Recent Reforms in Local Government
Government Efforts
Despite the achievement of rapid economic growth and continual commitment to balanced development, Korea encountered negative effects resulting in serious over-concentration of economic and commercial activities on the Capital areas, unseen phenomena elsewhere in the world, and extremely polarized and imbalanced territorial development.
In the Capital metropolitan region, about 47% of the population is living in 12% of the whole territorial area, within which 84% of the public authorities and institutions are concentrated. Unbalanced regional development, moreover, has caused further conflicts, hindering social unity and leading to difficulties in effectively mobilizing national energy. Undertaken by the Government, decentralization and balanced development strategies have served as the major key instruments in resolving such problems. The Roh Government has unhesitatingly stimulated Decentralization and Delocalization policies. Decentralization encourages, as we have witnessed in many OECD Member countries, local government’s autonomy by assuring the proximity to local people and by promoting a sense of ownership for the wellbeing of their local community. It also enhances efficiency in the allocation of national resources and accelerates improving national and regional competitiveness in globalized economy world. All the more, decentralization allows central government to facilitate ongoing balanced territorial development in order to both reduce regional disparities and to increase regional economic competencies.
Improving Local Democracy
Since 2005, three main elements of renewing the institutional framework were introduced in the local political arena : from 2005, the Local Referendum Act confirmed the power of councils to hold referendums, Local Ombudsman Regime and Local Petition against the abuse of local finance in 2006; and the Local Recall system to elected mayors and councillors alike will be effective, for the first time, since July of 2007, through which elected local public officials may be removed from office by the procedure of local vote.
Issues in the Near Future
Policy for Diversity
It is now necessary for Korean local government to open up a much richer variety of local democratic structures. New framework for diversity, innovation and local choice of great variety will make local government be more effective and more accountable; with the openness of the Local Autonomy Act to the reform of local government structures, locally elected officials will have greater scope to design a system of governance which is best suited to local circumstances; in the process, the central government can provide detailed guidance on the particular issues they need to address.
The Alleviation of the Over-Loaded Control by the State
Central government must without delay be prompted to ease the various and detailed State control over local self-government in order to fully benefit the spirit of the “grass roots” of local democracy in Korea.
Fiscal Reform
The theme of local decentralization has been one of the major national agendas of Participatory Government. A fiscal decentralization roadmap by Participatory Government represents three important policy directions which have been discussed in several decades by many scholars of local public finance. First, the size of the local public sector relative to the central government needs to be increased significantly. Second, the local revenue structure has to be revised toward enhancing fiscal accountabilities of heads of local governments. Third, in expenditure management, the autonomous decision making and the performance management by local governments should be emphasized rather than the standardized control by central government. For improving the local finance autonomy, Local Budgeting Directives considered as a control of central government were abolished and the overall ceiling system of outstanding local borrowing was introduced with the removal of individual approving system of local bond issuance. In addition, for enhancing local fiscal accountabilities, several new systems have been introduced or considered, such as annual local government fiscal analysis, accrual and doubleentry accounting system, resident participatory budget system, and a program budget system.
