[Joo-heon Park’s Opinion] Populism legislation for elections in disguise

[The Korea Economic Daily, November 12, 2023] Joo-heon Park (PERI Research Fellow/Energy ꞏ Environment)

[Joo-heon Park’s Opinion] Populism legislation for elections in disguise

The general election is less than five months away. For some reason, elections always seem to be a drag on the economy. Populism legislation and promises are often made in the quest for votes.

In the lead-up to an election, politicians are often influenced by powerful organized interests, finding it challenging to resist the demands of interest groups wielding a basket of votes. This is why populism legislation that protects various interest groups is so common in the pre-election period.

The benefits of populist legislation are often concentrated in the hands of a few interest groups, while the costs are borne by the unorganized majority of citizens. The benefits generated by populist legislation result from rent-seeking, artificially increasing the share of interest groups without any specific productive contribution. In other words, the advantages concentrated in the hands of a few are generally shouldered by the unorganized majority, leading to a reduction in overall economic benefits.

Populism legislation is a theoretically unfavorable strategy in one-person, one-vote elections. However, benefits that are concentrated in a small number of voters are immediately felt and translate into votes, while losses are often spread too thinly to be felt by many individual voters and are therefore not particularly disincentivizing. Moreover, the effect is multiplied when a series of populist bills are enacted that are customized for different interest groups. This is because voters are sensitive to the direct benefits of being part of the minority within their own interest group, but insensitive to the costs of being part of the majority outside of it.

The Yellow Envelope Act and the Broadcasting 3 Act are the latest in a series of interest-group-targeted populist bills that the opposition party pushed through this session, following the amendments to the Grain Management Act and the Nursing Act last spring. Even though the government and the ruling party have clearly stated their opposition to the bills, arguing that they will not only reduce growth potential but also go against the interests of the people as a whole, the legislative process was rushed through by skipping the three-step deliberation process of the National Assembly, which is designed to prevent the dominance of the majority in the National Assembly, including the standing committee, the legal committee, and the plenary session.

Naturally, there should have been a fierce debate between the ruling and opposition parties through the deliberation process. Without deliberation, only majority rule remains. Blind faith in the majority can lead to legislative dictatorship. It is reasonable to suspect that the reason for pushing through a series of populist legislations, even when the last bulwark against legislative dictatorship, the presidential veto, is clearly expected, is to manage the image of “protecting individual interest groups in the legislative process. In short, it could be a political show for the election.

The reason for the proliferation of populist legislation for elections in Korea is the parliamentary legislation process. While government legislation has a complicated and demanding process, from drafting a bill to going through various regulatory review procedures such as the Regulatory Reform Commission, parliamentary legislation can be proposed with the consent of only 10 lawmakers without any review process. Therefore, it is necessary to introduce a strict screening process into the parliamentary legislation process to block populist legislation that favors minority interests.

Populism legislation rushed through in the lead-up to an election ultimately protects the interests of a small group of special interests while hurting the entire economy. The only way to stop this now is for voters to exercise good judgment. It should not be forgotten that ailing economies sooner or later pay their bills without regard to party lines.

November 12, 2023

<Joo-heon Park, PERI Research Fellow> Professor of Economics, Dongduk Women’s University