This dissertation explores the relationship between politics and economic policy. More precisely, the causal relationship between the two factors is such that the choice of a particular economic policy is typically determined by politics, rather than by economic necessity. In most economic situations, there is no single right solution to an economic problem; rather, several alternative policy choices will be available to the policymakers. Yet, no matter the quality of various economic policy choices, the ultimate "winner" is commonly chosen, not because that particular policy is the best economic solution to the problem, but because it garners the greatest support from the political elites. The dissertation contends that the political determinants of economic decisions cannot be understood without considering the social, legal, and institutional contexts within which political debates take place, since politics does not occur in a vacuum. Rather, political processes are contingent on, and limited by, rules, conventions, institutions, and customs that are set by a given society. Taking the Asian Crisis of 1997 as the starting point of the analysis, this dissertation explores the issue of corporate governance using the framework of the politics-policy nexus. It begins by arguing that the mainstream criticism of the Asian crisis was motivated primarily by political exigency rather than by economic efficacy. In particular, the severe censure of neoliberal policymakers and academics on the Korean corporate governance system and industrial policy was driven by political and economic ideology. Using the framework based the concepts of path dependency, institutional evolution, scientific paradigm shift, and politics of crises, the dissertation explores the possibility of contextualization of development policy.