[Insight & Opinion] Three Conditions for Successful Regulatory Reform

It is often said that "there is an answer to every problem." This means that if you clearly understand what problem needs to be solved, finding the answer can be surprisingly easy. The same likely applies to the challenges our society faces. Let’s take regulatory reform as an example. Almost every newly established government has consistently called for regulatory innovation, but the results have always fallen short of expectations. To avoid repeating the same mistakes, it is necessary to first examine the fundamental reasons why regulatory reform has not produced the expected outcomes. What are the essential causes behind the insufficient results of regulatory reform? I would like to highlight three main reasons.

First, stakeholders or vested interests who stand to lose relatively from regulatory innovation strongly resist it. This is easy to understand if you recall the conflicts and confrontations we experienced when trying to introduce telemedicine, mobility innovation, and future new industries.

Without the consent of vested interests and existing stakeholders, regulatory innovation is highly likely to hit a wall. Therefore, persistent social dialogue efforts to overcome conflicts and confrontations and to achieve agreement and compromise are urgently needed. Mutual empathy and consensus on the positive future that regulatory innovation will bring, as well as the establishment of compensation systems and consideration for potentially affected groups, must also be pursued simultaneously.

The second reason regulatory reform fails to meet expectations is that regulations often equate to the system and policy itself. In reality, regulations frequently mean the system, and since systems are official governance or policies that regulate and manage specific target areas based on legal foundations, regulatory reform becomes even more difficult.

The entities that oversee and operate systems and policies are government officials or public institutions. Therefore, it is structurally inevitable that there are limits when the government and officials, who essentially manage the system and policies closely tied to regulations, conduct regulatory reform. Although regulatory innovation is claimed, the reason why partial and ineffective regulatory reforms are repeatedly implemented instead of fundamental reforms is also due to this. If the Yoon Seok-yeol administration truly has the will for regulatory reform, it must seek ways to overcome this. For example, it could comprehensively review and innovate government operations from the perspective of boldly reducing or abolishing systems and policies with strong regulatory characteristics. Regulatory innovation should become government innovation.

The third reason regulatory reform is difficult lies in the National Assembly. Generally, regulatory systems are formalized through legislation. Therefore, the more legislation there is, the more regulations are likely to be produced proportionally. Currently, however, our National Assembly is creating an excessive number of laws. The number of bills proposed per lawmaker is said to be 21 times that of the United States and 172 times that of the United Kingdom.

Most individual laws contain regulatory elements. The reality we face is that the number of regulations inevitably increases in proportion to the number of legislative bills, and the number of bills continues to rise. As long as the number of bills is recognized as a measure of legislative activity performance per lawmaker, it will be difficult to curb this legislative frenzy. In this situation, there are fatal limitations to government-led regulatory innovation and legal system improvement.

The ruling and opposition parties in the National Assembly, which account for over 90% of legislative bills, must unite to lead efforts to minimize legislation and abolish regulatory legislation. This is the best way to enable regulatory reform that businesses and citizens can feel, and I believe that when this is practiced, the National Assembly will become a truly representative institution trusted by businesses and citizens alike.

Kim Hyun-gon, Director of the National Assembly Future Institute