24 Ministries Split 88 Trillion Won Population Budget... No Centralized Control Tower

Citizens visiting an exhibition are looking at various childcare products. Photo by Courtesy

While the central government is allocating 88 trillion won to address low birth rates and population aging, criticisms have arisen that the budget is divided across 24 ministries, making it challenging to pursue policy objectives consistently. Unlike the national research and development (R&D) or disaster and safety budgets—which have established pre-coordination procedures—there is effectively no mechanism for adjusting the population policy budget, even though it is larger in scale.

According to the Korean Economic Association on August 30, Hyungsik Kim, Professor of Economics at Kyung Hee University; Jeongin Lee, Senior Research Fellow at the Korea Institute of Public Finance; and Youngjik Kim, a doctoral candidate at the Graduate School of Public Policy, Sungkyunkwan University, highlighted these issues in a recent paper published in the Journal of Fiscal Studies, titled “The Necessity and Measures for the Introduction of a Prior Review System for Population Policy Budgets.” For 2025, the central government plans to spend 88.3 trillion won on implementation plans for low birth rates and an aging society, amounting to 13% of the total government budget. However, beneath four major strategies and 20 major tasks, there are 283 projects being executed in a multi-ministerial framework involving 24 administrative bodies.

Upon analyzing the projects by ministry, the 20 major tasks involved an average of 4.3 ministries per task. For each major strategy, between 10 and 15 ministries undertook work toward the same objective. Using both the Herfindahl-Hirschman Index (HHI) and entropy indices, which measure market concentration, the research team found that, for 9 out of 19 key tasks, the budget was fairly evenly divided among several ministries without a clear lead ministry. In contrast, with six aging-related tasks—including elderly income security and integrated care—one ministry managed the overwhelming majority of the budget.

The research team pointed out that such a structure can weaken the connection between the performance of individual projects and higher-level policy goals. For example, promoting parental leave requires not just wage subsidies but also legal and institutional reforms, alongside changes in social perceptions. However, if multiple ministries each pursue separate projects, it becomes difficult to gauge each project’s contribution to the overall goal or to determine the appropriate scale for each project.

The solution proposed by the research team is the introduction of a prior review system for the population policy budget. Under this system, after each ministry submits its budget requests but before the budgeting authority finalizes allocations, a population policy coordination body would screen projects to eliminate overlaps and set priorities. Currently, 29.6 trillion won in national R&D spending is pre-coordinated by the Ministry of Science and ICT; 23.8 trillion won in disaster and safety budgets is managed by the Ministry of the Interior and Safety; and 6.5 trillion won in Official Development Assistance (ODA) by the Committee for International Development Cooperation. However, despite the population policy budget totaling a greater sum than these three combined—88 trillion won—there is no such preliminary coordination process. While the Presidential Committee on Aging Society and Population Policy reviews and evaluates implementation plans, its authority to directly influence actual budget compilation is limited.

An elderly person is engaged in a craft activity at a local government daycare center. Photo for reference

The paper recommends not only expanding the scope of prior budget review for population policies to include local government programs in addition to the central government’s responses to low birth rates, aging, and population structure changes, but also applying differentiated reviews based on the nature of each project. Specifically, it proposes forming six expert working groups—covering pregnancy, childbirth, and childrearing; youth and housing; family-friendly initiatives; senior welfare; shrinking society response; and expansion of the economically active population. Mandatory legal expenditures or recurring programs would receive streamlined written reviews, while new or strategic projects would undergo in-depth evaluations by external experts. The paper particularly stresses the need to ensure that review results are binding. It also argues that exceptions where budget authorities do not reflect review outcomes should be minimized—limited to cases such as overall fiscal adjustment or the need to maintain fund and account soundness. The paper emphasizes, “Population policy involves the participation of many ministries and the large budget scale means that simply understanding the project structure takes significant time,” adding that it is necessary to designate a dedicated support organization to regularly collect and analyze data.

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