[Public Opinion Briefing 41-1] Responsibility for Economic Deterioration and Prospects for MB's Second Year

[Public Opinion Briefing 41] Table of Contents 

[1] The Top Issue of the First Year: Perception of the "Economy"

[2] Where Should the Lee Myung-bak Administration's Ideological Stance Be in its Second Year?

[3] Public Opinion Trends on Current Issues

[4] Assessment and Prospects for the MB Administration Entering its Second Year

Perception of the "Economy" as the Top Issue of the First Year

○ Household economic sentiment has worsened; compared to six months ago, 3.4% said 'it has improved,' 40.9% said 'no significant difference,' and 56.6% said 'it has worsened.'

○ Attribution of responsibility for perceived economic deterioration is divided: 'Successes are due to individuals, failures are due to external factors.'

- Responsibility for improvement. 47.5% attributed it to individual citizens, 15.8% to the government, and 14.8% to corporations.

- Responsibility for deterioration. 43.8% attributed it to the global economy, 27.0% to the government, and 6.9% to individual failings.

○ People are not optimistic about the household economy in the next six months; 16.2% expect 'improvement,' 54.8% expect 'no significant difference,' and 28.2% expect 'deterioration.'

Deterioration of Household Economic Sentiment: Who is Responsible?

Q. Compared to six months ago, how would you describe your current household economic situation?

Compared to six months ago, 3.4% perceived their household economy as 'improved,' 40.9% as 'no significant difference,' and 56.6% as 'worsened,' indicating a dominant perception that the economic situation has significantly deteriorated. So, who do citizens believe is responsible for these changes in household economic conditions? Where people attribute responsibility for changes in the economic situation (economic attribution) can indicate how economic factors will influence presidential approval ratings or voting behavior. If the responsibility for economic conditions is attributed to the president or the ruling party, it is highly likely to result in political actions supporting the opposition party in national administration evaluations or elections.

[Figure 1] Perception of Household Economic Situation Compared to Six Months Ago (%)

Responsibility for household economic deterioration is more attributed to the global economic environment (43.8%) than to the government (27.0%).

Q. You mentioned that your household economic situation has ( ) compared to six months ago. Which of the following do you believe has had the greatest impact?

According to the results of the economic sentiment attribution survey conducted by EAI since 2006, there has been a clear tendency to attribute economic improvements to the private sector, such as 'corporations' or 'individuals,' while attributing deteriorations to the 'government' or 'political circles' (Anderson 2005; Jeong Han-wool 2007, EAI website). This survey also showed a tendency for people to attribute improvements in household economy to individual citizens (47.2%), while attributing them to the government or political circles received only 15.8% and 8.4% respectively. This confirms the previous pattern of internal attribution (內因論).

Conversely, the responsibility for economic deterioration¹⁾ is attributed to external factors (外因論), similar to previous trends, by pointing to the government or global economic conditions as the primary causes rather than individual failings. Notably, the response attributing it to global economic conditions was the highest at 43.9%, followed by the government at 27.0%. Furthermore, the perception of responsibility attributed to political circles/the National Assembly was relatively high at 13.9%, while only 6.1% and 6.9% attributed it to corporations or individuals, respectively.

This suggests both positive and negative implications for the government's national administration. Firstly, the fact that citizens are focusing on environmental factors like the global economic crisis rather than solely blaming the government for economic deterioration works in the government's favor. When external crisis factors such as economic crises or wars occur, citizens tend to rally behind the government, and thus do not hold the government entirely responsible for the current economic downturn. This can be seen as the background for the Lee Myung-bak administration's recovery of approval ratings despite the economic crisis. [Figure 2]

However, because the credit for the improvement of household economic conditions is entirely attributed to individuals or the private sector, the achievements may not translate into an increase in government approval ratings even when global economic conditions improve and the government's efforts to overcome the economic crisis bear fruit.

[Figure 2] Attribution of Responsibility for Changes in Household Economic Situation (%)

Q. Compared to now, how do you think your household economic situation will be in six months?

Furthermore, the pessimistic outlook for the future economy is a burden for the government. Only 16.2% of respondents expected their household economy to improve in the next six months, while a larger proportion expected it to remain unchanged (54.8%) or worsen (28.2%). Since the psychology of economic actors is a crucial variable, not just the real economy, these pessimistic forecasts are likely to lead to a vicious cycle of further contraction in consumption and investment, negatively impacting the real economy.

[Figure 3] Outlook for Household Economy in Six Months Compared to Present (%)

Outlook by National Administration Sector: Amidst Prevailing Pessimism, What are the Government's Tasks?

Q. In the Lee Myung-bak administration, how do you think the following will unfold this year?

- Economic growth and job creation / Wealth gap / Inter-Korean relations / ROK-US relations / Democracy in our society

- 'Will worsen': Wealth gap 63.7%, Inter-Korean relations 48.9%

- 'Will improve': ROK-US relations 41.8%

Pessimistic forecasts dominate across most national administration sectors, with the exception of ROK-US relations. Concerns about the 'wealth gap' and 'inter-Korean relations' are particularly high. The response indicating that the wealth gap issue will worsen was very high at 63.7%, and nearly half (48.9%) had a pessimistic outlook on inter-Korean relations. Regarding 'economic growth and job creation,' a promise of the Lee Myung-bak administration, the response that it will worsen (33.6%) outnumbered those who thought it would improve (24.8%), with 39.6% expecting no significant change. Regarding the future of 'democracy in our society,' which has recently been a concern for the opposition and progressive groups, a majority (49.2%) believe there will be no significant change from the present, but the response that it will worsen (29.4%) outnumbered those who thought it would improve (18.1%). However, for 'ROK-US relations,' the response that it will improve (41.8%) was more than four times higher than the response that it will worsen (8.8%), indicating expectations for ROK-US cooperation following the Obama administration.

[Table 1] 2009 Outlook for the Lee Myung-bak Administration (%)

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[Figure 4] "Will Worsen" by National Task (%)

Ultimately, the Lee Myung-bak administration, which is focusing on revitalizing the economy in its second term, must concentrate its wisdom on how to ensure that the policy implementation process for overcoming the economic crisis can proceed with public consensus and communication, and how to transform the public's pessimistic perceptions into optimistic ones. This will be an important task not only for the Korean economy, which is in a state of crisis, but also for the Lee Myung-bak administration, which faces political burdens due to low approval ratings.