Basic Report

The regional development policy in South Korea has been emphasizing the ‘growth poles.’ It is more efficient to concentrate limited resources to a few regions so that they can grow rapidly and be the driving force for the national economic development. This policy was effective, as South Korea achieved breathtaking economic development in 1970s and 80s. However, the side effects also emerged. Seoul and metropolitan area are excessively concentrated in terms of population and resources which resulted in housing problems, congestion, and pollution, while the other regions are neglected in national development scheme. Recognizing this imbalanced distribution, the national government initiated Balanced National Development Policy and they established a Special Accounts for that in 2003. The special accounts consist of three accounts: local autonomous account, local support account, and Jeju & Sejoeng Account. The local autonomous account supports 43 block grant projects, 37 of which are Si/Do autonomous projects and 6 are Si/Gun/Gu autonomous projects based on the initiator. Here, the Ministry of Economy and Finance has the power to distribute budget for block grant. This makes little room for local governments to take initiative. Since the local governments are keen to regional development needs, it is more effective to give them more autonomy not only in project planning and executing but also in financial support.
   In this sense, this study focus on 43 block grant projects (especially 37 Si/Do autonomous projects) under local autonomous account, how to make it more effective for the local governments to take initiatives. The aim of this study is to provide strategies for effective and practical decentralized regional development within current special account system. The remainder of this study are as following.
   The chapter 2 provides the definition of Decentralized Balanced National Development based on the literature review on theories regarding balanced development and decentralization. It also reviews previous studies on balanced development in Korea. In chapter 3, Balanced National Development Policy is analyzed. It provides how the policy changed and what they have achieved in each presidency. Then it focus on current policy and special account and analyzed the limitation in planning and selecting, executing and budgeting, and evaluating process. The chapter 4 presents the survey results on local official’s perception and opinion on the Balanced National Development Policy and the Special Account. The chapter 5 is in-depth case study on locally managed balanced development policy and governance. Jeonbuk and Chungbuk are selected for the case study because they have their own Local Balanced Development Ordinance and Special Account.
   First finding from the in-depth cas study is that Jeonbuk and Chungbuk established their own system for effective Si/Do autonomous projects execution. They have tailored criteria and standards based on local characteristics for selecting, budgeting, evaluating, and consulting for the projects. Second finding is that they formulated specialized strategies for balanced development emphasizing the local uniqueness. There are regions that lack people, community, and resources and they have less autonomous development potential. For these regions, Jeonbuk and Chungbuk established long-term master plan for Si/Do autonomous projects. Third finding is that there are differences in the initiatives. Jeonbuk unified the initiative under the planning division while Chungbuk established a task force team who collaborates with budgetary department, planning division, project department, and other related departments within the local government. Finally, fourth finding is that both Jeonbuk and Chungbuk established legal and institutional ground for effective balanced development. They enacted ordinance and set up their own special account for local-initiated Balanced National Development Policy.
   The chapter 6 provides policy recommendations and practical strategies for more effective and practical local-initiated Balanced National Development Policy. Short-term strategy is that the local governments need to set up an initiative of their own and the national government establish a institutional ground to support them. This institutional ground can be a new criteria for Si/Do autonomous projects so that the Ministry of Economy and Finance can provide funds. Also the national government needs to reorganize the institution so that the national government’s departments do not interfere with local government’s operation. The long-term strategy is to reform the operating system so that the local governments can take the initiative for Si/Do autonomous projects under the local autonomous account. For that several institutional changes are needed: reorganizing the criteria for block grant projects, reforming the local autonomous account, and improving the matching ratio of local fund.