Byong Seob KimJin Hyung Kim

Public Prosecution ReformPublic Prosecution ReformIVIV

Gov. Innovation & TrustGov. Innovation & TrustIIIIII

Why Trust in Government? Why Trust in Government? IIII

II IntroductionIntroduction

National Tax Service Reform National Tax Service ReformVV

Policy Implications & Conclusion Policy Implications & Conclusion VIVI

IntroductionIntroductionIIII

1. Describe why emphasizes ‘principle & trust’ as a vision for government innovation.

2. Explain what we have reformed to increase public trust in government.

3. Analyze effect of government innovation on trust in government

4. Suggest policy implications for improving trust in government.

Why Trust in Government?Why Trust in Government?IIIIIIII

Even in low trust, economic growth achieved in the past

But for a leading nation, high level of trust needed

Effective policy implementation & realizing policy

objectives, high level of trust needed

Even in low trust, economic growth achieved in the past

But for a leading nation, high level of trust needed

Effective policy implementation & realizing policy

objectives, high level of trust needed

Success in economic recoveryPeace in Korean PeninsulaBut, repeated corruption & scandals

Success in economic recoveryPeace in Korean PeninsulaBut, repeated corruption & scandals

From Gov.-led State to

Governance State

From legacy & liabilities of Former Gov.

Traditionally ‘in-group’ focused on personal ties

‘Out-group’ & ‘between-group’ belittled: low social trust

Traditionally ‘in-group’ focused on personal ties

‘Out-group’ & ‘between-group’ belittled: low social trust

Trust Characteristic

of Korea

$$

Why Trust in Government?Why Trust in Government?IIIIIIII

Ruling entity

(politicians and top officials)

‘In-group’ big businessmen

favorfavor

Corruptive Union between Power & Wealth

Two sons of the then-President (Kim Dae-jung) convicted

Public detest and distrust high: civic movement

Principle and TrustPrinciple and Trust

Scandals leading to Public Distrust

Gov. Innovation & Trust Gov. Innovation & Trust IIIIIIIIIIII

Local Referendum System

Resident Recall System

Resident Suit System

Promotion of online Participation,

and more….

Local Referendum System

Resident Recall System

Resident Suit System

Promotion of online Participation,

and more….

Expanding Administrative

Information Disclosure

Constructing Digital Budget

Accounting System

Introducing Record

Management System

Constructing E-Government

Infrastructure, and more….

Expanding Administrative

Information Disclosure

Constructing Digital Budget

Accounting System

Introducing Record

Management System

Constructing E-Government

Infrastructure, and more….

Innovative Tasks for More Participation Gov.

Innovative Tasks for More Participation Gov.

Innovative Tasks for More Transparent Gov.

Innovative Tasks for More Transparent Gov.

** For more information, please refer to the book “A New Wave of Government Innovation in Korea

’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ‘05

[ MOGAHA (2005) )

The Number of Annual Application of Administrative Information Disclosure The Number of Annual Application of Administrative Information Disclosure The Number of Annual Application of Administrative Information Disclosure The Number of Annual Application of Administrative Information Disclosure

12,146

21,55917,146

18,694

26,33842,930

61,586

86,006

108,147

192,295

104,024

130,841

• Non-disclosure

: 11,412(9%)

• Partial dislcosure

: 12,568(11%)

• Entire disclosure

: 96.899(80%)

• Non-disclosure 11,412(9%)

• Partial dislcosure 12,568(11%)

• Entire disclosure

96.899(80%)

• Total number of applications

cases

• Total number of applications

cases

The Number of Disclosure of Administrative Information in 2006The Number of Disclosure of Administrative Information in 2006

[ MOGAHA (2006) ]

Gov. Innovation & Trust Gov. Innovation & Trust IIIIIIIIIIII

Participation, Transparency;

from the experiences.

Major FactorsMajor

Factors

Complex Factors and Causal Relationship

Complex Factors and Causal Relationship

Participation, Transparency; Intervening VAR

but their correlation to trust is hard to find.

Reform Measures

Participation

Transparency

Trust in Government

Trust in Government

Citizen’s Expectation

Organizational Level

A test model of trust in government

1. Public distrust in Prosecutor1. Public distrust in Prosecutor

3. Effect of reform on trust in government • Content Analysis

Integrity Perception Index

3. Effect of reform on trust in government • Content Analysis

Integrity Perception Index

2. Reform measures • Independence from politics, especially from the President.• ‘democratic controls’ of the prosecution - Reinforce the function and role of the Minister of Justice to

check prosecutors - Hearing system for the nomination of the Prosecutor General - Civil monitoring and civil Ombudsman have been introduced.

2. Reform measures • Independence from politics, especially from the President.• ‘democratic controls’ of the prosecution - Reinforce the function and role of the Minister of Justice to

check prosecutors - Hearing system for the nomination of the Prosecutor General - Civil monitoring and civil Ombudsman have been introduced.

Public Prosecution Reform CasePublic Prosecution Reform CaseIVIVIVIV

200

100

300

(case)

162162

2626

110110124124

100100

140140

2121

6622

22 22

5757

1111 1111 44 12122525

516516

Annual frequency of the number of “prosecution reform” citation in Korea’s 5 major newspapers

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

9

8

7

6

5

4

3

4.26

7.288.15

8.37

7.80

( Point )

KICAC Integrity Perceptions IndexKICAC Integrity Perceptions Index

Integrity Score

(out of 10 points)

Source: Korea Independent Commission Against Corruption (KICAC)

2002 2003 2004 2005 2006 (Year)

5.82

6.80

8.188.42 8.77

6.43

7.71

8.388.68

8.77

Public Organization Average

National Tax Service

Prosecutor’s Office

1. Negative Perception on NTS

Negative perception began to be imprinted during the Japanese colonial period Such public perception on taxes and behavior of revenue officials remained after independence.As taxes were assessed more or less at the discretion of the tax inspector, exposure to corruption for revenue officials and unfair taxation to some extent was inevitable.Reform measures demanded to root out negative perception and behavior

National Tax Service ReformNational Tax Service ReformVVVV

2. Reform measures

Major strategy to overcome the problem-to identify all the sources of tax revenue,-without direct contact between tax payer

and revenue official

Many reform measures were implemented toward this direction since the National Tax Service (NTS) was established in 1966

National Tax Service ReformNational Tax Service ReformVVVV

1999 reform measure

-Reorganization of NTS

-Credit card,

For participation; income

deductions, credit card lottery system.

More transparency; the rate of credit card payment

For participation; income

deductions, credit card lottery system.

More transparency; the rate of credit card payment

National Tax Service ReformNational Tax Service ReformVVVV

2003 reform measure

-Hometax-Cash Receipt

System

Toward participation, various tax support programs for business; income deductions as well as lottery system for consumer.

-More transparency; Cash receipt and credit card usage as a percentage of private consumption spending; Estimate of automatic exposure from credit cards and cash receipts

Toward participation, various tax support programs for business; income deductions as well as lottery system for consumer.

-More transparency; Cash receipt and credit card usage as a percentage of private consumption spending; Estimate of automatic exposure from credit cards and cash receipts

National Tax Service ReformNational Tax Service ReformVVVV

200,000

300,000

400,000

2004 2005 20062001 2002 20031999 2000

100,000

Cash Receipt and Credit Card Usage as a percentage of Private Consumption Spending

(sourced by the National Tax Service 2007)

Private Consumption Spending

① Credit Card

② Debit Card

Cash Receipt③

15.5%

25.5%

39.1%

45.7% 43.9% 42.3% 50.8%

56.9%

( Unit: billion won )

2004 2005 20062001 2002 20031999 2000

Cash Receipt and Credit Card Usage as a percentage of Private Consumption Spending

(sourced by the National Tax Service 2007)

① Credit Card

② Debit Card

Cash Receipt③

15.5%

25.5%

39.1%

45.7% 43.9% 42.3% 50.8%

56.9%

50%

25%

3. Effect of reform on Trust in Government

- Integrity Perception Index - Integrity Perception Index

- Taxpayer Satisfaction index- Taxpayer Satisfaction index

National Tax Service ReformNational Tax Service ReformVVVV

9

8

7

6

5

4

3

4.26

7.288.15

8.37

7.80

( Point )

KICAC Integrity Perceptions IndexKICAC Integrity Perceptions Index

Integrity Score

(out of 10 points)

Source: Korea Independent Commission Against Corruption (KICAC)

2002 2003 2004 2005 2006 (Year)

5.82

6.80

8.188.42 8.77

6.43

7.71

8.388.68

8.77

Public Organization Average

National Tax Service

Prosecutor’s Office

80

70

60

50

(100%)

[NTS 2007]

1998 1999 2000 2001 2002 2003 2004 2005 2006

75.9 76.1 76.5 76.880.2

57.364.4

73.1

75.8

Taxpayer Satisfaction Index Taxpayer Satisfaction Index

Policy Implications & Conclusion Policy Implications & Conclusion VIVI