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Time for an overhaul of Korea’s public institution oversight framework

Published: 17 Jul. 2025, 00:04

Choi Hyun-sun

The author is a professor at the School of Public Service, Myongji University

As the Lee Jae Myung administration settles in, the direction of Korea’s public institution governance is once again under scrutiny. Rather than simply inheriting existing frameworks, this is a critical moment to transition toward a more sustainable governance structure. Public institutions must be guided by transparent and accountable operations if they are to make a meaningful contribution to citizens’ daily lives amid rapidly changing administrative conditions.

The Ministry of Economy and Finance has long exerted overwhelming control of public institutions by leveraging its authority over budgets and organizational structures. This has led to recurring issues because major decisions with direct implications for the public were made internally with little public input. Voices from the field and feedback from the broader public were structurally sidelined, ultimately undermining public interest and eroding trust in government.

Minister of Trade, Industry and Energy Ahn Duk-geun attends a meeting of heads of public institutions at the Sejong government complex on Dec. 23, 2024. [NEWS1]

This is not merely a matter of administrative inefficiency. It reflects a deeper structural limitation within Korea’s governance framework. Public institutions are not just policy executors but public assets grounded in national finance that are meant to enhance quality of life. With a combined budget exceeding 900 trillion won ($6 billion) and assets topping 1,100 trillion won, the management of these institutions is not only an administrative concern, but also a fundamental national issue that affects people’s livelihoods and the country’s economic structure.

The new administration must take up the responsibility of reform for future generations. The first step should be repositioning the Public Institution Management Committee (PIMC), currently under ministry, instead under the Office of the President. This move does not simply aim to reduce the ministry’s power. Rather, it seeks to establish institutional balance by reinforcing public accountability, transparency and respect for the expertise of individual ministries.

A restructured PIMC should include co-chairs from the private sector, broader civilian participation and the creation of an independent compensation review board for public institutions. Such reforms would help ensure that the allocation of public resources is conducted more equitably and strategically, directly enhancing public services. If budgets are allocated based on citizens’ lived needs — such as jobs, housing, welfare and infrastructure — rather than bureaucratic convenience or political interests, public sector reform can yield visible benefits in daily life.

This approach also supports fiscal soundness and strengthens national competitiveness by eliminating redundant or inefficient programs. It would improve services — such as transportation and welfare — at a lower cost.

In tandem with these structural changes, a multilayered governance system, involving the National Assembly and civil society, must be introduced. Policy design and execution should no longer be the exclusive domain of a single ministry or bureaucratic group. Institutionalized checks and oversight from various sectors of society are essential.

The current public institution evaluation framework also requires urgent reform. Existing evaluation indicators and methods are based on outdated models introduced 40 years ago. Today’s rigid, numbers-based assessments risk stifling autonomy and innovation. The system must evolve to incorporate social value and public feedback.

The Lee Jae Myung administration’s emphasis on “people-centered governance” can only be realized through meaningful public sector reform. Public institutions represent the front line of policy implementation, and reform must prioritize sustainable change rather than short-term performance.

Governments across Korea are making significant efforts to attract public institutions to their regions. The photo shows the Bitgaram Observatory and the Gwangju-Jeonnam Innovation City in Naju, South Jeolla, home to several public institutions including the Korea Electric Power Corporation. [YONHAP]

Lessons should be drawn from the missteps of the Yoon Suk Yeol administration. Its one-sided push for efficiency damaged the credibility of public institutions. Despite a stated focus on financial discipline, public sector debt actually grew from 709 trillion won to 741 trillion won. These efforts failed to achieve results while undermining the institutions’ public mission. The previous administration also neglected Article 3 of the Act on the Management of Public Institutions, which guarantees autonomous operations. Bureaucrats failed to uphold institutional independence and ignored the voices of more than 430,000 employees across 331 public agencies.

Reforming public sector governance is not just about administrative control or budgetary efficiency. It is fundamentally about restoring public trust, reinforcing democracy and taking responsibility for designing institutions for future generations. The current administration must act decisively to reform the governance of public institutions — ensuring that both public value and national competitiveness can be strengthened through structural transformation.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.