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Public Administration

Administrative reforms 4

The People’s Government and the Kim Daejung Administration[1]
 
(1) Background
The Kim Daejung administration, known as the “People’s Government,” was the first government led by an opposition-party leader who was elected to the presidency based on a peaceful transition of power. No one could doubt the legitimacy and authority of this first truly democratic government of South Korea. Nevertheless, the new administration faced a series of dire threats at home and abroad, amid the currents of globalization, an increasingly open international economy, and the march of informatization. Most importantly, the Foreign Exchange Crisis that swept across Asia in the late 1990s seriously challenged the functioning of the newly elected government. The economic and financial crisis unfolding in Korea amplified the demand for small government and deregulation.
 

It must be remarked that the economic crisis that embroiled Korea at the time the Kim Daejung administration came to power had little to do with fiscal deficits. The Korean government had maintained a relatively balanced account until the outbreak of the financial crisis, nor was its size too big or costly. Nevertheless, the financial crisis provided the impetus for introducing more radical and active reform measures molded after the new public management theory. The International Monetary Fund (IMF), in exchange for providing the capital Korea desperately needed, requested that the Korean government undertake a series of liberal reform measures. The World Bank and other international organizations also strongly pressed for reform. The “People’s Government,” ironically, was therefore forced to endorse neoliberal reforms in contradiction to the market reality and public sentiment in Korea.
 
(2) Purposes of Reforms        
The overarching aims of the “People’s Government” were advancing democracy while simultaneously developing the market economy. President Kim Daejung, in his inauguration address, promised to achieve five central objectives through his administration, namely, reconciliation-based politics, democratic economic development, an autonomous civil society, a comprehensive defense system, and a creative national culture.
 
(3) Main Actors and Means
Unlike its predecessors that attempted partial and limited reforms by establishing various provisional committees as seemingly required, the People’s Government set out to create a full-fledged, standing governmental body specialized in public reforms. The new organization started out as the Budget Planning Committee (BPC), and was later expanded and reorganized into the Department of Budget Planning. A separate organization, named the Governmental Innovation Committee (GIC), was also launched to enforce government-wide reforms.
 

The BPC was unlike the civilian advisory board seen under the earlier Kim administration. Rather, the BPC reported directly to the President as a full administrative unit in its own right (Choi, 1998). The BPC was a result of the first organizational reform devised by the Transition Committee that came into being prior to President Kim Daejung’s inauguration. While the Transition Committee at first considered endowing the BPC with the authority to prepare budgets, that authority eventually remained with the Ministry of Finance and Economy (MFE), with the BPC specializing solely in public sector reform. The BPC nonetheless wielded sizable influence over budgets through developing basic budget guidelines.
               

At its outset, the BPC was regarded as quite innovative and reformatory in nature. A considerable number of its members were consultants, accountants, lawyers, and researchers drawn from the private sector, and BPC employees received performance and contribution-based salaries. Contrary to other governmental bodies, the BPC, like private-sector businesses, was comprised of teams specializing in different projects (Choi, 1998).
 

In the meantime, the Department of Budget (DoB), which was part of the MFE until then, merged with the BPC after a Cabinet decision to that effect. As a result of this merger, the BPC now had some power over the budget making process, and evolved from a mere presidential council into a central administrative agency in its own right. This change in status, however, meant that the DoB’s public reforms and their effects were limited to ministries and departments only, and thus were not felt by the public or included in the President’s policy agenda.
 

Moreover, the DoB had to cope with the new need for cooperation and coordination with other ministries and departments, while being aware of its limited power to shape pan-governmental reform.[2] When the DoB was still the BPC, the Chairman sought the advice of the Administrative Reform Committee, which was comprised of 20 or so members.[3] The DoB eventually absorbed the ARC as well, and was reborn as the Governmental Innovation Committee (GIC) in August 2000, reporting directly to the President.
 

The newly created GIC was a public-private partnership, consisting of 10 civilian members drawn from nongovernmental organizations, media, and other sectors of civil society, and seven bureaucrats, including ministers of the DoB, the Ministry of Government Administration and Home Affairs (MGAHA), and the Ministry of Information and Communication. The GIC included a working committee as well as a number of working groups specialized in discerning reform issues in various areas. It was distinct from its predecessor, the ARC, in that it actively sought out civilian participation. It had two special committees, the Inspection and Evaluation Committee and the e-Government Committee. The former possessed two evaluation task forces, one that reviewed the progress of innovation at ministries and departments, and the other the status of management at public corporations.
 

Aside from these bodies, the Kim administration created a host of other agencies as well for effective reform of the public sector, including the Central Personnel Committee, the Regulatory Reform Committee (RRC), the Decentralization Committee, and others. The Central Personnel Committee, established in February 1999, handled personnel matters in public administration alongside the MGA. The RRC, first placed under the direct supervision by the President in April 1998, had 12 civilian and six government officials as members. Co-chaired by the Prime Minister and a civilian, the RRC engaged in major reform activities, including preparations for drafting and enacting the Framework Act on Administrative Regulations. The Decentralization Committee, placed under the President’s supervision in July 1999, was also co-chaired by the Prime Minister and a civilian, and had 20 members in total.
 

The Kim administration waged three governmental reforms in total, each time with a different group or organization as the lead agency. The Transition Committee (i.e., the Committee for the Review and Reorganization of the Government) handled the first organizational reform.[4] The second reform was led by the chair of the BPC, who appointed a special coordinator for assessing organizational management. The third reform was led by the MGAHA, with the Minister appointing a special coordinator for correlating governmental functions. These changes in leadership throughout the reform process ultimately compromised the consistency of reform results, with the same units or bodies being abolished and created anew.
 

The diversity of reform-leading organizations spurred differing perspectives on the Kim administration’s reform efforts. Some assert that the reforms were conducted in a bottom-up manner in the early half of the administration, and in a top-down manner in the latter half. Others argue that the reforms of central administrative agencies in general mostly proceeded in a bottom-up manner (with the reform plans drafted at the bottom level and refined as they went up the hierarchy), while the reforms of central financial agencies took the top-down route (Na, 1999).
 

The truth is closer to this: the Office of Government Reform, placed within the DoB, led top-down administrative reform based on budgetary logic (Park and Lee, 2003). The Kim administration reviewed and assessed the progress of reform every quarter, and disclosed its findings publicly. The publicized results would then become the basis for drafting the budget. Where the Board of Audit found cases and evidence of negligence and complacency, the accused organization was obligated to plan and implement corrective measures on its own. The DoB would then review the progress of the corrections made, and reflect its findings in budget decisions.
 

The People’s Government is noteworthy for being the first administration to implement organizational reforms in a public manner. It is also unique for preferring the term “management innovation” to “administrative reform,” the latter being more common parlance at the time.[5] That this drive for “management innovation” was founded in greater trust in the private sector than in the public was evident in the second organizational reform pursued by the government.
 

The second reform proceeded with the help of a private-sector consulting firm, which deployed 19 assessment teams that reviewed the status of management and administration in nine areas of the government’s activities for four consecutive months. With this, the Kim administration became the first government in history to commission a private-sector firm for the purpose of assessing government performance. The firm worked with a joint team of assessors from various ministries and departments.[6]
 

Nevertheless, this system of having a private-sector firm assess governmental activities generated greater costs than benefits. The assessment lasted for only four months, despite it costing a total of KRW 4 billion. Moreover, the firm’s independence was not protected against interference by ministries and departments. Warnings of financial disadvantage were issued against assessment teams that allegedly refused to comply with given instructions. Assessment results were reversed and changed, for no apparent or acceptable reason, in reports to the Management Assessment and Coordination Committee. The firm expressed skepticisms about the merits of integrating the BPD with the DoB, but the two bodies were eventually merged nonetheless.[7]
 

The Kim administration sought to achieve far-reaching reforms, modeled after the new public management theory, in a comprehensive manner encompassing diverse fields and areas of activities. Active debates arose over such issues as privatization, organizational accountability, and deregulation, while numerous new reform measures were implemented. It was the Kim administration that turned, for the first time in history, a reform-specializing governmental unit into a full-fledged governmental agency in its own right.
 

Yet the reform drive of the Kim administration was not without its critics. Some conclude that the administrative reforms of the era were excessively focused on strengthening the President’s power and downsizing various ministries and departments, and thus failed to bring about substantial changes (Kwon, 1998). Others also point out that the reforms failed to usher in an open recruitment or hiring system, while the number of people working in civil service increased gradually again after a brief period of reduction.
 

Most importantly, critics questioned whether the new public management theory suited the conditions of Korea at the time. Others argue that the Kim administration appropriated the new public management theory only on the surface, while increasing welfare spending and related policy measures in reality.

 
[1] Descriptions herein of the administrative reforms of the People’s Government are based on research by Hwang Hyeshin (2005b).
[2] “The DoB’s call for merging the budget making function with reforms for ensuring the continuity of governmental reforms bespoke a willingness to use the power of purse to advance the cause of reform. In reality, however, the DoB’s weakening grip on budget making ultimately undermined its capability for waging and implementing reforms as well. In other words, the DoB was able to promote management innovation in a certain number of affiliated bodies which it supervised, but was limited when it came to promoting government-wide reforms…. The limits to the DoB’s coordinating power and leadership have become all the more evident now that the Administrative Reform Committee is directly advising ministers, and consequently plays a bigger role in promoting government-wide reforms.”
(Lee Changwon, Assessment of the Organizational Reforms of the Kim Daejung Administration (“Chapter 3”), Park Dongseo et al. ed. 2002.)
[3] The subcommittees included: the General Planning Subcommittee, the Subcommittee on Subsidiary Organizations, the Public Corporations Subcommittee, the Subcommittee on Supplementary Organizations and Agencies, and the Subcommittee on Other Government-Affiliated Bodies.
[4] The Transition Committee was divided between the Review Committee (with only one member) and the Enforcement Committee (comprised of nine members) between January 7 and February 24, 1998 (Kwon Haesu, 1998).
[5] The concept of market economy entailed three changes, namely, the revitalization of the market economy, the paradigm shift in administration from control to service (thereby enhancing government productivity), and the application of private-sector management techniques to government administration. (See BPC, Basic Plan for National Management Innovation (1998))
[6] The areas subjected to assessment were foreign affairs and defense, general public administration, education and culture, society, welfare, fiscal policy and finance, industry and technology, social overhead capital, agriculture and environment, and local self-administration.
[7] Administrative reforms a la the new public management theory, such as the introduction of accountable organizations, privatization, the downsizing of the bureaucracy, and performance management, were implemented on limited scales depending on the political circumstances of the day. Management assessment, in the process, became a mere instrument for collecting data to support the government’s claim of new public management reforms (Cho Seonghan, 2000: 9). As a matter of fact, governmental ministries and departments actively interfered with the assessment process, demanding revisions and so on (Kim Gwanung, The Chosun Ilbo, March 24, 1999).


Source: Korea Institute of Public Administration. 2008. Korean Public Administration, 1948-2008, Edited by Korea Institute of Public Administration. Pajubookcity: Bobmunsa.