Responsive Democracy: Increasing State Accountability in East Asia

6 | Sunset Laws and the Acceleration of Regulatory Reform in South Korea

6 | Sunset Laws and the Acceleration of Regulatory Reform in South Korea Since the passage of the 1946 Administrative Procedure Act (APA) in the United States, scholars have sought to understand the rationale for various procedures that executive agencies must follow. How newly elected presidents go about restructuring their bureaucracies can shape not only the development of democracy in general but also the nature and extent of the state’s movement toward greater democratic responsiveness. This book has focused on the passage of APAs as a comprehensive and widely applicable tool for politicians confronting the challenge of restructuring the state. However, APAs are not monolithic; rather, they consist of multiple, discrete regulatory reforms, each with potentially differing effects . Assessing the validity of my theoretical argument thus requires tracing the effects of speci‹c reforms to see whether the actual mechanisms implemented by APA passage produce the predicted effects with respect to executive control over the bureaucracy. In other words, if my theory is correct, speci‹c reforms should be linked to speci‹c regulatory outcomes. One potentially important regulatory reform, included in Korea’s 1997 APA (KAPA II), is the so-called sunset provision, one of several major provisions in KAPA II that are clearly inconsistent with the lock-in hypothesis (described in chapter 2). According to KAPA II’s sunset provision, all policies and regulations covered under the law automatically expire after ‹ve years unless they are explicitly renewed. The key question thus becomes whether Korea’s sunset provision facilitated reforms in the direction favored by the chief executive who enacted it, Kim Young Sam. Sunset provisions are a common component of administrative reform outside the Korean case, and they do not lock in a status quo; they do pre105 cisely the opposite. Why would a president support a reform proposal that limits the life of his administration’s regulatory rules? In this chapter, I develop a spatial model to investigate the motivations for and the implications of the sunset rule. The model demonstrates how administrative reform can be used to promote change rather than to lock in a current policy regime. To test the model’s predictions, I gathered data on the persistence or expiration of all regulations from all ministries in Korea between 1998 and 2005.With this data, I investigate the correlates of regulatory sunset at the intraministerial level. In particular, I consider whether within each ministry, regulations that do not bene‹t the president’s support coalition are, as the model predicts, more likely to expire as a consequence of the sunset provision than are regulations that bene‹t the president’s support coalition. The chapter opens with a brief political history of the adoption of the sunset provision contained in KAPA II before developing a spatial model of the rule-making process both with and without the sunset rule. Next, I apply the model to the Korean case and present evidence on the use of the sunset procedure and renewal process. I conclude with some general observations regarding the role of sunset provisions and with some speci‹c comments regarding the Korean case. The Adoption of the Sunset Rule in Korea As discussed in chapter 3, Korea’s state-led economic development strategy , begun in the 1960s, yielded impressive rates of economic growth. The military government implemented this strategy via a regulatory regime that favored the interests of industrial conglomerates (chaebol) over those of the middle class (Amsden 1989; Haggard 1990; Haggard and Kaufman 1995; Wade 1990). From the perspective of the prodemocratic reformers who inherited the administrative structures left over from military rule, this strategy resulted in excessive government regulations. In recent years, the Korean government and international groups such as the Organisation for Economic Co-Operation and Development have pointed to excessive government regulation as preventing the market from effectively allocating resources as well as lowering Korea’s competitiveness. Also, in a period of accelerating globalization, government regulations emerged as a major cause of trade friction (Korea, Regulatory Reform Committee 2004). In response to these concerns, the Korean government began regulatory reform in the 1990s. 106 | Responsive Democracy As part of KAPA II, the Kim Young Sam administration supported the sunset rule. KAPA II passed in the National Assembly without any opposition (Chun 1998; J.-S. Lee and Han 1999). The details of the sunset provision are delineated in KAPA II, Article 8, “Speci‹cation of Durations and Regulations.” Article...