During the Korean presidential election of 2007, one critical issue was Lee Myung-bak's government-reform pledge -- his promise to make a "small government" so as to realize the vision of making Korea an advanced country. Over the past 10 years, Korea has maintained a big government, although the two previous administrations declared their commitment to small government before they were inaugurated. There had been no critical diagnosis of and reflection on efficient government organization, and this has resulted in a huge central government, an excessive number of civil servants, and swollen public finance, without much productive performance for the public.

The Lee Myung-bak administration was launched during the promulgation of the first year of national advancement. The emphasis of government reform for this national advancement is to design a small, efficient government. This has been stressed as a prerequisite for boosting the national economy. For the last two months, much has been done to downsize the central government organization, but much work remains. The initial downsizing plan was to reduce the number of ministries from 18 to 13, which was proposed on the basis of striving for larger departments and a rearrangement of functions. Only three ministries have been done away with. In the parliamentary negotiations process, opposition party and related interest groups were against the initial streamlining package.

 

Government or administrative reform is not easy, in any sense. As seen in the Lee Myung-bak administration's initial administrative reform efforts, it rarely succeeds as planned. The fixing of big-government problems takes so long. Moving toward a smaller government is a gradual process. Unfinished government-reform business in the early stage of the Lee administration needs to be unswervingly attended to, given the fact that President Lee promised to reduce the number of ministries to the level of OECD countries, and cut 10 percent of the government budget. According to Professor Gerald Caiden, however, government reform is like a revolution, but is not a revolution. "It is not expected to sweep away everything that exists and replace it with something entirely new. To a greater or lesser extent, what exists will continue, but be altered in some important respects."

 

The Lee administration is pursuing a small, efficient government which serves, not reigns over, people. However, there are drawbacks to this small-government ideology. Opposition parties and related pressure groups argue that a small government, achieved by abolishing and merging existing ministries, cannot fulfill the growing demand for essential public services.

 

This argument is very narrow and weak. Such opposition to small government is largely a political tactic, not a serious policy position for the public. Under a small, efficient government, the increasing public service needs are being met. The core of public service functions depends not on the government's size, but on its competency. The assessment of "small government" should focus on whether the government has the ability to deliver better service to the public. The issue is not simply the number of bureaus or ministries or public employees. "Small but competent and capable government" has to be pursued with the aim of harmonizing components such as the size of ministries and the number of public employees, the size of the budget for public services, and the capacity of the government.

 

Consider the Japanese government, which has 12 ministries -- ten fewer than in 2001. This is a good model for the Lee administration, which will have to continuously pursue government reform during its five-year term. The Japanese government reform program has four characteristics: a) establishing a system with more effective political leadership to strengthen the administrative leadership of the Cabinet and Prime Minister, b) downsizing the central government organizations, c) fostering more transparent administration based on performance, d) drastically streamlining the central government. Of these, downsizing and drastic streamlining have been a tremendous success. One office and 22 ministries were reorganized into one Cabinet office and 12 ministries by realigning the functions of government. In particular, the number of national civil servants will be reduced by 25% this decade. Also, the size of the bureaus will be reduced from 128 to 96 (25%) and that of the divisions from about 1200 to 1000 (20%).

The principle of small government derives, in part, from Schmacher's classic book, "Small Is Beautiful" (1973), which advocated "smallness within bigness." As the author put it, "In other words, a specific form of decentralization: for a large organization to work, it must behave like a related group of small organizations." Small government functions can operate well within a small number of large ministries which are merged into big departments.

 

To successfully follow through on unfinished government reform measures, the following five principles should be the basic philosophy and direction of small, competent government:

* Strengthening strategy-driven national governance

* Privatizing what can be done by the private sector

* Decentralizing and devolving to the local government what can be done by it

* Enhancing openness, autonomy and competition, and transparency and accountability in all sectors

* Fostering community solidarity and trust

First of all, the new government should enhance strategy-driven national governance. The four strategies of this nation and the world should include globalization, liberalization, community, and leadership, which will be the cornerstones of national advancement. It is crucial to privatize what the private sector can provide more efficiently to the public. Privatization and the merger of public enterprises should be continuously pushed forward on the basis of profit, priority, speed, and scope, along with the safeguard of competition. Major targeted public enterprises are KORAIL, the Korea Electric Power Corporation (KEPCO), the Korea Gas Corporation (KOGAS), the Korea Land Corporation (KLC), and the Korea National Housing Corporation (KNHC).

Along with central government reform, it is vital to decentralize all the public functions which local governments can take care of. Also, it's important to devolve authority, the budget, and laws to local administrations so as to guarantee autonomous governance. Without decentralization and a devolution from the central government, programmatic government reform will not take place. In the process of implementing central and local government policies, openness, transparency, autonomy, and accountability should be institutionalized. Finally, these principles should spread into communities, based on the solidarity and trust of citizens.

 

The new Lee Myung-bak administration eliminated only three ministries, in spite of making an effort to realign overlapping functions. However, to achieve the national vision of Korean advancement, the central government should be continuously reorganized so that five types of functions become the focus of what is known as "big departmentalism:" a) the integration function of national strategy planning and economic policy adjustment, b) the integration function of human resources, c) the integration function of science and technology and industry policy, d) the integration function of health, wealth, and family, e) the integration of resources, environment, and national land. Based on these functions, the Lee administration needs to cut three to five more ministries, from current 15, within two years by reviewing the small- government draft of one board, 10 ministries, and two offices from the previous 18 ministries and four offices, as the Hansun Foundation suggested. Major possible alternatives can be considered as follows:

First, at the national strategic level, the National Strategy and Planning Board as a vice prime ministerial-level position should be created to implement economic policy adjustments and budget functions and to coordinate the policy functions among the ministries. This new government for national advancement should focus on strategic planning. NSPB is similar to the OMB's (Office of Management and Budget's) function of the American federal government. The Lee administration intends to conduct these functions in the new Ministry of Planning and Finance and the Office of the President. However, in the process of continuous government reform, the NSPB needs to be established if the current Ministry does not work well.

 

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Secondly, the Ministry of Future Human Resources needs to integrate the human resources of previous government ministries such as the Ministry of Education and Human Resources, the Ministry of Science and Technology, the Ministry of Labor, and the Ministry of Culture and Tourism. The MOFHR collectively conducts the functions of planning of the MOEHR, the R&D human resources of the MOST, the employment functions of Labor, as well as the cultural properties, academic, arts, and religious affairs of the MOCT.

 

In contrast to this recommendation, the Lee administration established the Ministry of Education and Science & Technology by merging the MOEHR and MOST. The MOL is the same as the previous organization, and the MOCT has been renamed the Ministry of Culture, Sports, and Tourism, having added the functions of the abolished Government Information Agency. However, the functions of human resources are common to the aforementioned previous four ministries. Of those four, future-oriented human resources and industry-specialization functions should be separated and moved to related ministries such as the MOFHR and the newly recommended Ministry of Science and Industry. Also, sports functions should be carried out by the private sector, not by the MOCST. In this context, the Lee administration has to continuously review human resource functions, and redesign related ministries for the public. For example, the Ministry of Labor can be abolished by readjusting its current functions.

 

Thirdly, a Ministry of Science and Industry is needed by integrating the functions of science and technology of the previous MOST and the industry policy functions of the previous Ministry of Industry and Resources, the MOST, the Ministry of Information and Communication, and the MOCT(the new MCST). In a similar context, the Lee administration established the Ministry of Knowledge and Economy and Ministry of Education, Science, and Technology. However, to cope with real economy and knowledge informatization, the MOKE should be linked to science and technology. In particular, the cultural tourism industry functions should be included in the industry policy-related ministry (MOSI). This rationale leads to the recommendation to create a new MOSI, rather than separating the current MOKE and MOEST.

 

Fourthly, the new Ministry of Equal Gender should be merged into the new Ministry of Health, Wealth, and Family. The functions of the MOEG are being overlapped with the functions of new MOEST and MOUWF. Women's policy should be implemented based on common concerns regarding this aging society, welfare, and equal gender.

Fifthly, the current Ministry of Unification should be scaled down into the Office of South-North Exchange and Cooperation under the Prime Minster. Under the Lee administration, the public budget should be efficiently executed based on the actual and pragmatic South-North relations, rather than symbolic unification. Also, some policy- making functions of the MOU should be transferred into the current the Ministry of Foreign Affairs and Trade. Another alternative is to merge the MOU with the MOFAT. Finally, the Board of Audit and Inspection needs to be transferred into the National Assembly for its autonomy and efficiency.

Reduction of the number of national civil servants

Over the last five years, the number of central government civil servants has increased by about 66,000. The total number of civil servants grew from 885,000 in 2003 to 951,000 in 2007. There has been no single ministry with an exceptional increase in the number of public employees. This has resulted in an excessive public budget and finance, minus the efficient performance which people had expected.

 

Several negative characteristics could be seen in this trend during the Roh Moo-hyun administration. It has been an inertial increase due to political tactics, not because of growing public demand. Too many civil servants do not make for better government performance. The Roh administration's call for a "big but efficient government" was realized only in the bigness aspect. The public perception and trust of the Roh administration's policy performance was very low. Furthermore, the increasing number of civil servants led to a rise in the number of regulations and regulatory costs, which negatively affects the GNP. One recent survey presented at a regulatory-reform seminar showed that the regulatory costs arising from the impact of general economic regulation on the GNP amounts to 48.6 trillion won. This is 5.7 % of the GDP and 35.1% of the total national tax (2006 base).

 

As remedies for these problems, first of all, the Lee administration should temporarily introduce a National Civil Servants Cutback Management System which reduces the number of national civil servants annually by 5 percent, and 25 percent during its five-year term. Japan has been pursuing a 25 percent reduction in the number of its national civil servants over a 10-year period beginning in 2001. Russia has reduced by 30% the size of its civil service since 2004, and cut the number of ministries from 30 to 17.

Secondly, it is necessary to newly design the supply-and-demand manpower planning for civil servants to fit the ideology and functions of the newly reorganized central government by introducing the Total National Civil Servants Number Limit (Full Quota) System.

 

Finally, this institutionalization should be accompanied by a reform of consciousness which can help the government overcome the increasing inertia of public servants.

Drastic change of high-level (grade 5) civil servants recruiting exam: Introduction of the national policy graduate school system

The civil service system of advanced countries has been operated based on professionalism and competitive culture. Surely, the Korean high level (Grade 5) civil servant exam for administration and foreign affairs has played a tremendous role in the recruitment and appointment of civil servants. This rote knowledge-oriented state exam, however, is not in tune with the era of informatization and digitalization. Very recently, Japan also proposed abolishing the fast-track career system for national public servants who pass the highest-grade (Category 1) employment examination, and introducing a new system based on exams for three job categories.

 

In this context, the current Korean Grade 5 civil servant exam system should be replaced by a new recruiting system such as the National Policy Graduate School System. The French National School of Administration system (Ecole Nationale d'Administration) can be thoroughly reviewed as a benchmark institution for the high executive level. The school's main objective is to recruit and train the people who will make public service a living institution and enable it to adapt to ever-changing times. Also, the school has to pass on the ethics of government service to its graduates, based on the values of responsibility, political neutrality, and prudent service. The ENA is a government administrative agency under the Prime Minister and a professional school for public service. Each year, the ENA takes in about 120 new students for its initial 27-month-long curriculum for future high-level civil servants.

 

Along with the ENA and the new Japanese proposal, the civil servant recruiting systems of the United States and the United Kingdom should be considered. An optimal model suitable to Korean administrative culture should be created by evaluating thoroughly the strengths and weaknesses of other models.

For policy consumers, national policy formulation and implementation should be enhanced. Collaboration on policy between the public and private sectors should be emphasized. Policy failures are due to the lack of pre-adjusting of inconsistent policies among related ministries and interest groups insufficient understanding of the specific content of policy phenomena; and the absence of reasonable and transparent rewards and accountability according to the success and failure of policies.

 

To effectively manage policy crises, the real-name system must be institutionalized. Along with the real names of major policy formulators, implementers, and evaluators, all records of policy processes should be kept and delivered to the responsible policy staff of the next government or next generation, with a guarantee of systematic and field-oriented policy know-how.

Reorganization of a state-supported research institutes

The state-supported research institutes under the prime minister need to be wholly reviewed and categorized into two types: national strategy research institutes and ministry in-house research institutes. Also, the modern history research institute run by the pure private sector should be established from a future-oriented perspective. Its functions will be to link past, present, and future history, and recommend pragmatic policies based on the fair identification of historical facts.

 

There are many reasons why the opposition party and related interest groups are hesitant about creating a much leaner government. To launch a government-reform initiative is a risky task. It requires believing in the public, the market, and national advancement. And it is likely to spark bitter opposition from all those who feel threatened by reform. Therefore, such reform is required to persuade opposition party and pressure groups whose interests are threatened by the proposed reforms. The Lee administration should help them understand and share this vision of government reform so that we can achieve national advancement and provide first-class public service. Furthermore, the president and the ruling party have to make genuine efforts to foster an amicable negotiating partnership with the opposition party and related interest groups.

In addition to these suggestions for upgrading the effectiveness of the government, regulatory reform should be pursued so as to reduce by 50% the number of federal regulations.

 

To substantially reform the government, the Lee administration would do best to take heed of Gerald Caiden's warning: "There were endemic diseases that persisted in large-scale organizations, particularly in public organizations, attributable variously to excessive bureaucratization, bureau-pathologic behavior, and bureaucracy itself. If left untreated, these diseases will eventually handicap the performance of, and finally cripple the administration altogether." Therefore, the Korean government's efforts to reform itself must be continuous, ongoing -- not merely a periodic or episodic phenomenon, if we are to truly advance as a nation.

 

 

2008.03.20