Korea Needs Consistent Reform to Turn Top-Ranked Regulatory System Into Results

"OECD 1st place (2024) vs OECD 20th place (2023)"

Both rankings reflect Korea's position among the 38 OECD member countries regarding regulations. The first place refers to the Indicators of Regulatory Policy and Governance (iREG), which evaluates the level of regulatory management systems. The 20th place refers to the Product Market Regulation (PMR) index, which measures the actual regulatory burden on businesses. The meaning is clear: Korea's regulatory management policies are world-class, yet the regulatory burden felt by businesses remains substantial. This is not limited to international assessments. The Regulatory Burden Index published by the Korea Chamber of Commerce and Industry is also on the rise.

For over 20 years, every administration has emphasized regulatory reform, but new regulations continued to emerge while existing ones rarely changed. Grand principles and slogans were abundant, but specific measures and results were minimal. That is why people call for drastic action. However, if conflict resolution culture, prudent legislation, and bureaucratic attitudes cannot change in the short term, dramatic transformation is equally difficult to expect. If so, the strategy must change. Rather than calling for drastic measures, we should consistently pursue achievable regulatory improvements.

The hint lies in the OECD rankings. We already possess world-class regulatory management systems, including the Regulatory Rationalization Committee, Regulatory Impact Analysis, the Regulatory Information Portal, Active Administration Immunity, Regulatory Sunset provisions, the Regulatory Cost Management System, Regulatory Sandboxes, Special Regulatory Zones, and the Small and Medium Enterprise Ombudsman. The problem is not the absence of systems but their insufficient operation. What if we made them function properly and consistently for more than a decade? The magic of compound interest does not apply only to investments. Regulatory reform also produces cumulative effects. If we operate our world-leading systems substantively, Korea's OECD regulatory index ranking, announced every five years, could reach 15th in 2028, 10th in 2033, and 1st in 2038.

However, operating systems properly is not easy. If it were, today's problems would not exist. What must differ from previous administrations is active demand and participation from the private sector. If systems are left solely to the government, it becomes easy to focus on "small and easy reforms" while postponing "important and difficult reforms."

Article 17 of the Framework Act on Administrative Regulations stipulates that anyone can request improvements or abolition of existing regulations through the right to claim regulatory improvement. Businesses and citizens must exercise this right actively. Let us not forget that good regulations are closer to spoils of war than gifts.

The realistic tactic is an approach of rationalizing one regulation at a time. Karl Popper emphasized that governments should eliminate the misfortunes and evils before our eyes now, rather than pursuing lofty ideals of a distant future. This approach is precisely what is needed to reform regulations that create specific inconveniences and restrictions. In this regard, the government's working methods raise expectations.

As witnessed in various live-broadcast meetings recently, the president and public officials are actively bringing specific issues to the discussion table for review and decision. Additionally, the Regulatory Reform Committee was recently reorganized into the Regulatory Rationalization Committee with expanded private sector membership, and the president has decided to serve as the sole chairman. What matters now is what actually changes. We need to watch whether improvements in the direction and speed of decision-making lead to continuous regulatory reform.

Business leaders competing globally and creating jobs have the right to better regulations than competitor nations. Businesses must make demands confidently, and the people's sovereignty government must support them. We must also protect and encourage public officials who rationalize regulations. So what should be demanded and how? I intend to continue presenting results from collaborative discussions with regulatory experts, business leaders, and students to build broader consensus.