Korea’s Welfare Expansion Policy as Political Failure: Current Policy Issues and Discussion

다국어 초록 (Multilingual Abstract)

Much has been discussed that the current welfare system was not well-designed, due to many blind spots and expected financial deficit in future as it is the system of ‘low contribution and high benefit’. However, politicians do not talk about the necessity of reform in current welfare system. Our review shows that even current welfare system is not sustainable, as it reaches around 130% of national debt in 2050 from 33% in 2010. We judge that our current level of national debt is already more than suggested level which coincides with potential economic capacity. If we do not want to give serious harm to economic growth due to ill-designed welfare system, we need to reform current welfare system, from ‘low contribution and high benefits’ to ‘low contribution and low benefits’, or ‘high contribution and high benefits’, which depends upon social consensus. Thus, the expansionary proposals of welfare spending from political groups should be restrained. However, it is so difficult, as expansionary welfare policy is one phenomenon of ‘political failure’, which political market is not working such that political private benefit is not equal to social benefit.

목차 (Table of Contents)

• Abstract
• Ⅰ. Introduction
• Ⅱ. Overview of welfare spending in Korea
• Ⅲ. Demographic characteristics
• Ⅳ. Welfare expansion as political failure
• Ⅴ. Policy Issues
• Ⅵ. Conclusions
• References