Comparative Studies of Social-economic Models

Korean society has achieved rapid economic growth over the past 40 years. In addition to joining the OECD in 2009, per capita income surpassed $ 20,000. By joining the OECD DAC(Development Assistance Committee), the status of South Korea in the international community has transitioned from a recipient to a grantor of monetary support. However, societal problems such as social conflicts, income inequality, and social risks remain unresolved.

In its search of the solutions to overcome this myriad of social conflicts and inequalities, Institute for Social Development and Policy Research has paid particular attention to the concept named social-economic model. "Social-economic model" refers to the capabilities of the members of society to comprehend economic and social issues and to solve the problems by social cooperation. The social-economic model may take a form as a value network among the citizens or as a type of publicness. The social-economic model explains why the countries facing similar social problems demonstrate different aspects in overcoming them. The Eurozone crisis well represents the validity of the social-economic model. During the incidence, some countries mitigated social conflicts and recovered to previous state in short period while others did not. By comparing the social-economic models of several countries, IDSPR has strived to define which form of the social-economic model is most suitable for resolving certain social crises. More importantly, the institute has sought for an optimal social-economic model that the Korean society must pursue in the future.

The Institute for Social Development and Policy Research has studied the social-economic model under various topics over the past three years. In 2012 and 2013, in order to find 'good development,’ which is the social-economic model that is capable of fostering both growth and welfare simultaneously, the institute conducted a comparative study across countries under two themes, “Social Quality (SQ)” and “governance.” In 2014, to assess the social-economic model that can effectively respond to disasters, ISDPR conducted comparative studies with a focus on “types of publicness.”

Main results of the studies are as follows. First, publicness can be divided into four sub-categories: 'public good,' 'fairness,' 'civic attitudes,' and ‘openness.' In a broad spectrum, publicness is a social-economic model that generates differences in ways of coping with disasters. "Public good" refers to the allocation of the resources for public benefit. "Citizenship" is defined as the degree of citizen participation in social issues related to common interest. "Fairness" refers to the impartial distribution of resources. Lastly, "openness" is the transparency in the decision-making process. These four components of publicness become critical factors in determining how society responds to such societal disasters like the sinking of "Sewol" ferry.

Countries that are exhibiting excellence in all four categories, for instance, the Netherlands and Germany, have demonstrated efficient and apposite responses to national disasters. High public interest enabled German society to forecast the potential risks of nuclear power generators in advance and to enforce de-nuclearization policies. Netherlands was able to configure proficient disaster response system in response to the great flood in 1953. In the United States, on the other hand, public good and fairness are low, while civic attitudes and openness are relatively high. As a result, the country failed to consider the vulnerable social groups such as the poor and racial minorities in its response to Hurricane Katrina. Consequently, the damages from the natural disaster were concentrated on the socially disadvantaged groups. During the disaster response, United States might have been able to facilitate civic participation due to its high openness and strong civic attitudes. During the resource mobilization process, however, it was not able to overcome the limitation in reaching out to citizens of various socioeconomic statuses.

In contrast to Western countries, South Korea and Japan are poor in all four categories. Therefore, these countries could neither promote civic participation nor establish policies accounting for publicness. As a result, South Korea and Japan respectively experienced terrible disasters as the Sewol ferry disaster and the Fukushima nuclear accident. These countries have also struggled from taking systematic measures against the incidents. In general, the institute’s comparative studies indicate that Social Quality and type of governance are crucial factors in achieving growth and welfare.

By simply increasing the welfare expenditure, countries cannot achieve the two objectives of growth and welfare. Only when high quality of society—namely, a high degree of trust and low level of corruption—is preconditioned, welfare expansion will not hinder economic growth. Southern European countries such as Greece and Italy exemplify the notion that expansion of social spending without entailing enhancement of social quality will cause severe harm at the occurrence of the economic crisis. In order for Korea to cope with crises in the future wisely and to achieve its aspirations for growth and welfare, it must implement policies to improve social quality. Furthermore, the country will need to establish a structure of consensual decision making in which a variety of social subjects can participate to determine and enforce policies. In a state where the social safety net is incomplete, major subjects of social conversations—especially workers—cannot take part properly in the communications and agreements. Lack of transparency and democracy in the decision-making process will also obstruct the fulfillment of agreements made. The process of social reconstruction to secure high level of social quality and consensual governance is indispensable to ‘good growth.' Institute for Social Development and Policy Research has empirically found that social-economic model affects society’s efficacy in managing disasters and realizing social growth accompanied by welfare. Going forward, IDSPR will continue to explore the ways in which Korean society can progress by further investigating the social-economic model.