The social solidarity economy is emerging as a new issue in regional politics ahead of the June 3 local elections. With the Framework Act on the Social Solidarity Economy, which has been stalled for more than 12 years, approaching a vote on the National Assembly floor, the likelihood has grown that dedicated organizations and funds will be newly established in each local government. On the ground, expectations that it could serve as a supplementary mechanism to the market economy are coupled with concerns over the expansion of local authority and finances.
According to local governments on Thursday, 14 of the country's local governments (6.2%) currently operate social solidarity economy funds aimed at addressing issues such as polarization, care gaps, and regional extinction. Six metropolitan governments, including Seoul, Gyeonggi, South Chungcheong, Busan, North Jeolla, and South Gyeongsang, along with eight basic-level governments including Seongnam, Hwaseong, Seongbuk, Eunpyeong, Seongdong, Gangdong, Jeonju, and Wanju, are operating a combined 190 billion won ($140 million). The Framework Act on the Social Solidarity Economy was proposed on the view that structural problems such as low birth rates, aging, care gaps, and regional extinction are difficult to solve through the market and government budgets alone. Interior Minister Yoon Ho-jung said, "Since problems such as low birth rates, energy transition, and regional extinction cannot all be addressed through government budgets alone, the intent is to solve them through the social solidarity economy."
If the law passes, the number of local governments operating social solidarity economy funds is expected to expand to all 17 metropolitan and 226 basic-level governments. Dedicated departments at the director level, social solidarity economy committees, development funds, intermediary support organizations, and social solidarity finance intermediaries will also be newly established. Accordingly, local government heads' discretion will inevitably grow in areas such as fund creation, committee member appointments, and entrustment of intermediary support organizations. The government plans to jointly address regional job, care, and energy issues through the social solidarity economy and to create a permanent support system combining the private and public sectors.
The Korea Social Solidarity Economy, a coalition of organizations involved in the social solidarity economy, has finalized and proposed 44 common pledges across nine areas targeting the June 3 local elections. In the energy sector, it proposed creating 2,500 "Sunlight Pension" village power plants over five years, in which residents invest and share profits, and training 5,000 "solar doctors" to manage solar facilities. In the care sector, the key items are establishing "Living Care Stations" at the eup, myeon, and dong levels and introducing a "regional primary care physician system" linking medical services and welfare. Pledges closely tied to daily life, including mobile food markets, demand-responsive transit (DRT) village buses, and public platform cooperatives, were also included.
However, concerns over fund operation are being raised on the ground. With 65% of current funds held in bank deposits or fund deposits, there are calls for a mixed-finance model that moves beyond a focus on small-scale low-interest loans. The number of cooperatives also grew to 26,539 as of 2025, but the operating rate stood at only 53.8%, and average net profit was in the red. There are also voices saying that even if organizations increase, the system will be difficult to operate without the private-sector networks and execution capabilities needed to actually run the projects.
Yang Hong-rin, head of the Incheon Social Economy Center, said, "The enactment of the Framework Act on the Social Solidarity Economy is significant in that it binds fund operations into national-level infrastructure, but the ecosystem does not function through the establishment of organizations alone." He added, "There is a need to move away from a subsidy-centered structure and jointly create an investment structure in which local capital circulates."
