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[Viewpoint] Quantity over quality

It looks more like a buffet table. The ruling and opposition parties are announcing various welfare policy promises day after day. Rather than fully enjoying a carefully prepared dish, you end up with the gratification of being full. They are more concerned with quantity than quality.

I do not mean to discount the welfare promises as imprudent pork barrel. It is not my intention to argue how to fund the welfare policies. In fact, Korea can afford to expand welfare spending. The proportion of the welfare spending of Korea’s gross domestic product is still half of the OECD average at 20 percent.

Increasing the portion wouldn’t bankrupt the country financially. Of course, some claim that sharing would inevitably lead to compromises in growth. However, if more people want to slow down on growth and share more, we have to follow them. That is the essence of democracy.

Depending on the design, welfare can turn into an industry. According to statistics by the World Bank, economy and welfare can be promoted together and are correlated. The social and economic indicators of seven countries, including the United States, Japan, Germany and Korea, from 1999 to 2007 show similar growth in welfare spending and economic growth. Robert Campbell, vice chairman of Deloitte, said during his visit to Korea that an increase in welfare spending in 2002 initiated market recovery in 2003 in developed countries.

It is hard to raise an objection to the quantitative expansion of welfare. The problem is efficiency and quality. We need to have results for the investment. However, politicians are so immersed in announcing more promises that they are not so concerned with the efficiency per cost. Tailor-made welfare by the ruling party clearly illustrates the problem. It sounds too good to be true.

The government will provide customized assistance for the situation of each person. But customization requires more labor and cost. Extensive human resources and administrative organization are necessary. Expanded bureaucracy adds to the cost of welfare. Ironically, the more customized the welfare system becomes, the poorer the efficiency of welfare spending becomes.

Politicians know this very well. A series of election campaigns have taught them how the political funds can be wasted. They consider it a success if half of the money spent is delivered where it is intended to go. In many cases, only 30 to 40 percent of the money actually reaches the destination, and the rest is diverted in the process.

Welfare is not so different. Unless the efficiency of the delivery system is improved, customized welfare is nothing but an idealistic slogan. The expression “customized” may have been bandied about by scholars who lack understanding of the real world. They should consult the veteran politicians who have experience in campaign financing.

What about the efficiency of the government? Expanded welfare means big government. It is inevitable whether intended or not. How can they guarantee efficiency in the public sector, reform the bureaucratic culture and enhance the strength of the private sector? There are many prerequisites to be addressed in advance, but solutions are nowhere to be found in the promises of the ruling and opposition parties.

From now on, the aging of the society will accelerate, and it is highly possible for the economy to fall into the trap of chronic shortage of demand. As the welfare budget increases, public projects cannot be pursued as aggressively.

In the end, lifting regulations and promoting a market opening to facilitate market innovation will be the way. But a big, inefficient government may not be up to the task.

The distant future is not easy to predict. In 10 or 20 years, which country would Korea be most comparable to among the developed countries? What kind of life will we be able to hand over to the next generation after three decades?

The buffet table of welfare promises that focus more on quantity than quality is not what voters need.

*The author is the political news editor of the JoongAng Ilbo.

by Nam Yoon-ho