This document summarizes a presentation given by Dr. Jin Park of the KDI School of Public Policy and Management on government reform in South Korea. The presentation covered four key topics: 1) the role of government in South Korea's early economic development, 2) government reform efforts after the 1997 Asian financial crisis, 3) how to reform the government, and 4) lessons learned from South Korea's experience with government reform.

1. Government Reform: Lesson’s from Korean Experience Public Officials Capacity Building Training Program for Government Innovation Seoul , December 7, 2007 Jin PARK, Ph.D. KDI School of Public Policy and Management

2. KDI School of Public Policy and Management Seoul, December 7, 2007 D adang Solihin Delegation Head Public Officials Capacity Building Training Program for Government Innovation

4. PARK, Jin 1991 : Ph.D. in economics, Univ. of Pennsylvania 1992~1998 : Research fellow, KDI 1998~2001 : Director, Administrative Reform Team, Ministry of Planning and Budget 2001~2004 : Associate Professor, Director for Knowledge Cooperation, KDI School Currently Professor, KDI School Presenter

6. Four success factors behind Korea’s Economic Development ‘ I can do (or my kids can do) sprit’ : education, hardworking … Competition and incentive : export, Saemaul Movement … The role of the government Abundant labor with (potentially) good skill

14. Korean Government’s Transition 1960s 1980s Since 1997 Rapid Economic Growth through Government Intervention Frequent Intervention and Over-regulation of the Private Sector Open Economic System Government as a Fair Coordinator

16. Growth Decomposition of S. Korea Real growth rate Irregular factors Pot. growth rate(A+B ) Factor inputs(A) Labor Capital TF Productivity(B) Economies of Scale Resource allocation Technological prog. 1971~1980 1981~1990 1991~ 2000 7.4 -1.0 8.4 5.6 3.2 2.4 2.8 1.4 0.8 0.6 (%) 6.1 -0.7 6.8 3.4 1.5 1.9 3.4 1.5 0.7 1.2 8.6 1.0 7.6 4.6 2.5 2.1 3.0 1.4 0.7 0.9 Is Government intervention effective for tech. progress?

21. Efforts for Government Reform after the Crisis Efforts of previous Administrations Efforts after the crisis Past attempts were partial in nature, whether they focused on government reorganization, privatization, or deregulation. The reform drive was almost unprecedented in its comprehensiveness, proceeding simultaneously on all fronts, Including both central and local governments, public enterprises, and quasi-government organizations. The only exceptions were the political and judiciary divisions.

24. What is Public Sector? Central Administration + Branch agencies Local Administration Government Affiliated Org. Local GAO State owned-enterprises State Invested Enterprise Government funded org. Government-commissioned org. Government-subsidized org. Education Agency National University What is the most progressed and the most retarded sector in terms of the public reform in your country?

25. Two types of reform Which is more appropriate in your country? Passive Reform Spontaneous Reform Strength Overcome of internal resistance Outsider participation Broader scope Radical Reform Top leader ’ s reform agenda High feasibility Utilize insider knowledge Broad participation Persistence Weak -ness Low feasibility Knowledge of external force Subject to political change Intra-institutional problem Hard to overcome inertia Possibility of manipulation

27. Evaluation Recognition Implement The four steps of reform Plan Achievement Index Institutionalization Goals Constraints Strategy Adaptive implement Overcome of resistance Objective of evaluation Feed back of evaluation Which step is least effective in your country?

39. “ The innovator makes enemies of all those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new.” --- Machiavelli Thank you