International Conference of UNPOG (Good Governance for National Develop-ment)17-18 June 2010, Seoul

NATIONAL DEVELOPMENT and GOVERNANCE in KOREA

Yong-duck JungGraduate School of Public Administration

Seoul National University

Copyright © Yong-duck Jung, 2010

Governance Matters.

“Governance has become a central component in any ex-planation of economic and social development…. Good governance remains a requisite for many different forms of growth, whereas the various features of bad governance --- corruption, waste, abuse of power and exploitation of public means for private ends --- tend to drive unfortunate nations into vicious spirals of decline, disruption and destruction" (Tarschys, 2001, in OECD, Governance in the 21st Century: 28, 40).

Purposes

Following the above citation, this study intends to emphasize that good governance is very important for national developments, by illuminating the Korean experiences: i.e.,

• reviewing the national development that Korea has achieved since its foundation of the Republic in 1948;

• analyzing the governance system that Korea has institutional-ized and applied in the national development process;

• evaluating the current state of good governance in Korea; and • searching for the remaining or newly emerging tasks for na-

tional development, and the most appropriate governance sys-tem to achieve them.

Concepts of Governance

“Simply put ‘governance’ means the process of decision-making and the process by which decisions are implemented (or not implemented)” (UNESCAP, www.unescap.org).

Governance is defined broadly here as the process of defining and solving public policy problems, including national development projects.

However, it implies many sophisticated meanings or models: e.g.,- 1 Traditional & 4 New Governance Models (Peters, 1997);

- 6 separate uses of Governance (Rhodes, 1997);

- 5 Modes of the state-society interactions in governance (Pierre & peters, 2005)

- 4 Organizational Arrangements (Jung, et al, 2009) (Table 1);

- 5 Models of Governance (Bell & Hindmoor, 2009);

- 8 characteristics of Good Governance (UNESCAP, 2010) (Figure 1);

and so on.

Authority-based Arrangements (1):-Government hierarchies;-Command &control regulations-Government Agencies

Authority-based Arrangements (2): -Outsourcing;-Principal-agent relationships; -long-term contracts

CollaborativeGovernance Arrangements: -Joint provision of services by public, for-profit, & nonprofit organizations; -Brought together either by mandates or as an emergent Phenomenon

Market-based Arrangements: -Self interest, financial rewards, competition, winners & losers, private property rights

Table 1: Four Institutional Forms (Jung, et al, 2008)

Frameworks for Analyzing Governance in Korea

Korea’s governance evolution is analyzed here according to the (interre-lated but analytically separable) 2 dimensions of governance, including:

• Governing inside the state; and • Governing the state-society relations.

- by applying the traditional and new governance models.

Korea’s current state of governance is evaluated here according to the 8 characteristics of ‘Good’ Governance as normative criteria.: i.e.,

- participatory, consensus oriented, responsive; effective and efficient, equi-table and inclusive; accountable, transparent, & the rule of law (Figure).

Governance Models

6 different uses of Governance (Rhodes, 1997): • The Minimal State• Corporate Governance• New Public Management• 'Good' Governance• Socio-cybernetic Systems• Self-organizing Networks

1 Traditional + 4 New Governance Models (Peters, 1997) (Table):

• Traditional Government • Market Government• Participant Government • Flexible Government • Deregulatory Government

Governing the State-Society Relations

5 Modes of the state-society interactions in governance (Pierre & peters, 2005) • The etatiste model;• The liberal-democratic model;• The state-centric model;• The ‘Dutch governance school’ model; and • The ‘governance without government’ model

5 Models of Governance (Bell & Hindmoor, 2009)

- The state-based, hierarchal or top-down forms of governance remains of cen-tral importance; and

- 4 other modes of governance have been developed to expand the state capacity, including governance through:

• persuasion • markets and contracts;• community engagement; • association

Figure 1: 8 Characteristics of ‘Good’ Governance

Source: UNESCAP, www.unescap.org

Governance Evolution in Korea, 1948-2010

Causes for Governance Evolution in Korea

• Changes of global and local environments of the times, which Korea has to have responded to;

• Reform ideas or models, especially those of advanced coun-tries, to be adopted for gaining legitimacy by isomorphism;

• Path-dependency of the imbedded institutional characteris-tics of the Korean state administration itself; and

• National, organizational, and individual interests perceived by participants in the reform processes.

Stages of Governance Evolution in Korea

Stage 1 (1940s-1950s): Prepared foundation for

a ‘bureaucratic & etatiste mode of governance.’

Stage 2 (1960s-1980s): Institutionalized aggressivley

a ‘bureaucratic & etatiste mode of governance.’

Stage 3 (late 1980-Present): Redirected towards

a ‘new & state-centric relational approaches to governance.’

Stage 1: Tasks and Circumstances

National development tasks to be carried out:

- a post-colonial sovereign nation state-building in 1940s; and

- a post-Korean War reconstruction in 1950s.

Circumstances was extremely unfavorable with: i.e.,

- extreme underdevelopments of human and material re-sources;

- post-colonial and post-war social instabilities; and

- North-South Korean tensions under the Cold War.

Stage 1: Building Foundations for Bureaucratic Governance

Pursued a modern bureaucratic state administration; • It was difficult to realize because of the unfavorable circum-

stances, • Resulted in being far from the ideal type of modern bureau-

cratic state administration,

- retaining many pre-modern elements of administrative cul-ture, institution, behavior, etc.

Stage 1-1: Governing within the State

‘Government Organization Act’ legislated (1948), establishing first 25 central administrative apparatus.

• Organizational differentiation was not enough to be responsive to the de-mands of the times.

- respecting a doctrine of ‘administrative simplification’ (even during the Ko-rean War);

• Organizational integration was not enough to steer effectively development planning and implementing;

- instead mostly relying on personal charisma or relationship rather than institu-tions or the rule of law.

Adopted mostly the procedural norms or customs of the traditions: e.g., the Confusion governance of Chosun Dynasty or the Imperial Japanese garrison state (1910-1945).

Meritocracy was emphasized. In practice, however, staffing was conducted mostly through patronage than meritocracy.

Resulted in a pre-modern administrative state.

Government Year Ministry Agency, Adm., Outer Bureau

Commission, Committee

Total(Cabinet Member)

Rhee Sygman(1948-1960)

1948 16 6 3 25

1955 14 13 1 28

Chang Myun(1960-1961)

1960 13 3 4 20

Park Chung-hee(1961-1979)

1979 20 19 3 42

Chun Doo-hwan(1980-1987)

1987 22 16 1 39(22+1*)

Rho Tae-Woo(1988-1992)

1992 24 17 0 41(24+2*)

Kim Young-sam(1993-1997)

1997 21 15 1 37(21+2*)

Kim Dae-jung(1998-2002)

2002 22 16 9 47(21)

Roh Moo-hyun(2003-2007)

2007 22 18 9 49(21)

Lee Myung-Bak(2008- )

2008 17 18 5 40(17+1*)

Table 2: Number of Central Administrative Apparatuses in Korea

Stage 1-2: Governing the State-society relations

Maintained and strengthened the post-colonial and post-war ‘overde-veloped’ repressive apparatus, resulted in a ‘hard state.’

Maintained and initiated forming the state corporatist intermediate organizations: e.g.,

- Korea Chamber of Commerce & Industry (1884), The Korean Pharmaceutical As-sociation (1928);

- Federation of Korean Trade Unions (1946), Korean Federation of Teacher's Associ-ations (1947); and

- Mass mobilization systems: e.g., anti-communist movements initiating organiza-tions.

However, self-organizing interest or pressure groups were under-developed.

Resulted in a strongly etatiste top-down mode of governance.

Stage 2: National Tasks and Circumstances

National Tasks:• Rapid industrialization to ‘catch up’ the advanced countries

and to compete against North Korea:

- by initiating and implementing state-led industrial policies, including the ‘5 years economic development plans.’

Circumstances: • Was able to use the previously accumulated substantial hu-

man resources due to high enthusiasm for education; and

- developed basic infrastructure and import substituting in-dustries.

Stage 2: Institutionalization of Governance

Pursued more aggressively institutionalization of a modern bureaucratic state administration.

• The end result was not a genuine Weberian bureaucratic state but a sort of ‘Asiatic administrative state,’ along with:

- the underdevelopment of representative democracy;

- the deferred local autonomy for 30years;

- the extreme executive dominance and centralization to make an ‘imperial presidency’; and

- many intermediate organizations of state corporatism.

Stage 2-1: Governing within the State

Institutionalized not only lots of functionally differentiated apparatus to support effectively substantive industrial policies;

• but also, various core executive apparatus for functional integration to facilitate effective planning and coordination, including the Presidential Secretariat (the Blue House) and the central agencies (EPB, BAI, MOGA, MOHA, GLA, etc.).

Institutionalized tight standard operating procedures: e.g.,• a modern Budget and Accounting Act (1962) made it possible the budget

cycle to be checked more tightly by EPB and BAI as well as the National Assembly;

- also checked other powerful central agencies, including MoGA(organizing, staffing), MoHA(central-local relations), GLA(legislation), etc.

A merit-based career civil service system was institutionalized more posi-tively, to provide with capable human resources for the state-led industrial-ization.

Stage 2-2: Governing the State-Society Relations

Institutionalized a meso-level state corporatism: • Maintaining and forming a single peak organization in each policy areas: e.g., - Federation of Korean Industries(1961), National Agricultural Cooperative Federation

(1961), National Federation of Fisheries Cooperatives (1962), Korea Employers Fed-eration (1970), National Livestock Cooperative Federation (1981), and other ‘affili-ated organizations,’ so-called "associations," "confederations," "unions,” and so on.

- Supported them by providing subsidies and monopolistic rights of regula-tions to them.

- Resulted in a strong top-down state-society relations, with (not a Weberian insulated but Asian style) inter-connected state-society relations.

cf.) ‘Embedded autonomy’ (Evance, 1995)

Used mainly regulatory policy instruments, including ‘administrative guid-ance’:

• Average 37% of total administrative functions were conducted by regulatory measures (MoGA, 1994).

The ‘overdeveloped repressive apparatus maintained under the Cold War: • resulted in utilizing effectively ‘hard power’.

Stage 3: Tasks and Circumstances

Circumstances:

-Achieved democratic transition (1987) & consolidation by pass-ing the ‘two turn-over test’ (in 1997 & 2007); and

reviving the local autonomy (1991) ‘deferred’ for 30 years.

National Tasks:

-Taking care of dysfunctions caused by the ‘compressed’ indus-trialization and democratization;

-joined OECD (1995) and G20 (2009), ranked with the 13th in GDP, while faced to financial crisis (1997) and low fertility and ageing society;

-facing to the expansion of public participation and public ser-vice demands, while lacking coordination capacities through mutual adjustments and collaboration between groups or organi-zations, bringing about high decision-making costs.

Stage 3: Institutionalizing Governance

Reforms have been redirected toward a ‘de-bureaucratized democratic state administration.

• by adopting the NPM and New Governance Models.

However, the reform goals have not been achieved fully with lack of institutionalization in terms of taking roots and real practicing.

Stage 3-1: Governing within the State

Reforms (adopting NPM and New Governance models) were conducted to make the state administration to be more democratic and efficient.

- pursued continuously deregulation and decentralization.

• Democratization caused government growth. - by creating new (mostly committee type) administrative apparatus to promote

‘organizational pluralism’ by Democratic Government.

- Downsizing efforts conducted applying the idea of ‘super-department system’ by Conservative Government.

Reforms of ‘from procedure to result’ conducted:

- trying to reduce the central agency’s regulations on organizing, staffing, budgeting over line organizations

- restructured ‘3-layer pyramid-type organizations to ‘2-layer headquarter and teams.’

Performance-, open competition & contract-based personnel management system was institutionalized:

- dismantling the ‘meritocracy, rank & seniority-based, and closed career civil ser-vice system.’

FunctionChun Doo-Hwan

(1981-1987)Rho Tae-Woo(1988-1992)

Kim Young-sam(1993-1997)

Kim Dae-jung(1998-2002)

Roh Moo-hyun(2003-2007)

Public ServiceProvision

M Labor (81); M Sports(82)^

Meteorological A (90) National Police A (90)

Adm./M of Environment (80/90)Coast Guard(96)

Food & Drug A(98) M of Gender Equality & Family (01) Cultural Heritage A (99)C Youth Protection (99)*

National Emergency Management A (04)

Constitutional-ism, Democracy,

andHuman Right

Promotion

Social Purity C (80)#

Constitutional Court (88);Broadcasting C (88)*

Ombudsman (94)* National Human Rights C (01)*

Economic PolicyCapability

Improvement

International Cooperation C (83-86)

Statistics (90)

Fair Trade C (94) M Information & Communication (94)* M Maritime Affairs & Fisheries (96)*Small & Medium Business Adm. (96)

Financial Supervisory C (99) Small & Medium Business C (99)

Administrative Capability

Improvement

Government Infor-mation Ag. (99)*

National Emergency Planning C (98)*C/M Planning & Budget (98/99)* Civil Service C (99)*Independent C Against Corruption (02)*

National Assembly Budget Office (04)Defense Acquisition Program Adm. (06)Multifunctional Admin. City Construction A (06)National AssemblyResearch Service (07)

Table 3: Central Administrative Apparatuses Established since 1980s

Stage 3-2: Governing the State-Society Relations

The meso-level state corporatism has been dismantled.• Competitive intermediate organizations have been emerged: e.g., - Korean Teachers & Educational Worker's Union (1989) to compete Korean Federation of

Teacher's Associations (1947);

- Korean Confederation of Trade Union (1995) to Federation of Korean Trade Unions (1946).

- resulted in making either the state corporatism nor the newly formed tripartite sys-tem (1998) to be hardly practiced.

• The formerly state corporatist organizations (e.g., KFCA) achieved more auton-omy from the state: e.g., by self-selection of their personnel.

• Civic groups has been dramatically expanded (Figure 2)

Deregulation policy has been conducted continuously.

Repressive apparatus has been reduced in the post-cold war era. • Making the Korea state to be a ‘soft state.’

Democratic transition of 1987 and the Financial Crisis of 1997 has enforced the Ko-rean government to adopt more and more the state-centric relational ap-proaches to expand the state capacity: e.g.,

• Persuasion, markets and contracts, community engagement; association.

The Current State of ‘Good’ Governance in Korea

Good Governance in Korea: (1) Participation

Representative democracy: • democratic transition (1987), and consolidation (by passing

the “two turn-over test” in 1997 & 2007 and reviving the local autonomy in 1991 & 1995);

• evaluated as “the top in Asia” (Thompson, 1996).

Freedom of association & expression: • Ranked as a “free society” (www.freedomhouse.org); • “perfect democracy” (ranked w/ the 28th among 167 countries)

(World Democracy Index (EIU, 2008); • Exponential increase of civic groups (Figure 2).

Figure 2: Growth of Civic Groups in Korea, 1940s–1990s

Source: Jung, 2006: 281.

Good Governance in Korea: (2) Rule of Law:

Fair legal frameworks enforced by impartial and independent judiciary:

• Substantially improved by establishing the Constitutional Court (1988) and other measures since democratic transition (Ginsburg, 2003): e.g.,

- CC has declared 228 articles of laws unconstitutional and revoked about 160 governmental actions as of 2002; and decided the (un)constitutionality of the National Assembly’s ‘impeachment on President Roh’ (2004) and the ‘Capital Relocation Bill’ by the Executive Branch, etc.

Impartial & incorrupt police force:

• Substantially improved.

- cf.) Cases of Illegal software copying: Korea ranked w/ the lowest 7 th among 30 OECD member countries; Among them, 2,945 cases con-ducted by police.

Good Governance in Korea: (3) Transparency

Decision-making & its enforcement in a manner that follows rules and regulations:

- ‘Administrative Procedure Act’ (1996, 2002).

Freely available, directly accessible, enough, & understandable information pro-vided:

- ‘Public Information Act’ (1996)

- Achieved top level E-democracy due to the top level ICT developments: e.g., .. Broadband Penetration Rate: ranked 4th (OECD, 07); Broadband Subscribers per 100 habitants: 5th

(OECD, 09); Digital Opportunity Index: 1st (ITU, 05~07); E-Participation Index: 1st (2009, UN);

.. arrived at the last ‘seamless integration’ stage of E-government development (UN-ASPA, 2002) in 2005; E-government development index: 1st (UN E-government Survey, 2010)

.. cf.) substantial ‘digital divide’ between analogue and digital populations remains: e.g., internet users among the whole population (74%) and the minorities (35%) (KADO, 08)

- Evaluated as decreasing ‘Freedom of Expression’ (Worldwide Press Freedom Index): 31st <1st in Asia>(2006), 39th <3rd> (2007), 47th <3rd> (2008) (Reporters Without Bor-ders).

Good Governance in Korea: (4) Responsiveness

All stakeholders served within a reasonable timeframe: • Improved significantly since the democratic transition (1987):

- Especially, reviving local autonomy system (1991) has made the local governments to respond effectively to the civil complaints.

• But, facing to a dilemma situation due to the voters’ contradictory expecta-tions of the ‘small government’ as well as more public services:

• Development projects conducted previously on ‘selection and concentration strategies’ created many public policy problems: e.g.,

.. the need to redevelop poorly planned urban areas; restore damaged and polluted natural environ-ments; improve the quality of life for low-wage workers; and so on.

• Also, there are newly emerging public policy problems: e.g., .. to build social safety nets for the failed to adapt to globalization; needs to reduce education costs

while enhancing the effectiveness of public education, and building childcare facilities to help working mothers to address the population aging and low fertility.

Good Governance in Korea: (5) Consensus-oriented

Mediation of the different interests to reach a broad consensus on public interest: • Given the rapid pace of democratization in the past 2 decades, an effective governing sys-

tem for expanded citizen participation & civic engagement has yet to take root, creating numerous conflicts between social groups, the government and individuals/social groups, government agencies, the central and local (or local and local) governments, and so on.

- leading to delays in public policy-making or to suspensions of policy implementation, dam-aging national competitiveness.

• Mutual adjustments systems of pluralized society was not yet institutionalized.

- meaning the ‘liberal democracy’ model of governing not yet institutionalized.

A broad and long-term perspective on national development, based on understanding of the historical, cultural & social contexts:

• Democratization has been deconstructing the ‘plan rationality’ which the Korean state exercised based on the strong stateness during the rapid industrialization period, but has not yet built a new system to build a broad and long-term consensus under the situation of the strong state and strong society.

- The Korean tripartite system (established in 1998) has not worked effectively, mainly due to the splits of the peak organizations.

- meaning the ‘state-centric mode’ of governing not yet institutionalized (Pierre & peters, 2005).

Good Governance in Korea: (6) Equity & Inclusiveness

All members feel they are not excluded:• Inequality of income and wealth distribution is not severe even after the

‘compressed’ economic growth: ranked 25th in terms of Gini coefficient,

- though many feel unfairness mainly due to “too much competition” and “perception of high corruption” (Sohn, 2010).

Especially, the most vulnerable have opportunity to improve their well being:

• Initiated affirmative action programs to make the ‘minorities’ to be repre-sented more in the public sector: i.e., women, the disabled, science & technol-ogy experts, outsiders from the Capital Region, etc.

• But, need more improvements: e.g., - Gender equality: 115th (2009; WEF) .. Women’s employment rate is lower than that of men by 30%; .. Women’s wage is lower than that of men by 38% (the lowest among the OECD member

countries) (OECD, 2010); and .. Women/total civil servants: 26% (2008); women/total higher civil servants: 2.1% (2008)

Good Governance in Korea: (7)Effectiveness & Efficiency

Producing results to meet the social needs: - GDP: ranked 12th (2005); 15th (2009); per capita Purchasing Power: 52th (08, CIA)

- QOL (Smith, 2008): e.g., .. using improved water: 92%; fruits & vegetable consumption (top 2nd level group);

.. average life expectancy: 40th (78.72 Years) (2009, CIA).

- social safety net: institutionalized social insurance programs, facing to financial deficit

- disasters or risks: e.g., the ‘fires of sub-ways & the national treasure ‘South Gate,’ the sinking of oil tankers, etc.

- Newly emerging tasks such as aging society and low fertility, jobless for the young, etc.

Sustainable use of natural resources and the environmental protection:- CO2 emissions per capita: raked 21th (11 tonnes)

- The ‘Green Growth’ Policy has been conducted aggressively since 2009.

- Policy follies, fiascos or disasters: e.g., .. the liquidity crisis (1997);

.. Spending a huge amount of budgets only to fail to achieve the ends, or to create severe side effects: e.g., the constructions of the Chungju International Airport, the Sihwa Lake, the promotion of the Cable TV Networks industry, the enforcement of the National Pension Sys-tem, etc.

Good Governance in Korea: (8) Accountability

Being accountable to the public and the affected: • Corruption: ranked with the 39th among 180 countries on CPI in 2009 (TI)

- Though administrative corruption on street-level bureaucrats greatly declined (Park, 1999), political corruption hardly does: e.g.,

.. 2 former Presidents were imprisoned for receiving bribes: Chun ($280 million); Rho ($600 mil-lion) (Chang, 1999; Quah, 1999).

.. The families of 3 former Presidents (Kim YS, Kim DJ, and Roh MH) were involved in illegal private political funds or tax evasion.

- The success of a politicians relates to his fund-raising ability since a tremendous amount of money is required during the election campaign: e.g.,

.. estimated that the candidates would need around $2.7 million for the general election of 2000 (Chosun Ilbo, 2000.3.18).

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Future Tasks for Sustainable Development

Take care of the dysfunctions caused by the ‘compressed’ industrializa-tion & democratization;

Respond effectively to the newly emerging public policy problems: e.g., - the economic difficulties after the American financial crisis (2008),

- the low fertility and ageing society,

- strengthening social safety nets, etc.

Overcome dichotomous ways of thinking for paradigm shifts: e.g., - from ‘growth or distribution’ to ‘growth & distribution’;

- from ‘construction or preservation’ to ‘green and growth’;

- from ‘the state or society’ to ‘the state & society’; and so on.

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Future Directions of Governance Institutionalization

The government is expected to respond effectively to the existing and newly emerging tasks,

- without the state growth in terms of quantitative size, which is not sup-ported politically.

It is necessary to reduce high decision-making costs,

- by overcoming public conflicts and disputes.

Considering such expansions of public service demands and public con-flicts, Korea needs to institutionalize aggressively collaborative gov-ernance where the state, civil society, and the market address public pol-icy problems through mutual adjustments and collaboration.