The 'economic miracle' in South Korea over the past three decades has been supported by a corresponding increase in electric generating capacity in a relatively short period of time, accomplished in a country with limited domestic energy resources and large commitments of capital to export-oriented industries. Capacity increased nearly twelvefold in a 12-year period during the formative stages of Korea's development from 1962 to 1973 and more than fiftyfold from 1962 to the present time. For capital- and energy-short developing countries, the Korean experience is a good example showing the contribution of pricing-related initiatives to the development of the power sector. Besides setting prices at a level sufficient to provide resources for the power sector, a number of initiatives designed to reduce the cost of electricity supply were implemented. More recently, implementation of time-of-day pricing and enactment of legislation aimed at improving the performance of public enterprises significantly contributed to the efficiency of the power system.
