[EAI Working Paper] 2022 Presidential Success Conditions Series: ③ Share Power and Govern with a Long-Term Perspective

1. Improving the People's Livelihoods

The expectations of the people for a newly inaugurated president are simple. As the president responsible for the nation's finances, they hope the economy of the community will run well and social stability will be achieved. Through this, they expect the president to govern in a way that improves the livelihoods of each household and individual, and allows for hope for the future of the community and the individual. To this end, the president must, above all, devote considerable effort to economic and social policies. So, how can one succeed in economic and social policies? It is essential to meet the conditions for formulating good economic and social policies, and also to establish a solid institutional foundation to make this possible.

So, what are the conditions for formulating good policies? Let's examine the stages of policy formulation step by step. Policy formulation goes through five stages: 'policy agenda setting' ⇀ 'policy goal and timeframe setting' ⇀ 'policy instrument selection' ⇀ 'policy decision' ⇀ 'implementation and monitoring.' Therefore, let's first look at the conditions for presidential success at each stage of policy formulation.

Is it enough to go through the stages of policy formulation well? In addition, an institutional foundation for formulating good policies must be established. Therefore, we must then examine the institutional foundation for formulating good policies. This institutional foundation remains even after the president's term and is therefore even more important for the success of the next president. The institutional foundation consists of three stages: first, setting the functions to be performed by the government; second, allocating these functions among the entities performing them; and third, finally operating them. The discussion above is summarized in <Table 1>. This chapter aims to present the detailed success conditions by dividing these processes into a total of eight stages.

2. Design the Process of Formulating Good Policies

First, consider the optimal timing for agenda selection.

In the early period of a president's inauguration, public support is typically high. This is the opportune time to pursue reforms. Specifically, the term of the 20th president began on May 10, 2022, and by mid-2023, one year into the term, the April 2024 general election for the 22nd National Assembly cannot be ignored. Considering these temporal characteristics, reforms that cause significant conflict must have their implementation plans finalized within one year of inauguration. A year is not enough time to appoint key political officials such as ministers and discover and establish implementation plans for new tasks after inauguration.

<Table 1> Approach to Finding Conditions for Success in Economic and Social Policies

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Tasks already included in presidential campaign pledges can shorten the time required for implementation. However, in Korea, most presidential pledges are made by the campaign teams. Some pledges are made by a few individuals without deep consideration, rather than being the result of long maturation within the party. Numerous pledges are included based on the expectation that they will help secure votes, even with the knowledge of significant side effects or low feasibility. Therefore, the process of concretizing a candidate's pledges into '100 National Tasks' by the Presidential Transition Committee is very important. However, it is difficult to thoroughly discuss many tasks in less than two months. The transition committee should only decide the basic direction, and the specific implementation plan should be finalized after inauguration through consultation with stakeholders. The president's active involvement is necessary in this coordination process, which makes it difficult to pursue many tasks simultaneously in the early part of the term. Therefore, in the early part of the term, it is necessary to select and focus on difficult tasks. At this point, there is a caution to be aware of.

The public does not support all pledges. The reasons people cast their votes are diverse. However, typically, one or two factors determine their voting direction. Many people vote for a candidate for important reasons, even if they dislike certain pledges. Therefore, winning the presidential election does not guarantee public support for all pledges.

For example, President Moon Jae-in formed a Deliberation Committee on the Shin-Kori Nuclear Power Plant 5 and 6 to implement his pledge to gradually reduce the proportion of nuclear power generation. The committee took the reduction of nuclear power's share as a given and asked the public for their opinion on the construction of the Shin-Kori nuclear power plant. However, not all voters who cast a vote for President Moon agreed with reducing the share of nuclear power. The public should have been asked about phasing out nuclear power before asking about the construction of the Shin-Kori nuclear power plant. While the construction of the Shin-Kori nuclear power plant was decided to be halted, there is still no public consensus on the more important issue of phasing out nuclear power. This issue has the potential to be re-examined depending on who becomes the next president of the 20th term.

Here is another example. President Lee Myung-bak included the privatization of public enterprises in his campaign pledges. Based on his landslide victory, he pursued the privatization of public enterprises. After the economic crisis of 1997, the public had overwhelmingly supported the privatization of public enterprises.[1] However, as polarization deepened and the financial crisis of 2008 occurred, public opinion on privatization turned negative. At that time, the Blue House called the sale of shares in Incheon International Airport Corporation 'privatization,' even though it was not. They thought this was necessary to fulfill their pledge. However, they did not realize that the privatization frame at the time was unfavorable for pushing the pledge. They overlooked the fact that public sentiment changes with the times and that the public does not support all pledges.

So, what should be done in the early part of the term? Above all, from the perspective of strengthening the nation's finances, I want to emphasize fiscal reform in the early part of the term. In the early part of the term, there is a high possibility of neglecting fiscal reform if the focus is on building hardware such as government organization restructuring. Before pursuing fiscal reform, the public's willingness to pay taxes for tax increases must be raised. To this end, expenditure restructuring must be vigorously pursued first. This will reassure the public that their tax money is not being wasted. Also, when the government provides services to the public, it should provide support through vouchers rather than free of charge, which can reduce welfare spending and increase the perceived benefits of welfare. Finally, the income of self-employed individuals and professionals must be more accurately assessed. If people believe that taxation is unfair, they lose the will to pay taxes. Since the above reforms to strengthen the willingness to pay taxes cannot be completed in a short period, tax increases should be pursued concurrently with fiscal reform. In addition, social insurance reform is also necessary. Currently, the National Health Insurance and Employment Insurance are receiving substantial financial support.[2] The National Pension Service is currently in surplus, but it is projected to become the core of the public burden in the future. Correcting the deficit structure of these social insurances can minimize tax increases.

Meanwhile, as the term progresses towards the end, it becomes difficult to pursue agendas with significant political burdens. At this time, it is advisable to focus on internal reforms within the civil service. An example is President Kim Dae-jung's creation of the Special Committee for e-Government in 2001-2002, towards the end of his term, and concentrating efforts there. A point to consider for agenda setting at the end of the term is the implicit cooperation between the outgoing and incoming presidents. The role of the outgoing president is to prepare for the tasks of the next president or to create a favorable atmosphere in advance. This allows the next president to accomplish many tasks in the early part of their term, which is the opportune time for reform.

Germany was able to become a European leader because Chancellor Angela Merkel inherited the reforms of her predecessor, Schröder. In Korea, we have the case of the Suseo SRT, which came to fruition during the Park Geun-hye administration after the Lee Myung-bak administration pursued the introduction of railway competition.

Second, aim for historical evaluation, not immediate approval ratings.

There are necessary reforms that are unpopular. Examples include pension reform, abolition of the seniority-based wage system, and corporate restructuring. No president would want to do things that the public dislikes. Furthermore, the examples of former French President Nicolas Sarkozy and former German Chancellor Gerhard Schröder losing power due to declining approval ratings after pursuing pension reforms are enough to further deter presidents from pursuing reforms. If the single-term presidency has an advantage, it is the ability to pursue reforms without worrying about re-election. However, we are hardly benefiting from this advantage. Leaders who pursue unpopular reforms may experience low approval ratings during their tenure, but history will evaluate their sense of mission. However, if the president is fixated on short-term approval ratings with a short-sighted perspective, it is difficult to pursue unpopular reforms.

A short-sighted president focuses only on tasks that yield immediate results, rather than pursuing fundamental changes for the nation. For example, government R&D budgets, which should be pursued with a long-term vision as seen in the Korean New Deal, are focused on job creation. Research has three stages: basic, applied, and development. Development research is directly linked to commercialization and has the largest short-term job creation effect. Basic research, on the other hand, is often conducted by universities. However, R&D commissioned to universities is neglected because it does not increase employment.[3] Ultimately, to create jobs, the focus shifts to supporting research by small and medium-sized enterprises. In the process, interest in basic research is pushed to the back burner. However, to leap forward as a leading nation, the country must support basic research. If the government is trapped in short-sightedness and sets job creation as the goal of R&D, becoming a leading nation is a distant prospect. Furthermore, considering that support for businesses is often misused as blind subsidies rather than leading to innovation, the problems caused by the government's short-sightedness are serious.

Another characteristic of a short-sighted president is that they do not fear fiscal deficits. A deficit means drawing on future income, and governing that erodes the income of future generations for the sake of achievements during a five-year term is wrong. Deficits due to COVID-19 response are temporary, but deficits due to social security become entrenched. Once implemented, welfare programs are difficult to retract. The European Union recommends that the ratio of fiscal deficit to GDP not exceed 3%. We already recorded 2.8% in 2019, and would have exceeded 3% from 2020 even without COVID-19. Many EU countries are expected to recover to within 3% by 2024, but our target for 2024 is 4.3%.

Of course, the trend of increasing social welfare spending is inevitable. However, presidents who cater to short-term popularity tend to provide universal welfare to all citizens. Selective welfare, provided only to some citizens, is unpopular with those who do not receive it. However, universal welfare is a model that is only possible in countries with high tax burdens. In countries like Korea, where the tax burden is below the OECD average, it leads to severe fiscal deficits. Basic income is an example. Providing a basic income of 500,000 won per month to all adults and 300,000 won to those under 18 would require a budget of 290 trillion won. This is 52% of the 2021 national budget of 558 trillion won. While it is suggested that this be covered by significantly reducing other expenditures, its feasibility is questionable given that mandatory expenditures account for 48%. Realistically, the approach should be to provide more support to those with lower incomes. The answer lies in gradually expanding the scope and amount of benefits based on the current National Basic Livelihood Security System.

With a short-sighted view, one forgets the goal and becomes engrossed in enforcing the means. For example, the goal of raising the minimum wage is to improve the lives of workers. To achieve this, the number of employed persons multiplied by the average wage must be increased. However, a short-sighted president focuses on raising the minimum wage itself to achieve the immediate goal of increasing the average wage. However, a sharp increase in the minimum wage reduces employment. While the lives of workers who remain employed after a sharp increase in the minimum wage may improve, the lives of those who lose their jobs are completely devastated. The rate of increase in the minimum wage should be set at a level that does not reduce overall employment. The sharp increase in the minimum wage in 2018 was the result of forgetting the more important goal of employment in order to claim the achievement of means.

Third, do not try to beat the market to achieve policy goals.

Presidents inevitably feel the urge to intervene in the market to achieve policy goals. However, the government should complement the market, not replace it. The core of the market is property rights and prices. Of course, property rights can be restricted for public necessity, and the government can interfere with prices. However, if the scope is interpreted too broadly, it goes against market principles. The minimum wage is a matter for government intervention to ensure the minimum livelihood of workers. However, if it is set excessively high compared to the market equilibrium, side effects such as reduced employment occur.

The Moon Jae-in administration intervened in Jeonse (lump-sum deposit) prices through the so-called 'Lease 3 Acts'.[4] When such regulations are introduced, tenants who renewed their leases before the law took effect benefit, but new tenants or existing tenants who could not renew their leases often suffer. This is because the supply of Jeonse decreases, causing Jeonse prices to skyrocket. The ceiling on sale prices also stimulates speculative demand while reducing apartment supply. In the long run, it does not help stabilize apartment prices.

Excessive control over universities and local governments is similar. The government controls universities and local governments by making them dependent on the central government and then using financial support as leverage. As universities face financial difficulties due to low tuition fees, the government controls them by linking financial support to performance evaluations. However, the change or exit of universities should be the decision of the demand side, not the Ministry of Education. If you want to help local universities, you should expand scholarships for local university students. Replacing consumer choice with evaluation is an attempt to beat the market.[5]Local governments should also be allowed to compete by attracting people and businesses through autonomous decisions, but their administrative and financial dependence on the central government is deepening. Universities and local governments should be allowed to grow through competition.

The epitome of market-oriented policy is regulatory reform. However, this is more difficult than it seems. All presidents to date have pursued regulatory reform. Examples include President Lee Myung-bak's 'regulatory flagpole,' President Park Geun-hye's 'thorn in the fingernail,' and President Moon Jae-in's 'red flag.' However, none of these reform measures have been very successful. Among the 20 evaluation items that determine the country's competitiveness ranking by the International Institute for Management Development (IMD, 2021), the item where Korea received the lowest score is 'government efficiency related to business conditions.' This is because our regulatory system is based on a positive approach, i.e., listing what can be done. Of course, social regulations such as safety and fair trade regulations still require a positive approach. However, entry regulations should be shifted to a negative approach, i.e., allowing what is not prohibited. But this is not easy either. If a problem arises that was not prohibited in advance, criticism will be directed at the government. Furthermore, the negative approach weakens the authority of the executive branch, headed by the president. If the executive branch's power weakens, the legislative branch, which checks it, also weakens. The president must fight not only with Congress but also with the weakening of his own power. However, a president who truly respects the market should introduce negative regulations for new businesses.

Another way the government intervenes in the market is through fiscal spending. The government broadly supports businesses under the name of 'promotion.' As a result, an increasing number of uncompetitive companies are surviving with government support. As of 2020, among 1,244 SMEs, 50.9% were unable to cover their interest expenses with their operating profits. While the impact of COVID-19 was a significant factor, companies that should have exited are surviving like zombies and disrupting the market with low-price bids. The corporate ecosystem must be healthy. If uncompetitive companies are not eliminated, it becomes difficult for new promising companies to enter the market. Government support for businesses tends to receive public support under the pretext of 'job creation and economic revitalization.' However, the president (of the 20th administration) should remember that current business support is close to damaging the ecosystem.

Fourth, strengthen the overall coordination function for policy decision-making.

Coordination among ministries is important for policy decision-making. The Deputy Prime Minister for Economic Affairs can handle economic issues. However, when economic and social issues conflict, such as with telemedicine, it is difficult for the Deputy Prime Minister for Economic Affairs to exercise leadership. It would be good for the Prime Minister to coordinate, but his power is insufficient. The Prime Minister's authority is the recommendation to dismiss a minister, but since dismissing a minister is the president's exclusive prerogative, it is difficult for the Prime Minister to make such a recommendation carelessly. He also has the authority to evaluate ministries, but this is weak. To address this, I propose creating a Ministry of Planning and Budget, separated from the planning and budget functions of the Ministry of Economy and Finance, and transferring it to the Prime Minister's Office. Then, the Minister of Planning and Budget can comprehensively coordinate economic and social issues based on budgetary authority. Planning and budget functions are not economic functions but should be utilized to oversee the entire state affairs. This will naturally strengthen the coordination capacity of the Prime Minister's Office, to which the Ministry of Planning and Budget belongs.

Furthermore, it is possible to create a Ministry of Management and Budget by including the organizational management and e-government functions of the Ministry of the Interior and Safety in the functions of the Ministry of Planning and Budget. This would be similar to the Office of Management and Budget (OMB) under the U.S. President's Office. It has the advantage of strengthening the overall coordination function by concentrating the central management function for the executive branch. In particular, to achieve government reform at a level that changes the role of the government, it is reasonable to argue that both budget and organizational functions must be mobilized. Currently, ministries must go through the cumbersome process of visiting both the Ministry of the Interior and Safety (organization) and the Ministry of Economy and Finance (budget) to increase staff. On the other hand, it should be considered that the integration of somewhat disparate functions will take time to settle, and the Ministry of the Interior and Safety, which oversees the current Government Organization Act, will strongly oppose it.

Matters that are difficult for the Prime Minister to coordinate should be handled by the Blue House. However, inter-ministerial disagreements often boil down to disagreements among presidential advisors. Ultimately, the president must make the decision, which is a significant burden for a president. However, this burden should not be avoided. For issues with significant inter-ministerial or inter-adviser disagreements, the president must listen to the pros and cons thoroughly and make a decision. To this end, I recommend that the president operate an informal meeting body with the Prime Minister and the Chief of Staff to resolve important matters.

Occasionally, the Blue House may urge ministries to reach an agreement, but it is important to understand that some issues are fundamentally difficult to agree upon. Cooperation is possible if the goals are the same and the means are different. However, if the goals themselves are different, it requires arbitration or mediation, not cooperation. Therefore, if an agreement cannot be reached, maintaining the status quo should not be the conclusion. If the conclusion is to maintain the status quo when an agreement cannot be reached, the party that wishes to maintain the status quo will never compromise. Ultimately, change for the future becomes impossible. The Blue House must act as an arbiter, siding with one party when ministries cannot agree, or as a mediator to reach an agreement by coordinating interests. A president who neglects this role cannot bring about change.

Fifth, monitor policy implementation and measure its effects.

A president's five-year term is short. This is even more true for completing reforms that the bureaucracy, or the 'public service,' does not want. In the latter half of a president's term, the public service expects that the next president may completely re-examine the tasks. Therefore, it is best to complete tasks with high reversibility within the term. This requires monitoring the implementation of plans.

The integration of Korea Land Corporation and Korea National Housing Corporation during the Kim Dae-jung administration is a representative example of failure. In 1998, the State Council decided to integrate Korea Land Corporation and Korea National Housing Corporation by 2001. At the time, the Ministry of Construction and Transportation opposed the integration but reluctantly accepted it due to the president's strong will. However, the Ministry of Construction and Transportation did not proceed with the integration preparations, which was only confirmed at the end of 2000, leading to the hasty preparation of an integration plan. However, due to the rush, there was insufficient agreement between the parties, particularly the opinions of Korea Land Corporation were not reflected, resulting in continued lobbying against the integration by Korea Land Corporation even after the integration bill was submitted to the National Assembly at the end of 2001. As the ruling and opposition parties were negative about the integration and the union's opposition was strong, President Roh Moo-hyun withdrew the integration bill in 2003. If the Ministry of Planning and Budget had monitored the integration preparations by the Ministry of Construction and Transportation in the mid-2000s, the outcome might have been different.[6]

Implementation does not necessarily mean performance. Many people pretend to work hard but actually achieve nothing. Due to the short tenure, many bureaucrats avoid tasks that take a long time to show results. They think that as long as they don't have to take responsibility during their term, it's fine to pretend to work hard. For example, ministries in charge of job creation programs for the vulnerable are only interested in exhausting the related budget, not whether the vulnerable are benefiting from it.[7] If there are many such bureaucrats, national budget and manpower are wasted, and the resolution of problems becomes distant. For the president to succeed, he must evaluate outcomes, not focus on implementation.

As performance evaluation in the public service is not properly conducted, actual 'showy administration' and 'evasive administration' are rampant. Both showy and evasive administration have in common that they focus on demonstrating diligent effort rather than actual effectiveness. While showy administration aims to receive praise, evasive administration aims to avoid blame, differing only in purpose. Showy administration often manifests as unnecessary events or fiscal expenditures, while evasive administration often manifests as excessive prior regulations, both causing significant harm. The president must check whether the reports heard from public officials are showy or evasive administration. Furthermore, policy-specific performance evaluations must be strengthened to fundamentally resolve these issues.

3. Build an infrastructure for establishing good policies.

Determine what the government should do and what it should stop doing first.

Every past president has undertaken government organizational reform immediately after taking office. However, most of these reforms involved moving functions from one ministry to another or merging ministries. The method of grouping existing functions was changed, but the functions themselves remained the same. However, for the president to succeed, the government must first focus on what it should do. It should not allocate capabilities and resources to tasks that have little effect or are even detrimental to the nation. Diligently performing tasks that should not be done is actually detrimental to national interests. Therefore, tasks that need to be increased and tasks that need to be decreased must be distinguished first and reflected in government organizational reform.

Clark and Dear (1984) broadly categorize the functions of the executive branch into four types: ① Functions for social integration and public happiness. This is the government's function of providing public goods to citizens, such as environment, education, and welfare. ② Order maintenance functions. These are functions for national security and order, such as police, prosecution, taxation, defense, and diplomacy, where the government often imposes certain obligations on citizens. ③ Intra-governmental coordination functions. These are functions for the government to manage itself, such as the Prime Minister's Office, budget, local autonomy, government management, personnel, and audit. ④ Economic functions. This refers to the government's intervention in the market through regulations, promotion of businesses, and supply of infrastructure. This also includes cases where the government acts as a supplier through public enterprises.

We have a relatively developed economic function due to the past economic development era. The Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, the Ministry of Land, Infrastructure and Transport, the Ministry of Science and ICT, the Ministry of Agriculture, Food and Rural Affairs, and the Ministry of Oceans and Fisheries generally perform economic functions. Other ministries also have support functions for related industries. Examples include the pharmaceutical industry by the Ministry of Health and Welfare, the cultural industry by the Ministry of Culture, Sports and Tourism, the fire industry by the Ministry of the Interior and Safety, and the environmental industry by the Ministry of Environment. As a result, the proportion of the economic sector in the budget and the proportion of policy finance relative to GDP are among the highest in the OECD. These economic functions should be reduced in the future. Of course, support for R&D in universities, startup support, and support for future-oriented industries are necessary. However, support for companies undergoing restructuring, inefficient infrastructure investment, and direct supply roles that encroach on the private market should be reduced.

Conversely, the remaining three functions should be strengthened. In the future, ① the government's supply of public goods directly related to people's happiness, including welfare functions, should be expanded. ② To strengthen social capital, our sense of order must be strengthened, and the budget and personnel for strict adherence to laws and taxes should be increased. ③ Furthermore, the internal management functions of the government should be strengthened, focusing on coordinating inter-ministerial disagreements and reforming the government. This change should then be reflected in government organizational reform.

In the past, the goals of economic growth and social integration have often conflicted. However, in the future, social integration will be even more necessary for economic growth. Social integration strengthens social capital and reduces various transaction costs, thereby contributing to economic growth. It also directly contributes to happiness by enhancing community cohesion. Social integration requires multifaceted government efforts, including enhancing equity through welfare, improving social mobility, fostering social trust through fairness and the rule of law, increasing transparency in the public sector, and strengthening the government's conflict management capabilities. The top priority for the president in the future should be social integration. Only then can the president succeed.

Share presidential power.

Although gradually changing through democratization, the president and the executive branch still overwhelmingly dominate the legislative branch. Consequently, the National Assembly often becomes divided based on support or opposition to the president. The existence of a so-called 'imperial presidency' hinders consensus building in the National Assembly and prevents the nation from escaping a top-down culture. While weakening one's own power is difficult, for the president to successfully manage state affairs, power must be shared with the National Assembly and local governments.

First, the power of the executive branch must be shared with the National Assembly. In particular, executive functions that require consensus building should be transferred to the National Assembly. Since bipartisan consensus represents the voice of the entire nation, it can lead to greater satisfaction among all voters compared to decisions made by an executive branch headed by a president from a single party. Furthermore, matters agreed upon by the National Assembly have the advantage of continuity even if the president changes. A prime example is the Economic, Social and Labor Council (ESLC) directly under the president. Currently, even if the ESLC reaches an agreement, re-discussion is inevitable during the legislative process in the National Assembly. From the perspective of the Korean Confederation of Trade Unions (KCTU), most of the ESLC's discussion points weaken their vested interests, so there is little incentive to participate. If an unfavorable decision is made, they can block it in the National Assembly. However, if the ESLC were under the jurisdiction of the National Assembly, it would be difficult to refuse participation, as its decision would be final. Additionally, the issue of phasing out nuclear power should also be decided by the National Assembly.

The total budget and the growth rate for each sector should be decided by bipartisan consensus in the National Assembly. The current role of the National Assembly is merely to increase or decrease the budget proposed by the executive branch by about 1%. The ruling party tends to want budget expansion, while the opposition party tends to want cuts. The current method of agreeing on the total budget amount between the executive branch and the ruling party results in the exclusion of the opposition party. Consequently, the risk of fiscal deficits becoming entrenched deepens. The president must yield his power to the National Assembly and the opposition party. Similarly, a procedure for the National Assembly to review medium- and long-term plans decided by the executive branch should be added. Currently, only the basic direction of the national fiscal management plan is reported to the standing committees of the National Assembly. Important plans should be reviewed by the National Assembly to give them binding force and continuity.

Furthermore, the Blue House must also recognize the authority of the Prime Minister. Routine policy coordination should be handled by the Office for Government Policy Coordination, and only matters with significant ripple effects that cannot be agreed upon among ministries should be discussed and decided by the president in consultation with the Prime Minister and the Presidential Chief of Staff. If the Blue House intervenes in every matter and dictates the direction, decision-making speed will slow down, and ultimately, the burden will fall on the president. The president can receive historical evaluation by focusing on foreign affairs and a few important and difficult reforms. In this regard, a Prime Minister with a deep understanding of policy and strong command of work is suitable. A Prime Minister who serves merely as a figurehead with a good image will only lead to the concentration of power in the Blue House.

Presidential appointment authority should also be shared. The Act on the Management of Public Institutions distinguishes between heads of institutions appointed by the president and those appointed by ministers. However, this is mostly not observed. The president must respect the minister's appointment authority. This also applies to appointments at the director-general and director levels within ministries. The only authority a minister with a short tenure has is appointment power, and if the Blue House intervenes even in this, it becomes difficult for the minister to lead the ministry.

In addition, the functions of the executive branch must be shared with the local governments. The seven most competitive countries selected by the IMD (Switzerland, Sweden, Denmark, Netherlands, Singapore, Norway, Hong Kong) all have populations of approximately 5 to 17 million. By integrating metropolitan areas to increase scale and fostering competition among local governments, the overall competitiveness of the Republic of Korea can leap forward. To achieve this, a significant portion of the central government's authority must be transferred to local governments. For example, the minimum wage and the 52-hour workweek could be determined by metropolitan area. Education functions should also be transferred to each education office. If we think that the same services must be provided nationwide, decentralization is impossible. Furthermore, the work performed by the central government's special local administrative agencies (local offices) should be largely transferred to local governments, with some exceptions. All presidents have made efforts toward such decentralization, but generally without success. The most proactive government in decentralization was the Roh Moo-hyun administration. At that time, seven agencies were transferred en masse to Jeju Special Self-Governing Province.[8] This success in Jeju should be applied to other metropolitan areas.

Fiscal matters must also be decentralized. First, budget projects where the central government spends for local governments should be transferred to local governments. A prime example is the budget for regional industry promotion. Since the central government is carrying out projects for local areas, neither the central nor the local government feels responsible. Additionally, when providing budgets to local governments, a comprehensive subsidy system by ministry should be introduced. For example, subsidies from the Ministry of Agriculture, Food and Rural Affairs to local governments are currently compartmentalized by project; these should be unified into a single grant, allowing local governments to decide how to allocate them among projects. This will increase project effectiveness and prevent waste.

In fact, the most crucial transfer is the transfer of tax revenue. Under the current system where the central government collects most taxes and distributes them to local governments, local dependence cannot be overcome. However, if the proportion of local taxes is increased indiscriminately, only the Seoul metropolitan area with its strong tax base will benefit. One method is to convert corporate taxes into a joint tax, shared between the central and local governments, and introduce a system that increases the distribution rate to local governments in less developed regions. Introducing such a differentially distributed joint tax can achieve both decentralization and balanced regional development simultaneously.

Establish a system for promoting reform.

While reform begins at the Blue House, the Blue House cannot oversee all reform tasks. It would be ideal if each ministry pursued its own reforms, but this does not happen. This is because reforms often infringe upon the vested interests of each ministry. Examples include the transfer of functions to local governments, the abolition of regulations, and the reduction of budget projects. Therefore, a reform promotion entity is needed to set the direction of reform and encourage each ministry. I propose creating a Presidential Committee for Government Innovation, tentatively named, to promote this. The chairman should preferably be full-time, but part-time is also acceptable. A separate secretariat should be established, with a Blue House secretary serving as the head of the secretariat and a senior secretary participating as a standing member of the committee. This model is recommended.[9] The Government Innovation and Decentralization Committee of the Roh Moo-hyun administration already has experience implementing this. Benchmarking this would be beneficial.

The human resource promotion system within the public service organization is also an important institutional foundation. First, it is important to appoint capable ministers to implement it. Ministers must be given a clear mission to reform their respective ministries. If existing tasks are well managed and minor improvements are made, directors-general can handle them adequately without a minister. Ministers must accomplish tasks that public officials within the ministry cannot voluntarily achieve. Furthermore, ministers' terms must be sufficiently guaranteed. The current average tenure for ministers is 14 months, making it impossible for ministers to pursue reform as they must resign just as they begin to grasp the work.

However, it is difficult to reform the public service with ministers alone. I recommend establishing an innovation deputy minister in each ministry to assist the minister in promoting reform. This could be done by eliminating existing director-general positions and establishing deputy minister positions instead, or by changing the roles of existing deputy ministers. Since it is difficult for internal public officials to fill these positions, ministers should be granted appointment authority to recruit externally. Competent external personnel who can work in sync with the minister are also needed at the director-general level. In this regard, the open recruitment system, currently set at 20% of director-general positions, should be gradually increased. It is problematic for the Blue House to appoint politically connected individuals with low competence as a 'parachute.' Ministers should be able to recruit people to work with them through open recruitment. Open recruitment positions have the advantage of a 3-year contract, which is twice as long as the tenure of a typical director-general.

4. Adopt a long-term perspective for the president's true success.

So far, the conditions for presidential success have been introduced, focusing on the socio-economic aspects.

The proposals introduced in the main text are summarized in <Table 2>. Among these, the most important proposal is that the president must share his power with the National Assembly, ministers, local governments, and the market, and conduct state affairs with a long-term perspective. However, all of these are difficult tasks. How can this be made possible?

First, the demand for the president to share his authority may be ignoring the inherent nature of power, which cannot be shared even between father and son. In that sense, this is not a matter to be left to the president's personal goodwill but a matter that should be regulated institutionally. In this regard, the active role of the National Assembly is necessary. However, while the National Assembly may be proactive in strengthening its own authority, it may not welcome the strengthening of local government authority. Currently, the National Assembly has the authority to audit national delegated affairs and national subsidy budget projects of metropolitan and provincial governments. By expanding the delegation of authority to local governments while strengthening the National Assembly's oversight of them, the National Assembly's opposition may be reduced. However, it is still difficult to pursue the transfer of authority that the president strongly opposes.[10] In such cases, let's change the system and postpone its implementation to the next president. For example, the Act on the Establishment and Operation of the National Education Committee was promulgated in July 2021, but its enforcement date was set for July 2022, one year later.

Second, for the president's goals to be set correctly with a long-term perspective, other success conditions become possible. How can a president with a single five-year term have a long-term perspective? This depends on the media and the public. It is necessary not only to emphasize the importance of a long-term perspective during the president's term but also to discover and widely publicize cases of past presidents who overcame the limitations of a single term and pursued sound policies with a long-term vision. This will inspire the president to aspire to achieve historically significant accomplishments. Ultimately, it is important for the media and the public to evaluate the president objectively and strictly. Unconditionally favorable or hostile evaluations of the president cannot change the president's attitude. The president is made by the people.

Summary of proposals for the success of socio-economic policies <Table 2>

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References

Korean Information Service. 2000. "Public Survey on Privatization of State-Owned Enterprises."

Kim Byung-wook, Member of the Democratic Party. 2018. "Analysis of the 2017 Government-Funded Job Project Evaluation." Audit Material.

Park Joong-hoon et al. 2016. "A Reflection on Government Organization Reforms of Successive Administrations in Korea." Korea Institute of Public Administration. Park Jin. 2021. "Directions and Tasks for Government Organization Innovation." National Assembly Secretariat.

Park Jin. 2021. "5 Things President Moon Should Do Before Passing the Baton to XXX." "Maeil Business Newspaper Big Picture." 7. 21.

Park Jin. 2020. "How to Change Korea." Haksa Publishing.

Hangil Research. 2002. "Public Opinion Survey on Power Plant Privatization."

Clark, G. and M. Dear (1984), "State Apparatus: Structures and Languages of Legitimacy", Boston: Allen & Unwin

[1]According to a 2000 survey by the Korean Information Service, 71% favored the privatization of public enterprises, while 21% opposed it. A 2002 survey by Hangil Research on the privatization of power plants, commissioned by the Korean Confederation of Trade Unions, found that 51% of the public supported it and 44% opposed it.

[2]The national treasury supports 14% of health insurance revenue, exceeding 9 trillion KRW in 2020, and employment insurance support was approximately 1 trillion KRW as of 2021.

[3]Support for universities is partially distributed to master's and doctoral students, but it does not create jobs as most do not have social insurance coverage. While the Korean New Deal also includes support for universities, the responsible department within the Ministry of Education is the Industry-Academia Cooperation Job Policy Division. This indicates that research support for universities is focused on corporate job creation.

[4]Consequently, tenants can request a two-year lease extension, and landlords must accept this unless there are special reasons such as personal occupancy. Rent increases are also limited to within 5% of the previous rate.

[5]Furthermore, the rate of high school graduates advancing to higher education was 72.5% in 2020, which is high compared to Europe (around 40%). There is no need to lower tuition fees to encourage more students to attend university. Low-income students can be supported through scholarships.

[6]The Lee Myung-bak administration pursued the merger of Korea National Housing Corporation and Korea Land Corporation, leading to the establishment of Korea Land & Housing Corporation (LH) in 2009.

[7]The direct job creation program (48 projects), which disbursed 2.8538 trillion KRW in 2017, only had a participation rate of 36.3% among vulnerable employment groups. (Kim Byung-wook, 2017)

[8]These include the Jeju Regional Construction and Management Office, Jeju Regional Maritime Affairs and Fisheries Office, Jeju Regional Small and Medium Business Administration, Jeju Environmental Office, Jeju Regional Labor Office, Jeju Regional Labor Relations Commission, and Jeju Veterans Affairs Office.

[9]At the time of its launch in 2003, the ex officio members included the ministers of the Ministry of Economy and Finance, Ministry of Government Administration and Home Affairs, Ministry of Information and Communication, and Ministry of Planning and Budget, along with the Minister of Government Policy Coordination, the Chairman of the Central Personnel Committee, and the Senior Secretary to the President for Policy.

[10]According to Article 53 of the Constitution, the President may request a reconsideration of a bill passed by the National Assembly. If the National Assembly passes the bill again with the concurrence of a majority of the members present and voting, with more than two-thirds of the votes of the members present and voting, the bill becomes law.

■ Author: Park Jin_ Professor at the KDI School of Public Policy and Management. He received his Ph.D. in Economics from the University of Pennsylvania and has been affiliated with KDI or the KDI School since 1992. He took three leaves of absence to serve as the Head of the Administrative Reform Team at the Ministry of Planning and Budget (1998-2001), Director of the Center for Public Institutions Research at the Korea Development Institute School of Public Policy and Management (2012-13), and the inaugural President of the Korea Future Strategy Institute (2018-20). His lifelong goal is to build consensus between the left and right through moderate alternatives, and he has served concurrently without compensation as the Director of the Future Strategy Institute, a research NGO, and Chairman of the Ahnmin Policy Forum. His areas of interest include government reform and public finance, future studies, conflict resolution, and economic development theory, and he has consulted for numerous domestic and international governments. His publications include "How to Reform the Republic of Korea" (2020, Ihaksa).

■ Responsible Editor: Jeon Ju-hyun _ EAI Research Fellow

    Inquiries: 02 2277 1683 (ext. 204) | jhjun@eai.or.kr