[EAI Working Paper] 2022 Presidential Success Conditions Series: ⑨ Propose a New Paradigm for Balanced National Development

1. Why is a New Consideration for Balanced Development Necessary?

2021 was a truly significant year for local autonomy in Korea. It marked the 30th anniversary of the re-implementation of the local autonomy system, which began with the opening of local councils in 1991. Thirty years is not a short period. Confucius once referred to the age of thirty in the "Wei Zheng" chapter of the "Analects" as "Li (而立)," meaning the establishment of all foundations. If we follow Confucius's words, Korean local autonomy should be at the age of Li. Has Korean local autonomy truly reached the age of Li after 30 years? If you ask me or experts in local autonomy, the answer seems obvious. Unfortunately, it is highly likely that it has not even reached the stage of "Zhi Xue (志學)" [understanding the fundamentals], let alone "Li."

Korean local autonomy, reintroduced during the democratization process that began in 1987, has gradually taken shape under successive governments. Recently, the "Act on the Comprehensive Transfer of Local Authority," considered the biggest task in local autonomy, was enacted, and the bill for the complete revision of the Local Autonomy Act passed the National Assembly after 32 years, marking a new turning point for advancement. However, despite its remarkable progress, the local autonomy system, which has grown alongside democracy in our society, still faces many problems.

The problems are particularly severe in the area of balanced development, which is a result of local autonomy. The widening regional gap between the Seoul Metropolitan Area and non-metropolitan areas and the resulting crisis of regional extinction are prime examples. The Seoul Metropolitan Area, which accounts for only 12% of the national territory, has already surpassed the population of non-metropolitan areas. Reports indicate that the number of companies operating in the Seoul Metropolitan Area, its regional gross domestic product (GRDP), and its local tax revenue all exceed half of the national total. The bleak media forecasts that half of all local governments may disappear in 30 years add to the despair and sense of loss for regional residents suffering from COVID-19.

Given this situation, what should the 20th President of Korea and his administration contemplate to prepare for another 30 years, moving beyond the current stage of "Li" to "Zhi Tian Ming" (知天命 - understanding the mandate of heaven) and "Er Shun" (耳順 - hearing with ease)? In this paper, I will examine how the new president should effectively address the regional gap between the Seoul Metropolitan Area and non-metropolitan areas and the crisis of regional extinction in the process of finding answers to these questions.

2. The Distorted Seoul Metropolitan Republic: What is the Problem?

Previous Presidents: The Results of Efforts for Balanced National Development

Korea, in the shadow of its rapid growth that achieved the "Miracle on the Han River" in the 1970s, failed to fully recognize the growing tumor of "regional disparity." President Park Chung-hee's authoritarian developmental state model relied heavily on an unbalanced growth strategy centered on growth poles and heavy industry. It was a strategy of watering only the most promising sprouts. As a result, resources and population were concentrated in the Seoul Metropolitan Area and along the "Gyeongbu Axis" connecting Gumi, Daegu, Busan, Ulsan, and Gyeongnam, and the fruits of economic development were monopolized by large cities rather than rural areas. Rural areas, non-metropolitan regions, and non-Yeongnam regions, which were like yellow sprouts from birth, did not adequately share in the benefits of economic growth. The regional gap between the Seoul Metropolitan Area and non-metropolitan areas, and between urban and rural areas, and between Yeongnam and Honam, inevitably widened over time.

The government and a majority of the public began to fully recognize the existence of these unseen cancer cells growing behind the dazzling economic growth in the 1980s. Fueled by this awareness, efforts for balanced national development by the central government continued earnestly from the Roh Tae-woo and Chun Doo-hwan administrations through the participatory government. Notable examples include the enactment of the "Act on Balanced Regional Development and Support for Small and Medium-sized Enterprises" during the Kim Young-sam administration, the establishment of the Second Metropolitan Area Redevelopment Plan (1997-2011) during the Kim Dae-jung administration, the enactment of the "Act on Balanced National Development" during the participatory government, the promotion of the "5+2 Greater Economic Zones" during the Lee Myung-bak administration, the promotion of the HOPE Project (Happiness, Opportunity, Partnership, Everywhere) based on the concept of "Happy Living Zones" during the Park Geun-hye administration, and the enactment of the "Act on the Comprehensive Transfer of Local Authority" and the complete revision of the Local Autonomy Act during the Moon Jae-in administration.

However, despite these efforts by successive presidents for balanced development, the current state of national balanced development policies has not yet moved beyond an infantile stage. First, in terms of space, the power distribution structure between the central and local governments, which is inherently centralized, has remained unchanged as the basic framework of national operation. Although demands for autonomous decentralization and balanced development from local governments and residents are increasing, the entrenched central political power, centered on the Seoul Metropolitan Area, is failing to adequately respond to these regional demands and is instead reinforcing the vested interests of the new national spatial structure, which is expanding from the Seoul Metropolitan Area to encompass the Chungcheong region (Su-Cheong Area).

The gap between the Seoul Metropolitan Area and non-metropolitan areas in Korea has reached a level so severe that it hinders national growth. While the population of non-metropolitan areas has stagnated at around 25 million since the mid-1980s, the population of the Seoul Metropolitan Area has grown rapidly by more than fivefold over the past 50 years. This disparity is even more pronounced in terms of industry, economy, jobs, and education. 73.4% of the top 1,000 companies by sales, 83% of the top 100 companies by market capitalization, 91% of the headquarters of the top 100 companies, 69.3% of the land value owned by the top 30 companies, 59% of businesses with more than 500 employees, and 60.8% of newly established corporations are concentrated in the Seoul Metropolitan Area. As of 2017, the regional gross domestic product (GRDP) of the Seoul Metropolitan Area began to surpass that of non-metropolitan areas.

The monopoly of the Seoul Metropolitan Area is further strengthening in economic functions such as finance. 70.2% of won deposits and 67% of financial loans are concentrated in the Seoul Metropolitan Area. Of the 252 cities, counties, and districts nationwide, 32 (82%) of the top 39 regions in the "Job Quality Index" are located in the Seoul Metropolitan Area, and approximately 30% of graduates from non-metropolitan universities leave for the Seoul Metropolitan Area to find jobs. The innovation index of the so-called Su-Cheong Area exceeds the national average, while the southeastern, Honam, and Gangwon regions fall short of half the national average. The innovation index, a predictor of future growth, clearly shows a trend of increasing closer to the Seoul Metropolitan Area. The concentration of research and development (R&D) in the Seoul Metropolitan Area is also astonishing. 68.8% of R&D expenditures, 64.3% of R&D organizations, and 61.6% of R&D personnel are concentrated in the Seoul Metropolitan Area. In contrast, the number of recipients of basic livelihood security benefits is about 350,000 higher in non-metropolitan areas than in the Seoul Metropolitan Area, accounting for 60% of the total. This demonstrates that the regional gap between the Seoul Metropolitan Area and non-metropolitan areas ultimately leads to a gap in the quality of life (Kim Kyung-soo, 2019).[1]is also a testament to the fact that the regional gap between the Seoul Metropolitan Area and non-metropolitan areas ultimately leads to a gap in the quality of life (Kim Kyung-soo, 2019).

The crisis of regional extinction is not significantly different from the situation of the regional gap between the Seoul Metropolitan Area and non-metropolitan areas. According to the regional extinction risk index analysis by the Korea Employment Information Service as of May 2020 [2], 42% of the 228 cities, counties, and districts nationwide are classified as "regions at risk of extinction." The fact that nearly half of the basic local governments are at risk of extinction is surprising, but even more surprising is the speed of regional extinction. According to research by Ko Moon-ik and Kim Geol (2021), there were no regions at risk of extinction in 2000, but the number surged to 61 in 2010 and 103 in 2020. The spatial concentration of basic local governments at risk of extinction is also a serious concern. In 2020, 62.1% of all regions at risk of extinction were concentrated in Gyeongsang Province and Jeolla Province, and most of them were located in rural, agricultural, fishing, and coastal areas or mixed urban-rural areas, rather than in cities. In short, regions are being pushed towards extinction in the order of "cherry blossoms blooming."[2]analysis, 42% of the 228 cities, counties, and districts nationwide are classified as "regions at risk of extinction." The fact that nearly half of the basic local governments are at risk of extinction is surprising, but even more surprising is the speed of regional extinction. According to research by Ko Moon-ik and Kim Geol (2021), there were no regions at risk of extinction in 2000, but the number surged to 61 in 2010 and 103 in 2020. The spatial concentration of basic local governments at risk of extinction is also a serious concern. In 2020, 62.1% of all regions at risk of extinction were concentrated in Gyeongsang Province and Jeolla Province, and most of them were located in rural, agricultural, fishing, and coastal areas or mixed urban-rural areas, rather than in cities. In short, regions are being pushed towards extinction in the order of "cherry blossoms blooming."[3]It can be inferred that the widespread concern that local universities will perish in the order of cherry blossoms blooming is not mere unfounded worry. If special measures are not taken to revitalize these regions facing extinction, we may witness a satellite image of a Seoul Metropolitan Area illuminated like a city of a thousand lights in 30 years.

Past Paradigms: What Was the Problem?

Despite the continuous efforts of successive governments to strengthen balanced national development, why has balanced development not been properly achieved? While various reasons can be identified, I would like to highlight the following as major ones. First, there has been a lack of consistency and commitment in the government's policy intentions when implementing various policies to strengthen balanced development. In other words, the government's intentions changed from the time it entered the restroom to the time it exited.

Second, another major reason is the failure to secure public interest and broad, firm support for the policies aimed at strengthening balanced national development. In essence, the failure to secure political momentum for policy implementation seems to have been a strategic misstep. The structural problem of the political ecosystem itself, which increasingly favors the Seoul Metropolitan Area due to the regional distribution of voters, has exacerbated this tendency. Of course, the lack of will from non-metropolitan voters for local autonomy also played a significant role. Even if the voting power of Seoul Metropolitan Area voters, who cannot help but overlook balanced development between the Seoul Metropolitan Area and non-metropolitan areas, cannot be ignored, the situation could have been quite different if non-metropolitan voters had united to support the president's strong policy intentions for balanced national development.

Third, the centralized tendency in the process of promoting national balanced development policies led by the Blue House and the government cannot be ignored as a factor of failure. This may stem from the genetic traits of Korea's development, where the Blue House and the government bureaucracy had to lead everything during the era of economic growth based on authoritarian dictatorship. As a result, balanced development policies in Korea have long been reduced to policies of benevolence from the central government to the regions.

Fourth, the failure to properly implement a "selection and concentration" strategy when promoting policies to strengthen balanced national development is also a major cause of the widening regional gap between the Seoul Metropolitan Area and non-metropolitan areas. Due to the effort to simultaneously strengthen the three pillars of local autonomy: resident autonomy, decentralization, and balanced development, which form the basis of the local autonomy system, there was insufficient deep consideration of how to prioritize policies for goal achievement. Strengthening autonomy and decentralization are also crucial tasks for local autonomy that cannot be postponed. However, this was done by deliberately ignoring the fact that their success is predicated on inter-regional balance. This can be easily understood by considering why local governments facing fiscal crises are rushing to oppose immediate fiscal decentralization from the central government.

3. New Paradigm for Balanced Development: Where Should We Head?

Korea has made relentless efforts to strengthen local autonomy for 30 years since the re-establishment of the local autonomy system in 1991. Local autonomy has already become an indispensable standard of value and norm for our society to move towards a mature democratic society. Therefore, no one denies the importance of local autonomy. However, the level of Korean local autonomy has reached its limit. The demands of regional residents for autonomous decentralization and balanced development are not yet sufficiently politically organized to become a real force. The demands for autonomous decentralization and balanced development are running in parallel and are misaligned. Central government bureaucrats and Seoul Metropolitan Area politicians, influenced by Seoul Metropolitan Area-centrism, are exploiting the gap between them, further complicating the situation.

In this situation, how can we bridge the gap between the norms and reality facing Korean local autonomy, and the discordant coexistence of autonomous decentralization and balanced development, into a substantial integration? This is indeed a daunting challenge that the new president must tackle with his advisors. However, such a challenge is difficult to resolve within the five-year term of a single-term president. Therefore, rather than an excessive desire to solve all problems at once, prudence and wisdom are required to address the most critical issues one by one. Where should we begin to find the key to solving these problems?

From Region to Nation: The Nation Thrives When Regions Thrive, Let's Stop Regional Extinction First

"The nation thrives when regions thrive!" This is no different from saying that regional development ultimately leads to national development. From a spatial perspective, regions are subsets of the nation, so logically, it is not incorrect. Of course, this may be a difficult assertion for the older generation who achieved the "Miracle on the Han River" while overcoming the period of food scarcity in the 1960s. For them, who had to sacrifice regions, companies, and individuals for national economic development, the idea that regional development takes precedence over national development might sound like a reversal of subject and object. However, for the younger generation living in the era of the Fourth Industrial Revolution, this is an easily relatable assertion. It may even sound like a cry for survival, not just empathy, for young people in the regions who are facing intense job competition due to a lack of jobs after graduating from local universities.

Why is there such a clear generational difference in perception regarding the logical order of development between different spatial units like regions and the nation? First, the influence of the local autonomy system, fully implemented since 1991, can be cited. Before the re-introduction of the local autonomy system, under the centralized governance system, the development of the regional economy was of little interest to the central government, appointed local heads, or regional residents. However, with the re-introduction of the local autonomy system, each region emerged as a new unit for competitive comparison, and the paradigm for viewing regional economic development also changed. The era when the nation led regional economic development has shifted to an era where regions lead national economic development. Residents struggling through the era of neoliberal globalization have begun to perceive regional economic development as a matter of survival as well as a matter of course.[4]

The intensifying regional gap between the Seoul Metropolitan Area and non-metropolitan areas and the resulting crisis of regional extinction have also prompted a shift in perception towards the idea that national development should be led through regional economic development. The acceleration of the regional extinction crisis has reached a level that threatens not only the collapse of regional economies but also the sound growth of the national economy. Therefore, even without explicitly emphasizing the importance of national development through balanced regional development, as stipulated in the Constitution, balanced regional development needs to be emphasized as a necessary and sufficient condition for national survival, not just for regions.

What, then, are the desirable actions the new president should take to become a "successful president" who achieves the ultimate goal of national development through balanced regional development? Above all, the new president needs to rationally adjust the priorities of national goals and state affairs so that the ideology of balanced development can become the highest national goal and a core task of state administration, in order to overcome the crisis of regional extinction. In previous administrations, national agendas related to balanced national development were often relegated to lower priorities on the list of state affairs. However, the new president needs to emphatically declare the response to the crisis of regional extinction through strong national balanced development policies as the highest national goal and task from the perspective of national survival. This is because the regional gap between the Seoul Metropolitan Area and non-metropolitan areas is widening, and the speed of regional extinction is so rapid that urgent measures are needed. Elevating balanced development to the highest national goal and task and clearly demonstrating the top national leader's belief and will in balanced development through the slogan "The nation thrives when regions thrive" is one of the effective ways to slow down the speed of regional extinction, even if only slightly.

The heads of ministries and the bureaucracy that the new president will lead are likely to adjust their response levels depending on the president's stance and attitude towards balanced national development. Therefore, for proper balanced national development to occur, the president's will is paramount. The experiences of past presidents clearly show the importance of the president's visible actions and will. Former President Roh Moo-hyun made balanced development a core project of his administration, personally overseeing it. However, under the Lee Myung-bak and Park Geun-hye administrations, balanced national development was relegated to a state affair that the president paid little attention to. The Moon Jae-in administration, while verbally emphasizing the inheritance of the participatory government's balanced development policies, actually showed significantly less presidential interest in balanced development policies compared to other state affairs.[5]Although most past presidents have emphasized the importance of balanced development during their election campaigns, they have tended to abandon it or delegate it to relevant ministries and agencies after being elected. Therefore, the new president, who will set balanced development as the highest national goal and task, needs to actively demonstrate the president's practical commitment to balanced development, such as attending more frequent meetings of the National Balanced Development Committee, unlike previous presidents, by personally showing strong will from the top national leader regarding balanced development.

From Decentralization to Balance: The Problem is Balance, Stupid!

Local autonomy encompasses three areas: resident autonomy, decentralization, and balanced development. While these three areas are distinct, they are also closely interconnected. Therefore, it is difficult to consider the issue of autonomous decentralization separately from the issue of balanced development. However, there is an order to things. In that sense, examining the order of precedence between autonomous decentralization and balanced development, both theoretically and practically, is important in the process of setting the direction for new national and social reforms. This is because investing limited resources and personnel in the wrong order could be like pouring water into a leaky pot.

Above all, considering Korea's unique historical, political, economic, social, and cultural environment, it is necessary to find clues for a logical judgment on the order of precedence between autonomous decentralization and balanced development by asking the fundamental question of whether Korea is a country that needs the expansion of local autonomy through autonomous decentralization and balanced national development (Jeon Yong-ju, 2017; Kim Seung-tae & Jeon Yong-ju, 2017). Such a fundamental question is also related to the fundamental question of the effects of local autonomy: Will strengthening local decentralization bring about balanced national development? The demand for local autonomy has often been treated as a normative issue in a democratic system, but seeking an answer to the fundamental question of whether the demand for local autonomy should be accepted as a matter of norm leads to an approach to the relationship between autonomous decentralization and balanced development.

Ultimately, these fundamental questions inevitably lead to a confrontational debate about whether the relationship between local decentralization and balanced development is complementary or conflicting, and the usual endpoint of such debates is related to the evaluation of the accumulated achievements of local autonomy. If fiscal decentralization strengthens efficient competition among local governments, ultimately leading to balanced national development, then local autonomy will yield positive results for the nation as a whole. Therefore, decentralization may be more efficient than centralization in increasing social welfare. On the other hand, if local decentralization incites excessive competition among local governments, leading to inefficient allocation of national resources or political and administrative corruption, then local decentralization will ultimately reduce the welfare of society as a whole.

Which argument is correct? There is no definitive conclusion yet. Whether fiscal decentralization and balanced development are complementary or conflicting depends heavily on the arguments of scholars and the evidence they present. First, there are positive arguments suggesting that fiscal decentralization will lead to balanced development and contribute to the overall expansion of social welfare (Tiebout, 1956; Oates, 1972). Tiebout (1956) argues that in decentralized local governments, the principle of "voting with one's feet" increases the scope of individual choice and thus the potential for enhancing social welfare, as the number of local governments increases and the tax-service packages offered by local governments diversify. Oates (1972) also argues that a decentralized system is more efficient in promoting regional economic development by increasing the efficiency of local government service provision through competition. In addition, there are positive views that fiscal decentralization will ultimately enhance regional social welfare because fiscal autonomy granted to local governments will expand opportunities for attracting businesses by providing incentives for active investment (Martinez-Vazques and McNab, 2003), or because local governments will strengthen their policy efforts, conscious of voters who consider economic development as a criterion for their voting choices (Qian and Weingast, 1997) (Bahl and Linn, 1992; Ebel and Yilmaz, 2002; Von Braun and Grote, 2002).

On the other hand, there are also negative views suggesting that fiscal decentralization may lead to uneven regional development (Prud’homme, 1995; Manor, 1999) or that the expanded discretion of local governments may lead to corruption and inefficiency in public service provision (Bardhan and Mookherjee, 2001). Prud’homme (1995) and Tanzi (1996) argue that excessive competition among local governments may lead to an expansion of local government spending and deficit financing, thereby exacerbating the central government's fiscal difficulties. There are also negative views that fiscal decentralization hinders balanced development, with studies by West and Wong (1995) being representative examples.

Domestic research also tends to be clearly divided into pro and con arguments regarding the relationship between fiscal decentralization and balanced development. Many scholars, including Lim Sung-il (2008), Ju Woon-hyun & Hong Geun-seok (2011), Cho Min-kyung & Kim Ryeol (2014), Kwon Oh-seong (2004), and Park Byung-hee (2006), have presented research findings indicating that fiscal decentralization has a positive impact on fiscal disparities and economic growth. However, some scholars, such as Lee Yong-mo (2004), Choi Byung-ho & Jeong Jong-pil (2001), and Oh Si-hwan & Han Dong-hyo (2009), have presented research results suggesting that fiscal decentralization has a negative impact on economic growth. Of course, there are also scholars like Choi Won-ik (2008) and Kim Eui-seop & Lee Seon-ho (2014) who have reached neutral conclusions, stating that it is difficult to establish a significant relationship between fiscal decentralization and economic growth.

Who among them is right is not important in the context of this paper. The point is that, regardless of who is right or wrong, such a line of questioning does not significantly impact the desire of residents living in the regions to improve their quality of life or alleviate their relative deprivation compared to residents of the Seoul Metropolitan Area. For regional residents living difficult daily lives in impoverished regions, academic debates on the relationship between fiscal decentralization and balanced development are no different from meaningless debates about Columbus's egg. Practical experience gained in the field of local autonomy is more important than such unnecessary debates.

The institutional improvements needed in the relationship between the central and local governments span the entire field of local autonomy and are indeed very broad. Autonomous decentralization, resident autonomy, and balanced development are representative major areas, and the issues that have been at the forefront in each area are diverse. Therefore, it seems futile to address all these areas to properly discuss the success conditions for the new president in the relationship between the central and local governments. Thus, rather than trying to cover all policy areas related to local autonomy in a comprehensive manner, it is necessary to focus on the most critical areas and address the issue of institutional improvement. In the field of local autonomy, which is practically implemented in the regions, what is the most urgent area among autonomous decentralization, resident autonomy, and balanced development? Most scholars studying local autonomy and most civic society activists leading civic movements for local autonomy do not hesitate to point to the issue of the widening gap between the Seoul Metropolitan Area and non-metropolitan areas, i.e., balanced development, as the most urgent policy area for local autonomy. Developed countries in local autonomy have inter-regional development gaps that are incomparable to the gap between the Seoul Metropolitan Area and non-metropolitan areas in Korea. Therefore, academic debates on the relationship between fiscal decentralization and balanced development, using such countries as subjects of analysis, tend to emphasize the argument that balanced development is possible through strengthening fiscal decentralization.

However, in Korea, not only is the gap between the Seoul Metropolitan Area and non-metropolitan areas too large, but the gap between local cities is also significant, so there is no guarantee that strengthening fiscal decentralization will directly lead to balanced development. While fiscal decentralization is important, fiscal decentralization without balanced development is likely to exacerbate regional disparities, which is at least the general consensus in our academic community. Institutional improvement in the area of resident autonomy is also important, but it is possible only with more fundamental changes in consciousness and political culture. In this regard, focusing this paper on the new policy paradigm that the new president should create in the area of balanced development can be considered a last resort born out of the concerns of the Korean local autonomy field.

From Evenness to Balance: A Paradigm Shift is Needed to Reduce Gaps Through Gaps

Regional policies pursued by successive governments since the participatory government have led to indiscriminate dispersed investments, driven by an obsession with mechanical balance in the form of "sharing the pie" and by the rosy illusions created by new balanced growth and endogenous regional development theories that emerged as a reaction to the failure of existing paradigms. This includes the relocation of public institutions and the construction of innovation cities during the participatory government and the regional new deal projects promoted by the Moon Jae-in administration. The balanced development budget (approximately 10 trillion won annually) [6], which has shrunk due to the influence of centralized bureaucracy, is divided according to the principle of mechanical balance, or evenness, on a '1/n' basis, and is wasted without significant results. There are even instances where budgets intended for regions flow back to the Seoul Metropolitan Area. A joint analysis by Kookmin Ilbo and the NARA SARAM Institute of the balanced development budget by city, county, and district over the past 14 years revealed that the balanced development budget invested in Seoul increased by a staggering 527%, from 36.1 billion won in 2008 to 226.7 billion won this year [7].[6]is divided according to the principle of mechanical balance, or evenness, on a '1/n' basis, and is wasted without significant results. There are even instances where budgets intended for regions flow back to the Seoul Metropolitan Area. A joint analysis by Kookmin Ilbo and the NARA SARAM Institute of the balanced development budget by city, county, and district over the past 14 years revealed that the balanced development budget invested in Seoul increased by a staggering 527%, from 36.1 billion won in 2008 to 226.7 billion won this year [7].[7]

As national balanced development policies lost their direction and drifted in the logic of "pursuing mechanical balance," the regional gap between the Seoul Metropolitan Area and non-metropolitan areas widened further. In particular, the decline of the Southeastern Greater Economic Zone, which, along with Seoul, led the "Miracle on the Han River" based on the past authoritarian developmental state model, has accelerated. The Southeastern Greater Economic Zone, which once formed a pillar of Korea's economic growth, is losing momentum in its growth engine amidst the crisis of regional extinction due to the intensifying concentration in the Seoul Metropolitan Area and the dispersed investment of limited national resources based on the mechanical balanced development paradigm.

What is the problem? The clue to the answer can be found in the limitations of the existing perception of balanced development. Balanced development is defined as "the balanced development of regions, where balance here does not only mean economic balance but also a state where population, politics, culture, and education are evenly distributed" (Ma Kang-rae, 2018, p. 16). The Framework Act on Balanced National Development in Korea defines balanced development as "promoting equal development opportunities among regions and enhancing the self-reliant development capabilities of regions to improve the quality of life, foster sustainable development, and realize a society where the entire nation thrives with its own unique characteristics."

Behind this perception of balanced development lies a biased view of "balance" itself. There can be different interpretations of balance. In economics, balance (equilibrium) can be understood as a "state where the current state tends to persist," leading to optimal resource allocation and maximized efficiency. From this perspective, the interdependence arising from the scale of aggregation among large cities, small and medium-sized cities, and rural areas tends to be perceived as a natural phenomenon. On the other hand, the perspective that understands balance in terms of "evenness" tends to excessively emphasize equity, viewing a state where all local governments possess the same level of economic power and political influence as true balance. Neither perspective on balance tells the complete truth on its own. However, balance that leans too heavily in one direction is highly likely to entail many problems. The issue is that the concept of balance used in Korea's national balanced development tends to lean towards the latter, evenness. This is where we find the reason for seeking a paradigm shift in the new perspective on balanced development.

In this context, the necessity of establishing a new balanced development policy paradigm based on the principle of "selection and concentration" is emphasized. The dispersed small-scale investments in each region/sector based on the existing mechanical balance lead to high policy acceptance among the policy recipients (regions/sectors). However, in terms of policy efficiency and effectiveness as measured by return on investment, it is difficult to expect "economies of scale" and "synergy effects." Therefore, the new balanced development policy paradigm needs to set a strategic direction that seeks to maximize efficiency in the long term through selective and concentrated investment of national resources (e.g., Special Account for Balanced National Development, Regional Cooperation Development Fund) for balanced development, based on the principle of "selection and concentration."

So, what should be selected and where should we concentrate? The answer can be found in the experiences of the past developmental state era. For example, consider the measures to revive the dormant growth engine of the Southeastern Greater Economic Zone. The "Miracle on the Han River" in the 1960s-70s was possible through the simultaneous growth of the Seoul Metropolitan Area and the Southeastern region based on the development paradigm centered on the Gyeongbu Axis, and through the efficient division of roles in the economic growth process. However, in the 1980s, under the pretext of alleviating concentration in the Seoul Metropolitan Area, Busan was included in the urban redevelopment target areas. This led to the collapse of Busan's manufacturing base, which was already struggling to adapt to industrial restructuring, and ultimately halted the growth engine of the Southeastern Greater Economic Zone. As a result, the concentration in the Seoul Metropolitan Area and the resulting distorted, unbalanced growth centered on the Seoul Metropolitan Area accelerated. The gap between the Seoul Metropolitan Area and non-metropolitan areas widened, and the crisis of regional extinction deepened. Therefore, efforts are needed to find new growth engines for Korea by revising the balanced development strategy to reconstruct the development paradigm centered on growth poles along the Gyeongbu Axis, based on the theory of unbalanced growth that led to the "Miracle on the Han River," into a new 21st-century version. In other words, why not have the new president dream of a paradigm shift in balanced development, aiming to open a new era of "Gyeongbu Axis Renaissance" by reviving the growth engine of the Southeastern Greater Economic Zone, which has weakened and lost competitiveness in the process of restructuring the neoliberal world order, and making it a growth pole?

Of course, there may be criticism that this new balanced development paradigm, based on the reconstruction of the Gyeongbu Axis through the revival of the Southeastern Greater Economic Zone, is merely a rehashing of old development paradigms. The backlash from regions not designated as new growth poles will also be considerable. However, it is undeniable that the starting point that led to the current gap between the Seoul Metropolitan Area and non-metropolitan areas was the existence of Seoul as a powerful growth pole. Furthermore, the period when the Southeastern Greater Economic Zone, centered on Busan, was functioning properly was also the period when the regional gap between the Seoul Metropolitan Area and non-metropolitan areas was smallest. Moreover, the rapid shift towards a unipolar concentration in the Seoul Metropolitan Area began after the growth engine of the Southeastern Greater Economic Zone (especially Busan) stalled, leading to the current irreversible regional gap with non-metropolitan areas. These are facts that the new president, who must contemplate the balanced development paradigm, should definitely consider.

From the Local Autonomy Act to the Constitution: Let's Boldly Change the Big Picture First, Constitutional Amendment is the Shortcut

At the core of the fundamental limitations of our local autonomy lies the fundamental limitation of the current Constitution, which governs the framework of the local autonomy system. The local autonomy as embodied in the current Constitution cannot escape criticism as being merely nominal autonomy in practice. This is because, despite numerous attempts at institutional change and improvement through over 30 amendments to the law, our local autonomy system still suffers from many systemic flaws. The flaws in the local autonomy system of the current Korean Constitution are even more pronounced in the specific provisions of the Local Autonomy Act, which is based on our Constitution. None of the four major autonomous rights that local governments can enjoy are fully guaranteed. In particular, the areas of autonomous legislative power and autonomous financial power, which are crucial, are even more severely constrained, with local ordinances confined within the limits of not exceeding the scope of laws and regulations. The 7:3 strengthening of autonomous financial power promised by the Moon Jae-in administration remains a distant wish for now.

What is the surest way to remove these problems in our current local autonomy system, which is embodied through the Constitution and laws, especially the institutional control mechanisms that hinder the policy will and efforts of local governments to approach balanced development from an endogenous perspective? Naturally, amending the superior law, the Constitution, is the shortcut. This is precisely why there has been broad consensus on the need for constitutional amendment for decentralization. Although it was frustrated by failing to pass the high threshold of the 20th National Assembly, if the new president can persuade the National Assembly to revive the discussion on constitutional amendment for decentralization that the Moon Jae-in administration pursued, and if the ruling and opposition parties can unite to achieve constitutional amendment for decentralization, most of the fundamental problems of our local autonomy could be resolved immediately, and our local autonomy could finally reach the stage of establishment.

4. How to Implement a New Paradigm for Balanced Development

Let's Grow the Pie for Balanced Development First

Since the establishment of the Special Account for Balanced Development, approximately 144 trillion won has been invested in balanced development over the past 16 years, and close to 10 trillion won is still invested annually in balanced development. Some point to the scale as large and criticize it as a waste of budget. However, it seems unreasonable to criticize the investment of resources, which account for less than 2% of the national budget annually, as a waste of budget when trying to alleviate the regional disparities that hinder national development. If reducing regional disparities and achieving balanced national development is truly the key to national development, can the 10 trillion won budget for balanced development be considered large compared to the national budget of over 550 trillion won? If balanced development can truly become a new growth strategy for national development and can revitalize declining regions, shouldn't at least 10% of the budget, comparable to defense spending, be invested? Therefore, the first step should be to consider gradually increasing the overall budget for balanced development, that is, growing the pie for balanced development. This is because the regional situation is not favorable.

Increasing the budget for balanced development, even if pursued gradually, is highly likely to face strong opposition from budget officials responsible for government finances, as well as politicians in the Seoul metropolitan area. The new president may even risk a political crisis by paying a considerable political cost. Therefore, instead of directly increasing the budget size of the Special Account for Balanced Development, it may be more effective to establish a new special account or to gradually increase the size of the special accounts for regional balanced development, which are established and operated by individual metropolitan local governments through their own ordinances, through strong fiscal decentralization policies.

Furthermore, the overall pie of the balanced development budget can be expanded by increasing indirect budgets related to balanced development included in the budgets of various government ministries. To this end, introducing a related system to orient government budget operations towards balanced development, so that central government officials who are likely to maintain a negative stance on increasing the balanced development budget can adopt a proactive attitude towards balanced development, would be one method. The introduction of a '(tentative name) Gender-Responsive Budgeting for Balanced Development System' to implement balanced development as a basic principle of national fiscal operations is one such method (Korea Institute for Industrial Economics and Trade, 2018). To introduce the Gender-Responsive Budgeting for Balanced Development System, it is necessary to first closely evaluate the specific policy effectiveness of the already implemented Gender-Responsive Budgeting System and derive directions for improvement, and then, reflecting the improvements derived from the evaluation results of the Gender-Responsive Budgeting System, establish specific operational standards for an effective '(tentative name) Gender-Responsive Budgeting for Balanced Development System'. In addition, it is necessary to instruct relevant ministries to prepare specific and long-term action plans and implementation roadmaps for the successful establishment of the '(tentative name) Gender-Responsive Budgeting for Balanced Development System'.

It is also necessary to increase the pie of authority for balanced development by unifying the national balanced development promotion system (including the refinement of the legal system) through the establishment of a national body with substantial administrative authority for the national balanced development promotion organization. To this end, while seeking to make the National Balanced Development Committee independent of ministries, it is necessary to upgrade the status of the Blue House's autonomous decentralization and balanced development-related affairs, currently handled by secretaries, by establishing a dedicated senior secretary's office.

Let's Change How We Divide the Pie for Balanced Development

While it is important to grow the overall pie for balanced national development, improving the method of dividing the enlarged pie is also necessary. Currently, the balanced development budget is operated in four accounts: Regional Autonomous Account, Regional Support Account, Sejong Special Self-Governing City Account, and Jeju Special Self-Governing Province Account. Excluding the special accounts for Sejong and Jeju, only the Regional Autonomous and Regional Support accounts can be considered genuine balanced development budgets. The problem is that these budgets are distributed in a 'share-the-pie' manner based on the principles of mechanical balance and equality, making it difficult to concentrate investment in regions that require intensive balanced development budget input to create growth momentum. Therefore, along with the '(tentative name) Gender-Responsive Budgeting for Balanced Development System', it is necessary to establish new, specific, and flexible budget operation guidelines to implement the 'principle of selection and concentration' in the operation of national balanced development-related budgets.

As observed earlier, due to the 'share-the-pie' allocation of the current balanced development budget, the Seoul metropolitan area, which is paradoxically not a target for balanced development, is increasingly monopolizing balanced development budgets. This is pointed out as another problem related to the operation of the balanced development budget. This is another adverse effect of the concentration in the Seoul metropolitan area, and the new president needs to pay attention to correcting this paradoxical situation.

What method can be used to improve such a paradoxical situation? One method may be to improve the preliminary feasibility study system, which is currently mandatory for the efficient use of national finances.[8]Criticism has been raised that the current preliminary feasibility study system, which solely reflects a simple cost-benefit structure under the guise of economic efficiency, plays a significant role in the increasing concentration of balanced development budgets in the Seoul metropolitan area (Lee Se-jin, 2021). While it is true that the criteria for selecting projects subject to preliminary feasibility studies include consideration of regional balanced development factors, and the Ministry of Economy and Finance made efforts to improve it in April 2019 by applying different evaluation weights for the Seoul metropolitan area and non-Seoul metropolitan areas and changing the regional backwardness assessment for non-Seoul metropolitan areas from a deduction system to a point-based system, it is undeniable that most projects that have passed the preliminary feasibility study so far have been concentrated in the Seoul metropolitan area, leading to criticism that the system is rather fueling the concentration in the Seoul metropolitan area and hindering balanced development. Therefore, it is necessary to abolish the preliminary feasibility study system or significantly expand the economic efficiency weight for non-Seoul metropolitan areas to strengthen reverse discrimination against the Seoul metropolitan area, thereby improving the situation where the preliminary feasibility study system is degenerating into a tool for concentration in the Seoul metropolitan area or an obstacle to balanced development. If the above two improvements are difficult, establishing a special law to exempt balanced development-related projects from preliminary feasibility studies based on the concept of selective balanced development could be another method.[9]

Furthermore, proposing a two-track utilization plan for the Special Account for Balanced Development is also an issue to consider in pursuing a new paradigm for balanced development. The current Special Account for Balanced Development tends to adhere to the principle of 'share-the-pie' budget allocation, which is close to mechanical balance. Therefore, it is necessary to provide financial support for new growth hub regions to recover their competitiveness as growth hubs through selective benefits from the Special Account for Balanced Development by operating the Special Account for Balanced Development in a bifurcated manner into 'balanced investment budget' and 'selective and concentrated investment budget' in line with the new balanced development paradigm.

Let's Open All Paths to Grow the Pie for Balanced Development

Growing the pie for balanced national development is difficult with the central government's power alone. It is also important for the sustainability of balanced development that local areas themselves strive to grow their own pies. In this context, the new paradigm for balanced development proposed by the author requires various institutional devices to support the efforts of local governments for autonomous and endogenous development and growth, while based on the selective and concentrated investment of balanced development resources by the central government.

Possible institutional devices include the following: First, it is necessary to recognize economic autonomy for the establishment of a self-reliant and endogenous development base for regions by granting (special) local governments diplomatic rights in the economic and trade sector. This is an issue that is intertwined with the constitutional amendment for decentralization that the new president will pursue.

Second, for local governments to achieve endogenous development, it is necessary to amend the Special Act on National Balanced Development to revitalize the functions and ensure the sustainability of regional promotion organizations for balanced development (such as Regional Innovation Councils, Metropolitan Economic Zone Development Committees, and Regional Living Area Councils).

Third, it is necessary to reconstruct the national balanced development strategy using special local governments (metropolitan alliances) to activate discussions at the metropolitan level for endogenous development. This is also a concrete way to realize the intent of the full amendment of the Local Autonomy Act, which allows two or more local governments to jointly handle affairs for common economic purposes on a metropolitan scale.

Fourth, it is necessary to establish a legal support system for revitalizing regional finance, such as attracting local capital investment, to secure sufficient resources for promoting endogenous regional development strategies. Furthermore, by linking with the Hometown Love Donation system or making efforts to attract capital from China and overseas Korean residents, we aim to open the way for specific metropolitan economic zones that best align with the principle of selection and concentration to independently secure resources for endogenous development through the creation of a 'Win-Win Inclusive Development Fund' led by 'Special Metropolitan Administrative Alliances' guaranteed by the fully revised Local Autonomy Act.

Let's Awaken and Share the Importance of the Pie for Balanced Development

As mentioned earlier, the transition to balanced development policies based on the principle of selection and concentration will face considerable opposition from regions excluded from growth hubs, as well as central bureaucrats and politicians in Yeouido who are fixated on the ideology of Seoul metropolitan area-centricity. The new president will need to develop persuasive arguments for government ministries and the public, aiming to reach a social consensus that the development of specific metropolitan economic zones, which are the targets of selection and concentration, will be the starting point of a new national development paradigm that brings about 'the second miracle on the Han River.' It is also necessary to internalize this and strengthen the resolve to pursue related policies unwaveringly during the term of office. The new paradigm for balanced development proposed by the new president needs to be developed into concrete development strategies and roadmaps for regional development, where the development of specific metropolitan economic zones with competitiveness, beyond mere regional egoism, leads to the development of the entire nation, and this needs to be persuaded to the central government, other regional metropolitan governments, and local residents. To this end, the following specific efforts are required:

First, it is necessary to plan a '(tentative name) Social Dialogue for a Great Transformation of National Balanced Development' (hereinafter referred to as 'Social Dialogue') program to seek social consensus on the new balanced development paradigm and present concrete implementation plans. This social dialogue needs to broadly involve stakeholders from various public and private sectors, including the four major local government associations (Association of Governors, Association of Mayors and County Governors, Association of District Council Chairpersons, Association of City Council Chairpersons), ruling and opposition parties, relevant standing committees of the National Assembly, national decentralization movement organizations, the Presidential Committee on Balanced National Development, the Committee on Autonomous Decentralization, the Ministry of Economy and Finance, and the Ministry of the Interior and Safety.

Second, it is necessary to explore a cooperative governance system for a 'Permanent Public-Private Consultative Body for Non-Seoul Metropolitan Areas' to revise the '4th National Balanced Development 5-Year Plan (2018-2022)' and establish the '5th National Balanced Development 5-Year Plan (2023-2027)' reflecting the new balanced development paradigm centered on competitive metropolitan economic zones based on the principle of selection and concentration. The new balanced development paradigm is highly likely to cause a new adjustment in the spatial planning of the entire territory. Therefore, the new president needs to clearly instruct the revision of the '5th National Balanced Development 5-Year Plan,' which will be approved after taking office, immediately upon inauguration, with a strong policy will. Of course, it would be a more desirable approach to fully discuss such plan revisions with relevant ministries during the coordination of national agendas within the presidential transition committee.

Third, it is necessary to seek the understanding and cooperation of local governments excluded from new growth hubs by presenting a 'figure-eight (Gyeongbu axis, Gangho axis, Southern Coast axis, Northern Border axis) balanced development axis plan' centered on the Gyeongbu axis. This plan, to be proposed by the new president, should encompass concrete development strategies for each axis, reflecting their respective strengths and opportunities, including plans for the regeneration of industrial bases and the fostering of new industries in the Gyeongbu axis led by the Southeast Metropolitan Economic Zone, carbon-neutral development strategies centered on ecology, environment, and tourism in the Gangho axis, and specialized regional development strategies for the Southern Coast axis and the Northern Border axis.

5. Present a Substantive Vision for Balanced Development at the Brink of Regional Extinction

No matter how strong a policy will the new president may have to pursue policies for autonomous decentralization and balanced development after taking office, based on past experiences, it is highly likely that they will face significant resistance and challenges from both internal and external sources. Where will such resistance and challenges come from? First and foremost, it is highly likely that they will originate from within the policy groups responsible for formulating and implementing the new government's regional policies. This refers to bureaucratic policy delays that fail to keep pace with the new president's intentions. Even in the cases of the Participatory Government and the Moon Jae-in administration, which most strongly implemented policies for autonomous decentralization and balanced development, there were strong organized voices of opposition to overly reformist regional policies within the Blue House staff and government ministries. In particular, for balanced development policies that inevitably require the input of substantial national resources, resistance from fiscal officials, including the Ministry of Economy and Finance, which acts as a gatekeeper, is highly likely. Furthermore, the new paradigm for balanced development policies pursued by the new president, namely the paradigm of selective balanced development, may be difficult for government officials accustomed to the logic of mechanical balance to accept. Therefore, resistance from the bureaucratic system, led by the Ministry of Economy and Finance, will be considerable, and thus, along with the president's strong reformist will, more rational persuasive efforts will be required. This possibility of resistance can also arise from the political circles in Yeouido. For politicians representing constituencies in the Seoul metropolitan area, which accounts for nearly half of the regional seats, balanced development is likely to be perceived as a handout to non-Seoul metropolitan areas. Therefore, lawmakers with constituencies in the Seoul metropolitan area will likely join forces to neutralize the new president's balanced development policies. This is likely to exacerbate delays in various reform legislation related to balanced development pursued by the new president. Consequently, the new president will inevitably face the dual burden of persuading internal bureaucrats and achieving consensus among political forces in the National Assembly.

Perhaps the greatest threat the new president will face in pursuing balanced development policies will be the strong backlash and resistance from residents of marginalized regions during the process of achieving sufficient consensus and social agreement from the public. The issue of local autonomy is understood as being close to the basic ideology of a democratic society. However, in Korea, the issues of autonomous decentralization and balanced development tend to be divided along the ideological lines of conservatism and progressivism. The research by Cha Jae-kwon and Ji Byung-kwon (2018) clearly illustrates this tendency. A meta-analysis of various surveys on local decentralization confirmed that the level of awareness of local decentralization is higher in the Honam region than in the Yeongnam region, and higher among those with progressive political leanings than among those with conservative political leanings. The task given to the new president is how to extract the national agenda of autonomous decentralization and balanced development, which is trapped in this ideological division, and make it understood as a common national task that transcends ideology.

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[1] Refers to an index that comprehensively evaluates human resources, knowledge creation, innovation utilization, and intellectual property rights.

[2] According to the research by Lee Sang-ho (2016), who first developed the population extinction risk index, the index is calculated by dividing the female population aged 20 to 39 by the population aged 65 and over. If the value of this index is 1.0 or less, it means the region is entering a stage of decline risk, and if the index is 0.5 or less, the region is considered to be at high risk of extinction.

[3] An analysis of 12 counties within the top 5% of population extinction risk, by township and village, revealed that all 138 townships and villages were confirmed as high-risk areas for extinction. This indicates that population extinction is predominantly occurring in underdeveloped township and village areas (Ko Moon-ik, Kim Geol 2021).

[4] Article 120, Paragraph 2 of the Constitution of the Republic of Korea clearly states the nation's (central government's) obligation for regional economic development by stipulating that "The territory and resources shall be protected by the State, and the State shall establish necessary plans for their balanced development and utilization." Article 123, Paragraph 2 of the Constitution also explicitly states the nation's obligation for regional economic development by stipulating that "The State shall be obligated to foster regional economies for the balanced development of regions." Article 122 grants the State (central government) the right to impose necessary restrictions and obligations, as prescribed by law, for the efficient and balanced use, development, and preservation of the national territory, which serves as the foundation for the production and lives of all citizens.

[5] While former President Roh Moo-hyun attended 29 out of 72 meetings of the Balanced Development Committee, former President Lee Myung-bak attended 8 out of 49 meetings, and former President Park Geun-hye attended 2 out of 27 meetings, President Moon Jae-in, who claimed to inherit the participatory government, reportedly rarely attended the Balanced Development Committee meetings during his term (Hankyoreh, May 6, 2019, https://www.hani.co.kr/arti/area/area_general/892729.html, accessed September 23, 2021).

[6] Only the Special Account for Balanced Development is reflected in the balanced development budget. In reality, it is difficult to accurately calculate the government budget actually invested in balanced development as it is included in the individual projects of each ministry. Generally, it can be assumed that approximately 20 trillion won of the government budget is invested annually in balanced development, including such hidden budgets.

[7] Calculated as a percentage, this increased from 0.41% to 2.46%, which is more than Gwangju (153.5 billion won), Daejeon (168.2 billion won), and Ulsan (138.6 billion won). Following Seoul, the balanced development budget for Gyeonggi Province has also sharply increased, rising by 67.5% from 630.3 billion won in 2008 to 1.0558 trillion won this year (http://news.kmib.co.kr/article/view.asp?arcid=0924195959, accessed June 23, 2021).

[8] The preliminary feasibility study is a system first introduced in 1999 to verify and evaluate the preliminary feasibility of large-scale new public investment projects, thereby promoting transparent and fair new investments in fiscal projects, preventing budget waste due to indiscriminate investment, and enhancing the efficiency of fiscal operations. Its legal basis is the 'State Finance Act' enacted in 2006. Since the introduction of this system, a total of 932 investigations have been conducted as of the end of 2020, with a total project cost of 426.9 trillion won. Among the 932 investigations, 592 were evaluated as feasible (Lee Se-jin 2021).

[9] The reason why a special act is necessary to exempt preliminary feasibility studies is that, to prevent the arbitrary implementation of the preliminary feasibility study system, the scope of preliminary feasibility studies and exemptions were directly stipulated in the law through an amendment to the 'State Finance Act' in January 2014, and the details and reasons for exemptions are to be submitted to the National Assembly.

■ Author: Cha Jae-kwon_Professor of Political Science and International Relations at Pukyong National University. He holds a Ph.D. in Political Science from the University of Kansas. He has served as Director of the Research Institute for Decentralization and Development at Pukyong National University, President of the Korean Association for Local Politics, and President of the Korean Association for Civic Ethics. He is currently a specialist member of the Presidential Committee on Autonomy and Decentralization. His research primarily focuses on comparative politics (political processes/political economy) and local politics. His major works include "Algorithmic Democracy in the Age of the Fourth Industrial Revolution: New Paradigms for Citizen Participation and Engagement" (2021), "The Counterattack of Regions, A Year's Record" (2020, co-authored), "The Candlelight Protests and Multitude Movements" (2019, co-authored), and "Decentralization and Balanced Development: Observations by Political Scientists" (2018, co-authored).

■ Editor: Jeon Ju-hyun_EAI Researcher

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