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Budget 4

Consolidating Performance-Orientation (1998 to 2007)

Budget overviews from 1998 to 2007 indicate that the main concerns of this period included seeking out and enhancing sources of future growth, improving quality of life, strengthening protection for the unemployed and the poor, ensuring balanced growth, and making sound investments.

The foreign exchange crisis that broke out in the late 1990s transformed the nature of industry policymaking from a centralized, top-down model to a more decentralized, bottom-up one. The economic stagnation attendant upon the crisis also prompted the government to search for and invest in new engines of future growth. In the meantime, the demand for improving quality of life continued to rise, in line with the increasing income level of Koreans, while the government also began to focus on achieving more balanced growth to tackle the side effects of the rapid, indiscriminate development pursued in the past.
 
<Table 3∙5> Central Objectives of Government Budgets (1998-2007)
 

1998 Running a contractionary fiscal policy for economic stability, providing support for financial restructuring, strengthening unemployment benefits, enhancing the competitiveness of SMBs, enhancing national competitiveness and growth potential, actively supporting improvements in quality of life, and enhancing the productivity of the public sector
1999 Maximizing support for economic recovery, strengthening benefits for the unemployed and the poor, improving the productivity and efficiency of budgets, setting examples for structural readjustment, enhancing the transparency and autonomy of budget preparations, and expanding deficit spending
2000 Preparing the basis for the information- and culture-driven society of the new millennium, expanding basis for industrial growth, supporting the middle class, backing local development, and recovering sound finance
2001 Accelerating the recovery of sound finance, expanding infrastructure to support the age of knowledge and information as well as economic growth, supporting social equity and fairness, enhancing the sustainability of industries, actively supporting cooperation between South and North Korea, reforming the public sector and its budgets, and enhancing the economy-controlling function of fiscal policy
2002 Supporting economic revitalization, increasing future-oriented investments, enhancing the sustainability of productive welfare, and enhancing the economy-controlling function of fiscal policy with early budget execution
2003 Achieving balanced finance three years ahead of schedule, using the success of the World Cup to improve the nation’s image, enhancing the sustainability of social welfare, increasing benefits for flood victims, and enhancing the productivity of future-oriented investments
2004 Minimizing increases in the annual budget, preparing and deciding budgets in light of the “Participatory Government” campaign, issuing deficit treasury bonds of up to KRW 1 trillion in value as a fiscal policy
2005 Enhancing growth potential, improving quality of life, achieving self defense/greater cooperation with North Korea/administrative reforms, enhancing the sustainability of investments, repaying public funds and other debts, organizing the Special Account for Balanced Regional Growth to review local and government subsidies
2006 Prioritizing the distribution of financial resources according to the national fiscal plan, seeking engines of future growth, mitigating polarization, and enhancing the sustainability of investments
2007 Prioritizing the distribution of financial resources according to the national fiscal plan, seeking engines of future growth, satisfying the basic needs of the people, reinforcing national security, and enhancing the sustainability of investments

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