This study examines rural development in Korea in the context of ongoing decentralisation reforms. In particular, it examines the effects that Korea’s balanced national development policy is having on rural development. As the government’s decentralisation agenda advances, new efforts are underway to devolve competencies and fiscal capacity to regional and local governments. This is expected to provide local governments with a greater control of their development strategies, foster urban-rural linkages and promote inclusive growth. These efforts are making some headway. The high levels of concentration in the capital city of Seoul have started to decline in recent years with a concomitant positive population growth observed in some rural regions. Notwithstanding those positive developments however, the balanced national development initiative could further promote inclusiveness of, and growth in, rural communities to enhance well-being and further leverage on specific place-based advantages.

Over the last 60 years, the Republic of Korea has experienced among the fastest growth rates in the OECD. An export-driven industrialisation has delivered a dramatic increase in income per capita and overall living standards. Korea is considered one of the most successful stories of productivity catch-up across OECD member countries. The country has become highly urbanised, with only 11% of Koreans living in rural regions in 2018 (based on the OECD’s regional definition based on access to cities). This is less than half of the OECD average rural population (29%). Furthermore, Korea’s rural population tends to live within a short journey of cities, with a median travel time of just 25 minutes compared to an OECD average of approximately 114 minutes.

Korea is one of the countries that achieved the fastest growth in the latter half of the 20th century. An export-driven industrialisation has delivered a dramatic increase in the income per capita and in overall living standards. Entering the 21st century, Korea’s ongoing economic expansion has made it one of the most successful stories of productivity catch-up across OECD member countries. The industrialisation of Korea’s economy over the last 60 years has shifted its specialisation from agricultural to industry and now to services and has been largely responsible for the country’s convergence. In 2003, Korea’s gross domestic product (GDP) per capita was 28 percentage points below the OECD average. In just a decade, the country was able to reduce the gap by 8 full percentage points. The annual GDP per capita growth rate has been 2.6 times higher in Korea than in OECD member countries on average, growing annually at a rate of 3.07 in GDP per capita during 2003-16.

Chapter 2 provides a diagnosis of the performance of rural regions as compared to OECD trends. It first examines demographic patterns in rural Korea, focusing on population levels, growth rates and elderly dependency ratios, and how these influence overall settlement structures. The chapter then benchmarks the performance of Korean rural regions, examining trends in gross domestic product (GDP) per capita and productivity. This section also examines the main sectors of specialisation in rural Korea. The chapter finally examines several dimensions of well-being against OECD trends. In order to draw international comparisons, this chapter makes use of the OECD regional typology, the OECD regional definition based on access to cities and the OECD functional urban areas definition (FUAs), as these apply a consistent definition across OECD countries.

Chapter 3 examines Korean’s rural policies, its multilevel governance framework and current efforts towards decentralisation. It first describes the key actors for regional and rural policies, followed by the historical evolution of rural policies and an assessment of current rural policy approaches in Korea. The chapter then describes the main features of Korea’s multilevel governance framework and current approaches to decentralisation. The chapter then focuses on challenges and opportunities for implementing rural policies in the context of decentralisation.

Chapter 4 describes lessons from OECD countries on decentralisation relevant to the current Korean context. It starts by describing 10 OECD guidelines to implement decentralisation. It then focuses on several key dimensions drawing from examples in OECD countries on vertical co‑operation, horizontal co-operation, capacity building, public engagement and, finally, on financing across levels of government.

This chapter starts by summarising the OECD framework on rural-urban linkages followed by a description of Korea’s innovation cities. It then draws on four examples of linkage development pertinent to the objectives and continued growth of the innovation cities from OECD countries. These examples include: Nuremberg, Germany; Brest-Pays Centre-Ouest Bretagne, France; Southern Ontario, Canada; and finally Scotland from the United Kingdom.

The final chapter focuses on a case study of two of Korea’s regions, Chungcheongbuk-do and Jeollanam-do. This includes a review of the demographic and economic trends in each region, followed by an identification of the main drivers and bottlenecks influencing these trends. The policy approaches currently underway in each region will then be reviewed and a number of recommendations identified.