Trim the fat in administrative costs

Columns

Trim the fat in administrative costs

Published: 05 Sep. 2024, 20:01

Yeom Jae-ho
The author, a former president of Korea University, is the president of Taejae University.

U.S. Vice President Kamala Harris strongly criticized Republican candidate Donald Trump in her acceptance speech as the presidential candidate at the Democratic National Convention. She called Trump an “unserious man” and warned that the consequences of putting Donald Trump back in the White House will be extremely serious.

While Harris is doing well in the post-DNC polls, the outcome of the election is hard to say for sure, as former President Trump still maintains over 40 percent rating, close to Harris’s. How does Trump — a candidate who is reckless, improvised and still on trial, just as Harris fiercely criticizes — still get support from so many Americans? Why do Trump supporters rave over the political outsider who ignores conventional political grammars when running state affairs?

On June 7, 1986, the New York Times published an article about the repair of the Central Park ice rink. New York City spent $13 million to repair the rink for six years, but it was still not completed. A real estate developer proposed to Mayor Ed Koch that he would finish the project for $3 million within six months and promised to cover extra costs if the construction wasn’t completed by that time. The mayor accepted the offer, and the project was finished within five months, saving $750,000. The young real estate developer was Trump.

At that time, Trump had only one condition. He demanded the city not enforce any laws or regulations — and he would use all possible means to make the ice rink operate normally. Although it was a government project, he didn’t hold a bidding round and instead used his own construction company. The environmental impact evaluation that always accompanied government projects was skipped, and all administrative rules on the energy rating of ice-making facilities were ignored. New Yorkers cheered as they were able to skate at Central Park again after six years.

This story is well explained in James Wilson’s “Bureaucracy,” a classic textbook in public administration. The book also discusses how the government had to buy a construction hammer for $435 and a coffee kettle for $3,000 as fairness, stability, transparency and accountability are emphasized in government administration. Trump’s popularity is largely attributed to slimming down national administration.

Administration pursues both democracy and efficiency at the same time. Both are important values, just as a bird flies with two wings. Democracy has also been greatly emphasized in Korea since democratization. To become a developed country, many laws have been enacted to highlight safety and improve workers’ rights. It is a very desirable development as we must go beyond the industrialization that only emphasized efficiency.

However, the social costs of administrative regulations accumulated after emphasizing democracy. Now, it is time for our society to ask whether all Koreans really have “the willingness to pay” in economics. You may think it’s natural to emphasize democracy because you don’t pay for it yourself. But all government policies demand costs we should pay indirectly, whether it’s tax, time or national competitiveness.

Seoul Mayor Oh Se-hoon recently insisted on introducing a differential pay system for foreigners after some complained that Philippine housekeepers’ wages were too high compared to Hong Kong and Singapore. Over the drastic minimum wage increase by the previous administration, small and mid-sized companies in the industrial complex complained that their workplaces were full of foreign workers, and that the policy only increases their wages. This is the point where a democracy that prohibits discrimination conflicts with the efficiency of social costs.

When a policy is unilaterally applied to everyone, the social cost of the country as a whole surges. After the Pohang earthquake, it became mandatory to conduct ground inspections on all construction sites nationwide. In addition to the inspection costs, all construction projects were delayed for at least six months because there were only two inspection agencies. As the president of Korea University at the time, I asked, “Do our school construction projects need inspection when they are located on safe rock terrain?” I was told it was still required.

Regulations that have accumulated one after another since democratization come at a social cost. In the five years of the Moon Jae-in administration, the number of civil servants increased by more than 130,000, making 2.3 percent of the entire population work in public service. Still, Korean civil servants approach issues from the perspective of regulation to monitor people rather than providing services to help people. As the number of public servants increases, regulations increase and we must pay more social costs. I am afraid of the possibility of the emergence of extreme populists as a reaction to excessive democracy and regulation. Both democracy and the efficiency of administration must be respected.

Translation by the Korea JoongAng Daily staff.