Public institution relocation needs clear rules and exceptions

Kim Hou-gyun

The author is a professor of Public Administration at Chonnam National University and the head of the Government Innovation Division of Reset Korea.

The principles for the second relocation of public institutions are straightforward: Minimize the number remaining in Seoul, concentrate institutions rather than distribute them piecemeal and, barring special exceptions, move them to "innovation cities." Land Minister Kim Yoon-duk recently outlined this approach at a press conference. The direction is sound. The key question, however, is not the principles but the exceptions.

With the government reviewing some 350 public institutions and affiliated agencies in the capital region for relocation, it must decide which functions of which institutions should go to which innovation cities and what qualifies as a “special exception.”

Unless the criteria for exceptions are disclosed, relocation decisions and destinations could be swayed by pressure from institutions and local governments. Despite the stated goal of clustering, the outcome could become another exercise in dividing institutions among regions. The government must first explain who will judge exceptions and by what standards.

Nor should “zero institutions remaining in Seoul” become an end in itself. In the first relocation, 153 institutions and about 52,000 employees moved outside the capital region by 2019. Yet the combined relocation rate for employees moving with families or as single-person households stood at 71 percent last December, below the government’s 75 percent target. The rates were just 50.5 percent in North Chungcheong and 51.3 percent in North Gyeongsang. Since those figures combine family and single-person moves, the actual rate of family settlement is lower.

Although 81.8 percent of planned industry-academia-research cluster land has been sold, only 56.6 percent of the sold area is occupied. Of 104 institutions that submitted data, 60 operated shuttle buses to the capital region between 2010 and 2025, spending a cumulative 198.9 billion won ($144 million). Their headquarters moved, but their people and core functions did not fully follow.

To relocate functions in substance rather than merely buildings, the government should assign operations according to the nature of their work instead of moving every institution wholesale. When Japan transferred the main organizations of its Agency for Cultural Affairs to Kyoto, it retained in Tokyo some units needed for parliamentary affairs and coordination with other ministries. That was functional allocation, not retreat. Britain’s Darlington Economic Campus similarly recruits locally for relocated ministries, allowing regional talent to participate in central government policymaking.

What matters is not whether anything remains in the capital but whether the rules for doing so are set in advance. Functions that unavoidably require capital-region links should remain only within clearly specified limits on scope and staffing. Everything else should move without exception. Otherwise, core functions may quietly remain in Seoul, as they did during the first relocation.

The government should also publish the order of priority for relocation criteria. First should be compatibility between an institution’s core functions and an innovation city’s key industries. Energy institutions work best where an energy industry base exists, and maritime institutions where maritime industries are established. Second is the presence of universities, research institutes and skilled workers. Third is the potential contribution to national strategic industries such as AI, semiconductors and aerospace. Fourth is whether there is a concrete plan to spread the benefits to neighboring cities and related industries. Fifth is the quality of education, medical care, transportation and other living conditions. The government must also say which factor prevails when these criteria conflict.

Transparency depends on when information is disclosed, how independent the review is and whether appeals are possible. Evaluation categories and scores should be released before institutions are selected, while regional results and supporting reasons should be published immediately after decisions. This would prevent needless suspicions that conclusions were predetermined and rationales added afterward.

Committee members and meeting minutes should be disclosed, and a ceiling should be placed on qualitative assessments vulnerable to arbitrary judgment. Deadlines for appeals, the responsible authority and the effect of reconsideration should also be specified. Public hearings and consultations with labor unions remain ahead. Clear criteria will make persuasion possible; without them, the process will become a contest of political strength.

Success should be measured not by how many institutions move but by how regions change. Using conditions immediately before relocation as a baseline, the government should compare results after three and five years. Four indicators are enough: the share of married employees relocating with their families, the regional talent-hiring rate, private-sector research and development investment and new hiring by partner companies.

Statistics such as the 71 percent figure, which combines family settlement with employees moving alone, should be separated and disclosed. Targets and results for each institution should be published annually. If targets are missed, relocated functions and support measures should be adjusted.

Competition among regions to attract institutions was already intense before the relocation plan was announced. To minimize disputes, the government must first define its selection criteria and the scope of exceptions. The success of the second relocation will depend not on how few institutions remain in Seoul but on how firmly jobs, businesses and talent take root in the innovation cities.