This study reviews Korea’s policies seeking faster economic growth, improved income distribution and balanced national development, and suggests ways to make them more efficient and effective.
Balanced national (or regional) development, which helps local regions prosper on their own with less dependence on the central government while maintaining overall national competitiveness, is one of the most important goals of public policy-making. The Korean government has actively implemented a diverse range of policies aimed at balanced regional development since the late 1990s when it began to emerge as a pressing national task, although in effect they served as platforms for economic growth. Concentration of a country’s economic activities toward its central locations—for example, the country’s capital city and neighboring areas—is a natural phenomenon led by market forces. An international comparison shows that, despite Korea’s relatively high degree of central concentration in population and income, the country’s disparity among regions in standards of living is not excessively high. It must be noted that, in terms of public policy-making, balanced development tends to conflict with economic growth or national competitiveness. Korea’s future regional policies should shift their focus from government-driven reallocations of economic activities for regional balance to promotion of local areas’ independent capabilities to grow.
A variety of statistics show a pattern of growing disparity in regional productivity since the 1990s, which can be attributed to the industrial specialization strategies employed by regions and changes in Korea’s overall industrial structures accompanying the country’s economic growth. Korea’s capital regions, consisting of Seoul and neighboring cities, have comparative advantages in labor-intensive sectors, such as light industries and services, and non-capital areas have advantages in heavy-chemical industry. The capital regions’ strengths in service industries are being reinforced by the expanding transportation infrastructures. From the standpoint of new economic geography, Korea’s regional economic disparity is a natural outcome of regional industrial specialization, which does not necessarily require a political solution based on the logic of equity. The current pattern could be a source of Korea’s national competitiveness, rather than that of inefficiency.
지역개발정책의 방향과 전략(Regional development policy for the 21st century)
|Series Title; No||2008 국가예산과 정책목표; 연구보고서|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Territorial Development < National Land Development|
|Holding||KDI; KDI School|