper aims to suggest how Koreaâs fundamentally undemocratic and exclusionary mode of statism threatens the nationâs long-term socio-economic health, laying out what human-centered development entails and why Korea would want to reconstruct the state and redefine its goals and means on the basis of the concept of people-centeredness. Among other things, the present paper critically looks at the increasing polarization of the Korean society, economy and industrial structure; the current inadequacies of the financial intermediaries and city banks in particular in supplying corporate investment funds or in helping to improve corporate governance by making a long-term commitment through debt-equity swaps and by learning to provide credible credit analysis and monitoring based on accumulated information; and the governmentâs persistent failure in fully enforcing existing laws and rules on insider trading, accounting fraud, and other illegal transactions especially in the wake of the crisis and subsequent reforms. Clearly, reconstructing the state and thereby crafting a democratic and empowering dirigisme constitutes Koreaâs pressing task in its quest for a good society. Such reconstruction of the state does not in any way eliminate national sovereignty; it may just transform the means and purposes of the nation-state without weakening or withering its capacity. The reconstructed state can and does play a positive role in transforming state-society relations, providing social safety nets, empowering financial institutions, inventing a vibrant civil society and actively building democratic institutions to allow for orderly bottom-up changes. The key indeed lies in how to forge what mixture of state and market. As the purpose of human-centered development is to enhance the well-being, economic equity, human dignity, liberty and community of the ordinary citizens, indispensable would be empowering people especially at lower levels both in and outside of government bureaucracies. The delegation of authority needs to occur not just between higher and lower institutions and organizations, but also within each and every organization. If the pattern of heads of institutions running their organizations as their own fiefdom gets simply replicated at lower levels, such de-concentration would be inadequate to serve the needs of ordinary people. If heads of lower organizations were to act only as little czars pursuing their own personal purposes, such de-concentration or decentralization may not have achieved much except a fragmentation and localization of the essentially same, if centralized, spoils system. Thus, institutionalization of democratic values such as public trust and rule of law also needs to occur. Still, dirigiste choice of growth over equity at an early stage of development process may not be easily reversible at a later stage. Dirigiste development and undemocratic governance create entrenched, self-sustaining interests and structures that no amount of reform politics as usual can touch. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]