Tens of Trillions Spent, Youth Still Flock to Capital

In 2019, the population of the capital region surpassed that of non-capital regions. By the end of last year, the population gap had widened to 1.04 million people. People continue to flock to the capital region. Meanwhile, finances are directed toward local areas. Nearly 90% of the National Balanced Development Subsidies were allocated to non-capital regions. Why has money failed to retain people? The issue lies not in budget size but in a 'political monopoly structure' that prevents resources from being converted into innovation and growth. In the June local elections, a single party overwhelmingly won in Daegu·Gyeongbuk and the Honam region. In one-party-dominated areas, nomination equals election. Where nominations determine victory, nomination power concentrates among incumbents and established groups, leaving little room for newcomers and youth. The 'double barrier' of no inter-party competition and closed intra-party competition stifles political dynamism. Institutions embracing entry and competition form the foundation of prosperity, as highlighted by 2024 Nobel Economics laureates Acemoglu, Johnson, and Robinson. Politics follows the same logic. 'Monopolies without competition' breed rent-seeking over innovation. Mayors must face pressure from potential election losses to deregulate and reorganize interests. Without such pressure, budgets flow into symbolic projects. A study on the Special Account for Regional Balanced Development revealed that budgets were allocated based on political factors like mayors' re-election prospects or the number of lawmakers, rather than regional development levels. Some regions receiving large funds even faced higher risks of decline. While regional decline can lead to political stagnation, without competition, decline cannot be reversed. Economist Albert Hirschman described the remaining paths for members of a declining organization as 'Voice' and 'Exit.' If change is possible, voice is raised; if not, people leave. Over 20 years, 960,000 people net outflowed from non-capital regions, and last year, 60,000 youths aged 19–34 in non-capital regions moved to the capital. The primary reason for youth departure is jobs, not education. Jobs are created by businesses, not budgets. Companies prioritize regulatory speed and predictability over subsidies. Delaying reforms to lower these barriers is a product of non-competitive politics. Youth exodus is a vote of no confidence in local politics. The solution is to inject 'competitive pressure' into non-capital politics. First, an evaluation and reward system is needed to induce policy competition among local governments. Canada's Fraser Institute's 'North American Economic Freedom Index' shows that provinces with higher economic freedom saw population growth approximately 18 times faster than those with lower freedom over the past decade. Similarly, South Korea should establish an independent 'Local Regulation and Innovation Index' by private and academic sectors, publicly disclosing performance in regulatory reform, business attraction, and youth employment, and differentially allocate fund to address regional decline based on regional outcomes. Second, the gates to political entry must be opened wide. Electoral systems unlock inter-party competition. Single-member districts, where major parties easily split seats, should be expanded to multi-member districts. Separately, incentives like state subsidies should be provided to parties that guarantee real nomination opportunities for youth and newcomers to infuse 'new blood.' Policies focused solely on pouring funds into non-competitive structures to prevent regional extinction have failed over the past 20 years. When local governments compete on objective indicators and inter- and intra-party competition revives, non-capital regions can attract businesses and youth. What is urgently needed now is not another tens of trillions of won in budget but 'political competition' to drive regional innovation.