[Public Opinion Brief 52-1] Global Public Opinion Demands More Active Government Response

[Public Opinion Brief No. 52] Causes and Solutions of the Global Financial Crisis as Seen by the World Public

1. Global Public Opinion Demands More Active Government Response

2. Economic Crisis is a Joint Product of the US and Other Governments, Finance, and Consumers

3. Issues and Global Public Opinion Surrounding the Economic Crisis

Average of 56% in 19 Countries Worldwide Say "Government's Response to Economic Crisis is Insufficient"

South Korean citizens show the highest dissatisfaction with the government's crisis response among 12 surveyed G20 member countries

US public opinion presents conflicting assessments of government response, causing difficulties for the Obama administration

Chinese citizens: "62% say government response is appropriate"

There are arguments that interest rates should now be raised and 'exit strategies' to absorb liquidity should be implemented, as the global economy is emerging from its worst phase due to interest rate cuts and expansionary monetary and fiscal policies adopted by governments worldwide. However, according to the results of a global public opinion survey conducted by Maeil Business Newspaper in conjunction with the East Asia Institute (EAI) and the World Public Opinion (WPO), a research organization at the University of Maryland, an average of 56% in 19 countries worldwide assess the government's response to the economic crisis as insufficient. In South Korea, a striking 80% responded that the current government's response to the economic crisis is inadequate. Global public opinion and South Korean citizens believe it is too early to discuss exit strategies.

Even looking at the average for the 12 G20 countries included in this survey, 54% responded that their respective government's response to the current economic crisis is "insufficient," which is a majority. In contrast, only 28% responded "appropriate," and 14% responded "government response is excessive." Except for China, a majority in most countries perceive the government's response as insufficient. These results indicate that global public opinion recognizes the need for a more active government role to overcome the economic crisis in their respective countries.

However, in the United States, Germany, India, and China, the proportion of public opinion cautioning against excessive government response to their respective economic downturns was relatively low. Notably, in the United States, the epicenter of the global financial crisis, where various economic indicators remain unstable, the response rate for "government response is excessive" was high. While 44% responded that the government's response was insufficient in the US, a significant 31% also responded that it was excessive. This indicates that while some call for stronger government-led economic responses, there is also public criticism of excessive government stimulus policies. The existence of conflicting perceptions among the American public regarding the government's economic response implies that debates over additional economic stimulus in the US are unlikely to subside easily.

Meanwhile, it is noteworthy that 63% of Chinese citizens assess government policies as appropriate. This is likely due to the perception that China has succeeded in turning the situation around through strong, government-led stimulus measures, such as expanded export support and increased liquidity, since the global crisis. Consequently, Chinese citizens show high confidence in government policies. In China, only a minority responded that government measures were insufficient (20%) or excessive (11%). In Germany, 40% found the government's response insufficient, while 17% found it excessive. The response that it was appropriate was 35%, the second highest after China. In India, which, along with China, is expected to achieve positive GNP growth in 2009, there is a division between those who believe economic crisis measures are too excessive (37%) and those who believe they are insufficient (36%).

In contrast, South Korean citizens are among the most critical of their government's economic crisis response measures. Specifically, 80% of South Korean citizens responded that government policies to address the economic crisis were "insufficient," with only 16% finding them excessive and 3% finding them appropriate. The response that government measures were insufficient was the second highest among the 19 countries surveyed, following Ukraine (85%), and the highest among the 12 G20 countries included in the survey.

In South Korea's case, as recognized by the OECD, it is one of the countries implementing the most aggressive stimulus measures. However, these results demonstrate a significant gap between the economic policies the government has focused on and public perception. It is a critical time to develop measures that allow more citizens to directly experience the benefits of fiscal expansion-driven economic stimulus.

It is difficult to consider the South Korean economy stable enough to immediately shift to exit strategies or austerity measures, and the government does not appear to intend to change its expansionary fiscal policy stance for the time being. However, preparations for potential excess liquidity or the government's fiscal deficit burden are necessary, and a transition to so-called exit strategies is inevitable at some point. If citizens do not perceive the results of government policies in this manner, the government is highly likely to face widespread public backlash once again during the subsequent policy transition.

[Figure 1] Comparison of Public Assessment of Own Government's Economic Crisis Response - 19 Countries, G20 Countries, South Korea (%)

Source: WPO, EAI, Maeil Business Newspaper (June 2009)

Note: Among the G20 countries, those included in this survey are Germany, Russia, Mexico, the United States, the United Kingdom, India, Indonesia, China, Turkey, Poland, France, and South Korea, totaling 12 countries.

[Figure 2] Public Assessment of Own Government's Economic Crisis Response in 12 G20 Countries (%)