Urbanization and Urban Policies in Korea

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Urbanization and Urban Policies in Korea2 >

Copyright © 2011 Korea Research Institute for Human Settlements

All rights reserved. Printed in the Republic of Korea. No part of this book may

reproduced in any manner without permission except in the case of brief

quotations embodied in critical articles and reviews. For information address

Korea Research Institute for Human Settlements, 254, Simin-daero,

Dongan-gu, Anyang-si, Gyeonggi-do, 431-712, Korea.http://www.krihs.re.kr

Urbanization and urban policies in Korea

Jaegil Park, Daejong Kim, Yongseok Ko, Eunnan Kim, Keunhyun Park, and Keuntae Kim

Korea Research Institute for Human Settlements

118 p. ISBN 978-89-8182-797-7


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CHAPTER1 INTRODUCTION 3<

Research Team

Research in charge Jaegil Park Senior Research Fellow

Researchers Daejong Kim Associate Research Fellow

Yongseok Ko Associate Research Fellow

Eunnan Kim Associate Research Fellow

Keunhyun Park Assistant Research Fellow

Keuntae Kim Assistant Research Fellow


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PREFACE 5<

Preface

The G20 Summit held in November 2010 wrapped up talks in Korea, adopting

the ‘Development Agenda’ as an official G20 agenda item. The development agenda

suggested building the capacity of developing countries. Therefore, considering the

importance of capacity building of developing countries in the national land develop-

ment field, it will be one of responsibilities of Korea Research Institute for HumanSettlements (KRIHS) to help developing countries by providing development experi-

ence and knowledge in Korea. In this context, KRIHS recently organized the Global

Development Partnership Center (GDP Center), which is fully responsible for support-

ing developing countries.

A lot of international organizations have supported developing countries to

strengthen their capacities, and I think that it will be more effective for Korea to pull

these organizations together. By looking into characteristics of national growth anddevelopment in Korea from international perspectives, these organizations can play a

major role in presenting useful information about whether Korea can contribute to sup-

porting developing countries in many ways. In particular, the World Bank has served

as one of the leading international organizations in helping developing countries and

maintained very close cooperation with our institute by working on a number of pro-

jects with us. As a collaborative research project with the World Bank, this research


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concentrates on looking back at the urbanization process and urban policies in Korea to

provide useful options for developing urban policies or urbanization processes which

will be the most important issue in developing countries.

In the past few years, a large-scale influx of rural populations into urban areas

has accelerated the urbanization process in developing countries. Therefore, finding

better solutions to urbanization problems and maintaining high economic growth has

become a great concern. In this regard, I think that Korea’s urbanization process will

be worth noticing as a good example of achieving urbanization with economic growth

at the same time. Korea has actively used urbanization strategies as urban planning and

urban polices in its high economic growth process. This is a markedly opposite attitudecompared to those of developed countries which have thought of urbanization and

urban growth negatively and focused on making urban policies for suburban develop-

ment. However, even developed countries have now recognized the negative impacts

of urban sprawl caused by suburbanization and are considering ways of creating more

compact cities. This is another important reason why developing countries need to pay

attention to the urbanization policies in Korea.

Considering the great interest of developing countries in the urbanization pro-cess and urban policies in Korea, I am quite sure that the outcomes of this research will

be a great help to those who are interpreting their urbanization process and developing

urban policies suitable for their urban planning and economic conditions. Also, this

report will give us many lessons by providing a more precise understanding of the

process of economic and urban growth in Korea and suggesting more desirable direc-

tions in the future. Also, it is expected that the outcomes of this research will serve as

helpful material which the World Bank can use for supporting developing countries

when making urbanization policies. I think that expansion of this research subject fits

the development agenda of the G20 Summit.

I would like to give thanks to Senior Research Fellow Jaegil Park, Associate

Research Fellows Daejong Kim, Yongseok Ko, Eunnan Kim, and Assistant Research

Fellows Keunhyun Park and Keuntae Kim. Despite the short time of six months, they

put all their efforts and passion into collecting and analyzing information about ur-


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PREFACE 7<

banization and urban policies for this report. Also, I would like to express my deep

appreciation to the advisory committee members of this research: Professor Il Kwon

(Chungju University), Dr. Seonki Kim (Senior Research Fellow of the Korea Research

Institute of Local Administration), Dr. Youngkook Kim (Associate Research Fellow

of the Korea Transport Institute), and Dr. Inok Hong (Head of the Research Division

in the Korea Center for City and Environmental Research). Finally, I would like to

express my thanks to Vice President of KRIHS Kyounghwan Sohn and other commis-

sioners who examined the outcomes of this report.

Yangho Park

President Korea Research Institute for Human Settlements


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The Aims and Composition of this study

In the coming decades, rapid urbanization will be the greatest challenge to de-

veloping countries. It is very urgent for them to make all the urban policy efforts harmo-

nized with the spatial characteristics of sustainable economic growth. The World Bank

has been very passionate to guide the developing countries by viewing the urbanization process as positive for economic growth and social development. Concerning this mat-

ter, the Korean experience seems to be very meaningful as it has succeeded in economic

growth despite the high speed of its own urbanization. The World Bank wanted to test the

Urbanization Hypothesis elaborated for developing countries and asked KRIHS to do a

simulative research by applying the Urbanization Hypothesis to the Korean urbanization

process as well as by reviewing the urbanization through indicators. KRIHS welcomed

the World Bank’s offer because it would be a good opportunity not only to helping de-velop countries globally, but also to find any implications for future urban policy direc-

tions by looking back at past experiences.

This study consists of 5 chapters including the introduction. Chapter 2 outlines the

Urbanization Hypothesis and analytical framework for this study. Chapter 3 analyzes the past

Korean urbanization policy frameworks. Chapter 4 diagnoses Korean urbanization through

some selected indicators. The last chapter describes the conclusions of this study.

Summary

Urbanization and urban policies in KoreaJaegil Park, Daejong Kim, Yongseok Ko, Eunnan Kim, Keunhyun Park, Keuntae Kim


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SUMMARY 9<

The theoretical background and analytic framework

In chapter 2, the Urbanization Hypothesis of the World Bank is reviewed and

interpreted as the theoretical background and the analytic tool of this study. According

to the preceding research of the World Bank, all the policy efforts to counter urbaniza-

tion can be categorized as institution, infrastructure, and intervention (the 3 ‘I’s, which

corresponding with the spatial characteristics of economic growth, namely density,

distance, division (the 3 ‘D’s). Evolving the urbanization stages, urbanization requires

three kinds of policies (beginning with institution followed by infrastructure, and next

by intervention) with each stage being cumulative and more deliberate. On a national

and regional scale, the policies for these categories stand for urban planning and man-agement, urban connectivity, and urban livability. The World Bank also developed 59

indicators across the 4 policy fields to diagnose the urbanization process. This study

reviews the Korean urbanization process in 4 adjusted policy areas by separating hous-

ing supply from urban planning and management, and diagnoses the process with 8

selected indicators, which are obtainable from annual serial data.

The review of the past Korean urbanization process

The Korean urbanization process can be also divided into 3 stages: incipient,

intermediate, and advanced, through which the changes in urban planning and land

management, housing supply policies, transportation policies, and slum housing poli-

cies were reviewed. The findings are as follows. Concerning urban planning and land

management, the land development programs were established first, followed by a

land use regulation system, and then a comprehensive urban planning system. At the

beginning of the advanced stage, there appears a new tendency for integration in the

diverged system. It is also noted that Korean society suffered very much from its hous-

ing shortage with no apparent housing polices during the incipient and intermediate

urbanization period, but housing shortage was somewhat solved by the implementa-

tion of the massive housing construction plans in the early 1990s. The transportation

system has been constructed by finishing the railroad system at the incipient stage,

followed by the express highway system in intermediate urbanization period, and then

followed by the metropolitan highway system and the high speed railroad system in the


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advanced period. Needed as an intervention policy in response to the spatial dimension

‘Division’ in urban areas, slum housing clearance and relocation has been tried during

all the intermediate period but with no success. Then in the early advanced period,

slums deteriorated and the dwellers were scattered around the city region being af-

fected by the strong market forces in the residential redevelopment projects. It was also

confirmed that throughout the urbanization process, urban planning and land manage-

ment had been considered as the most important urbanization policy areas.

The exemplary diagnosis of Korean urbanization through the 8 indicators

In chapter 4, Korean urbanization from the intermediate to the advanced stageswas evaluated by the 8 indicators compiled from 8 items, which were related with 6 parts

of 3 fields including urban portfolio, urban planning and management, and urban con-

nectivity. The data were assembled and structured in serial GIS layers by the 167 jurisdic-

tions of Si and Kun (City and County), and analyzed by the auto- correlative method. The

urban portfolio change was diagnosed through the 3 indicators of urbanization rate, city

size distribution, and the manufacturing employment ratio, revealing that at the incipient

stage the large city had grown at first, and at the advanced stage it appeared that metropolitanization occurred by populations migrating from the core central cities to surround-

ing medium large cities. The ‘Urban Planning and Management’ area was diagnosed by

the three indicators - water supply, urban land, and housing supply ratio. Urban land had

been supplied stably by the introduction of the complete land purchasing method in 1980,

and the housing shortage was lessened by the implementation of the massive housing

construction plan around 1990. Urban connectivity was diagnosed through the indicators

of both registered vehicles per road length and the arrival time to the nearest expressway.

As the number of vehicles grows, metropolitanization seems to be facilitated, manifesting

the importance of mass transportation systems. Through the indicator of the arrival time

to the closest interchange, it is noted that the express highway system covered almost the

entire country as daily-life infrastructure. Also, the introduction of high speed railroad

system such as the Korea Train Express (KTX) line played a major role in shrinking the

entire country into a half-day life zone. The policies undertaken in Korea can be read by

reviewing of the diagnosis through the 8 indicators.


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SUMMARY 11<

Conclusion

Chapter 5 presents the main conclusions as well as by-products achieved

through this study and the following research issues. The main conclusions are as

follows: the Urbanization Hypothesis is confirmed to be very useful and helpful in

reviewing Korean urbanization since the early 1900s. It should be also stated that the

analysis of urbanization policies and the diagnosis by indicators of the Korean urbani-

zation process are both very meaningful.

This study is expected to be utilized as one text to give an overall view of the

urbanization policies according to the stages of urbanization. It could be also reviewed

by the World Bank to complement its Urbanization Hypothesis and the indicators.Finally, following studies are suggested in supporting urbanization policies of devel-

oping countries: societal background, governance system, existing urban planning and

management system etc.

▶ Keywords urbanization, urban policy, developing country, the World Bank


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Contents

1. INTRODUCTION...........................................................................

1. Backgrounds and Objectives....................................................................

2. The Scope of Research and Research Methodology...............................

1) The Scope of Research..............................................................................

2) Research Methodology...............................................................................

3. Brief Review of Precedent Research........................................................

4. Flow of Research.......................................................................................

2. THEORETICAL AND ANALYTIC FRAMEWORK.......................

1. Economic Growth and Urbanization Strategies.......................................

1) Basic Assumptions......................................................................................

2) Urbanization Hypothesis.............................................................................

2. Urban Policy Features in Different Urbanization Phases.........................

1) Incipient Urbanization.................................................................................

2) Intermediate Urbanization..........................................................................3) Advanced Urbanization...............................................................................

4) Summary.....................................................................................................

3. Classifying Urban Policy Areas and Diagnostic Indicators.......................

1) Classifying Urban Policy Areas...................................................................

2) Diagnostic Urbanization Indicators.............................................................

3. URBANIZATION POLICIES IN KOREA......................................

1. Backgrounds of Urbanization Policies in Korea.......................................

1) Economic Growth and Infrastructure Investment.......................................

2) Urbanization................................................................................................

3) Economic and National Development Policies...........................................

2. Urbanization Policies in Korea..................................................................

1) Urban Planning and Land Management.....................................................

2) Housing Supply Policies.............................................................................

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CONTENTS 13<

3) Transportation Policies...............................................................................

4) Residential Policies in Low-income Neighborhoods..................................

3. Assessment of Urbanization Policies in Korea and World Bank’sUrbanization hypothesis...........................................................................

1) Assessment of Urbanization Policies in Korea...........................................

2) Review of World Bank’s Urbanization Hypothesis.....................................

4. EXEMPLIFICATION OF INDICATOR DIAGNOSIS....................1. Meanings of Indicator-based Diagnosis and Methodology......................

1) Meanings of Indicator-based Diagnosis.....................................................

2) A Method of Indicator-based Diagnosis......................................................

2. Indicator-based Diagnosis.........................................................................

1) Urban Portfolio............................................................................................

2) Urban Planning and Management..............................................................

3) Urban Connectivity......................................................................................

3. Indicator-based Diagnosis Results and Considerations for Constructionof Diagnostic Indicators.............................................................................

1) Indicator Diagnosis Results........................................................................

2) Consideration for Diagnostic Indicators......................................................

5. CONCLUSION.............................................................................

1. Main Conclusions.....................................................................................

2. Application of Research Outcomes and Further Research......................1) Application of Research Outcomes............................................................

2) Directions for Further Research.................................................................

REFERENCES..............................................................................................

APPENDIX: URBANIZATION POLICIES IN KOREA....................................

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Table 1 An “I for a D”: A Rule of Thumb for Calibrating the Policy Response 24

Table 2 Urbanization Indicators by World Bank 29

Table 3 Selected Indicators for Diagnosing Urbanization Process in Korea 31

Table 4 Social Development Indicator: Economic Growth 35

Table 5 Social Development Indicator: Basic Service Infrastructure 37

Table 6 Social Development Indicator: Transportation and Communication 38

Table 7 Change of Urbanization Rate (1960-2005) 43

Table 8 Population Change of Metropolitan Areas Since 1990 44

Table 9 Characteristics of the Economic Development Plans in Korea 46Table 10 The National Territory Development Plans in Korea (1972-2020) 48

Table 11 Departmental/Time-periodic Urbanization Policies 70

Table 12 Assessment of Urbanization Policy Responses Based on World Bank’sUrbanization Hypothesis

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Table 13 Selected Indicators for Diagnosing Urbanization 78

Table 14 Change of Urbanization Rate in 6 Regions 80

Table 15 Diagnostic Results: Urban Portfolio 87

Table 16 Urban Land Change by Land Use Categories 90

Table 17 Change of Housing Supply Ratio by Regions 92

Table 18 Diagnostic Results: Urban Planning and Management 94

Table 19 Diagnostic Results: Urban Connectivity 99

Appendix Table 1 Calculating the Land Compensation Price 112

Appendix Table 2 Land Acquisition Decisions and Appeals in Korea 113

Figure 1 Research Flow Diagram 21

Figure 2 Nominal GDP (billion $) 34

Figure 3 Nominal GNI per Capita ($) 34

Figure 4 Distribution of Industrial Output Value (Nominal Amount, %) 34

Figure 5 The Total Electric Power (60-09) 36Figure 6 The No. of Hospital Beds(65-07) 36

Figure 7 Housing Supply (62-09) 36

Figure 8 Water Supply (60-08) 36

Figure 9 The No. of Students (60-09) 37

Figure 10 The No. of Education Facilities (60-09) 37

Figure 11 The Length of Roads and Railroads (60-08) 39

Figure 12 The No. of Vehicles (Thousands, 60-09) 39

Figure 13 The Number of Telephone Subscribers and Telephone Supply Rate (60-09) 39

Tables & Figures


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CONTENTS 15<

Figure 14 Urbanization Rate of Korea (1920~2005) 40

Figure 15 Moran ‘s I Statistic of Spatial Autocorrelation 79

Figure 16 Change of Urbanization Rate in 6 Regions 81

Figure 17 Moran’s I Analysis(Urbanization Rate) 81

Figure 18 Change in Urbanization Rate of Cities and Counties(1960~2005) 82

Figure 19 The No. of Cities by City Size 83

Figure 20 Proportion of the Population by City Size 83

Figure 21 Change in Distribution of Cities by Size (1960~2005) 84

Figure 22 Moran’s I Analysis Result (Size Distribution of Cities) 84Figure 23 Change in the share of Manufacturing Employees at the City-county Level

(1960, 1985, 2005)85

Figure 24 Moran’s I Analysis Result (Proportion of Manufacturing Employees) 86

Figure 25 The Population Using Water and The Water Supply Ratio 88

Figure 26 Water Supply per capita per day and Capacity 88

Figure 27 Change of Water Supply Ratio (1971-2005) 88

Figure 28 Moran’s I Analysis Result (Water Supply Ratio) 89

Figure 29 Urban Land Change at the City-county level (1970-2009) 90

Figure 30 Moran’s I Analysis Results (Urban Land Area) 91

Figure 31 Change in the Number of Housing Units and the Housing Supply Ratio(1962~2008)

91

Figure 32 Change of Housing Supply Ratios by Regions 92

Figure 33 Change of Housing Supply Ratio (1970-2005) 93

Figure 34 Moran’s I Analysis Result (Housing Supply Ratio) 94

Figure 35 Change in the Number of Registered Vehicles per Road Length 95

Figure 36 Change in the Number of Registered Vehicles per Road Length at the City-county Level

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Figure 37 Moran’s I Analysis Result (The Number of Vehicles per Road Length) 97

Figure 38 Land Area Accessible to the Closest Expressway Interchange According to Arrival Time

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Figure 39 Change of Area by Arrival Time to the Closest Expressway Interchange(1970-2010) andTopographical Map

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Appendix Figure 1 The Site Plan of the Residential Redevelopment Project in Singye-dong,Yongsan-gu, Seoul

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Appendix Figure 2 Geothermal System Diagram 116


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1. Background and Objectives

According to the 2005 Revision of the UN World Urbanization Prospects report and the

UN State of the World Population 2007 report, the population in urban area will increase from 3.2

billion (49 percent of the world population) in 2005 to 4.9 billion (60 percent of the world popula-

tion) in 2030. 93 percent of the population increments will consist of the population of urban areas indeveloping countries. Developing countries are now concerned about how to relate urbanization with

economic growth. This concern is not limited to urban issues which developing countries face. It also

relates to sustainable growth of the global community.

As an international organization which aims to support economic growth for

developing countries, the World Bank, founded in 1944, has been concerned about

what future urbanization policies developing countries should establish in the face of

the rapid increase in urban population. In order to renew its urbanization perspectives,the World Bank recognizes that the urban policies of developed countries - which have

denied the congestion of urban population and focused on decentralizing urban popu-

lation to suburban areas - are not suitable for solving urban problems in developing

countries. Because urban policies in developed countries have been developed toward

creating car-oriented urban environments, they have made urban areas lose their vital-

ity and wasted too much energy and too many resources while achieving policy goals.

INTRODUCTION

By request of the World Bank which has supported urbanization policies of de-veloping countries, this study focuses on con rming the validity of the World

Bank’s urbanization hypothesis through an analysis of urban policies imple-mented throughout urbanization processes in Korea. Also, this study will diag-nose urbanization processes and urban policies in Korea as a hypothesis test-ing example by using the World Bank’s urbanization indicators.

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Instead, the World Bank suggests that the urban policies in Korea which concentrate

population and functions in urban areas and promote industrialization will provide

more helpful implications as solutions to urban problems in developing countries 1.

Realizing that the urbanization policies formed in Korea had positive impacts

on strong economic growth, the World Bank has been thinking about urbanization

policies suitable for developing countries. Based on this concept, the World Bank re-

cently developed urbanization indicators for evaluating whether urbanization policies 2

in developing countries are carried out in a reasonable way. Urbanization indicators

which are based on the urbanization hypothesis help check the progress of urbanization

and monitor the urban policies of each country.In order for developing countries to understand and implement these attempts

at supporting their urbanization policies, the World Bank requested that the Korea Re-

search Institute for Human Settlements (KRIHS) conduct a simulation research which

shows exemplar diagnosis results of urbanization and urban policies in Korea by us-

ing urbanization indicators and the World Bank’s urbanization hypothesis. Accepting

World Bank’s request, KRIHS conducted research to diagnose the urbanization pro-

cess in Korea through urban indicators and interpret Korea’s urban policies based onthe World Bank’s urbanization hypothesis.

To complement and develop the World Bank’s various experiments, this re-

search will verify the validity of the urbanization hypothesis and urbanization indica-

tors through an analysis of the urbanization experience in Korea. Also, this research

will serve as a new experiment for interpreting the urbanization process and urban

policies which have been implemented in Korea and which have contributed to estab-

lishing the new direction of Korea’s future urban policies.

1 Developed countries such as US and England are now spreading out New Urbanism movementincluding Smart Growth which breaks from suburban development and attracts population and em-ployment back to urban core areas. Semi-developed countries like Korea, however, have achievedstrong economic growth by creating compact cities. For these reasons, developing countries arenow interested in Korea urban polices as their urbanization models.

2 In this research, the term ‘urbanization policies’ does not mean urbanization phenomena whichexplain a process of immigrating rural population to urban areas and rapid urban population in-crease. It means public policies which help people to see cities as communities and spaces createdby their own visions in response to social change.


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2. The Scope of Research and Research Methodology

1) The Scope of ResearchThe temporal scope of this research dates back to the year of Korean inde-

pendence (1945) as well as the time when modernization began. This covers the pe-

riods ranging from the dawning of urbanization in the end of Chosun dynasty to the

time of immigration of rural populations to urban areas as well as the time of the indus-

trialization of Korea’s cities. Therefore, this research will define the temporal extent

ranging from Korea’s period of opening ports (1876) to the present (2010).

The spatial scope of this research generally covers the southern part of theKorean peninsula, which belongs to South Korea, but also contains the entire Korean

peninsula to conduct a research literature review on urbanization before the Independ-

ence of Korea. This research deals with urbanization and urban policies at the national

level, and the data will be collected at the city and county level. Time series analysis

will be used for analyzing the collected data, and its interpretation will be made at the

national and regional level.

2) Research Methodology

This research focuses on applying the World Bank’s urbanization hypothesis

to urbanization and urban policy experience in Korea. Studying the validity of the

World Bank’s hypothesis itself is not a part of this research. The analysis of urban

policies in Korea will be based on the World Bank’s urbanization hypothesis, and

urbanization indicators will be used to diagnose urbanization processes throughout

Korea urban planning history. Korea’s urban policies in the urbanization process will

be conducted through a research literature review, and the data collected at the city

and county level in a time sequence will be used to construct the database in order to

diagnose the urbanization process. Moran’s Index analysis will be used to interpret the

urban transformations in Korea.

3. Brief Review of Precedent Research

The World Bank report of ‘Reshaping Economic Geography’ has a direct in-


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fluence on this research. The report explains the phenomenon in which market force is

shown in a geospatial manner by providing three components - Density, Distance, and

Division. Using market force, the report mentions that developing countries as well as

the community of nations can find out the direction of spatial policies as solutions for

urban poverty and underdevelopment in underdeveloped countries. Part one in this re-

port discusses geographic transformation influenced by economic activities in terms of

density, distance, and division. Part two explains in an analytic manner that these spa-

tial transformations are led by agglomeration, migration, and specialization influenced

by market forces. Part three shows that institution, infrastructure, and intervention are

required to implement urbanization, regional integration, and nationwide development based on each spatial hierarchy - local, national, and world.

This research also uses many existing studies on urbanization and urban poli-

cies. These studies are categorized into two kinds - studies before and after Korean

independence. Professor Sohn’s studies made in 1982 and 1996 are used for studying

urbanization and urban policies before Korea’s independence and provide a systematic

approach for explaining social change during the Korea’s opening-port period and

colonial period. For studying urbanization and urban policies after Korea Independent period, ‘The 50 years of National Development in Korea’(1996) and ‘The 60 years

of National Development in Korea’(2008) by KRIHS are used. These reports serve

as basic reading materials for understanding research achievements and outcomes in

urban, land use, housing, and transportation policies throughout urban development

history in Korea.

4. Flow of Research

The research flow diagram is shown in Figure 1. Chapter 2 mentions that the ur-

banization strategies developed by considering spatial characteristics of economic growth

should be used as the urbanization hypothesis of developing countries and discusses the

contents of the hypothesis in detail. Chapter 2 also explains challenges in response to the

incipient, intermediate, and advanced phases of urbanization based on existing World

Bank reports. Finally, urban policy fields to analyze and urbanization indicators will be

determined as a basic framework for analyzing the urbanization process in Korea.


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Figure 1. Research Flow Diagram


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22 > Urbanization and Urban Policies in Korea22 >

Chapter 3 divides urbanization process of Korea into three phases - incipi-

ent, intermediate, and advanced urbanization - and explains their characteristics. In

this research, urban policy fields to which the World Bank’s urbanization hypothesis

can be applied will consist of ‘Urban Planning and Land Management’, ‘Housing

Supply Policies’, ‘Transportation Policies’, and ‘Deteriorated Residential Policies in

Low-income Neighborhoods’ in Korea. Chapter 4 deals with diagnosis of urbanization

transformations during the intermediate and advanced urbanization phases by using

eight indicators selected among the World Bank’s urbanization indicators and time-

sequence data for each selected indicator. Finally, Chapter 5 concludes this research

and suggests further research areas.


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CHAPTER2 THEORETICAL AND ANALYTIC FRAMEWORK 23 < 23<

1. Economic Growth and Urbanization Strategies

1) Basic Assumptions

In order to support implementation of urbanization policies suitable for eco-

nomic growth principles, the World Bank developed the urbanization hypothesis as anew approach toward solving urbanization issues in developing countries. As theoreti-

cal premises for forming the hypothesis, the World Bank provides three spatial traits

of economic growth. The first trait is that economic growth should not let any areas

suffer from difficulties such as poverty or deterioration even though this “does not

always bring about the prosperity of the entire areas.” Based on this aspects, “good

policies help achieve both concentration of economic activities on urban areas and

improvement of quality of life.” Second, economic growth should lead to comprehen-sive growth throughout the country even if a government allows imbalanced economic

growth for specific areas.” Also, comprehensive growth can be achieved by economic

integration of both underdeveloped and developed areas at the regional level. Finally,

“economic integration can be made by agglomeration, migration, and specialization

- that is, “market force”. Therefore, “any policies should not act against the market,

and economic growth and sustainability can be determined according to coordination

THEORETICAL AND ANALYTIC FRAMEWORK

Chapter 2 discusses theoretical backgrounds and contents of the World Bank’surbanization hypothesis and urbanization indicators. Based on the urbanizationhypothesis, Chapter 2 develops a basic framework for analyzing urban policieswhich have been implemented in Korea and determines indicators for diagnosisof the urbanization process.

2


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between market and government.” 1 Thus, the World Bank’s urbanization hypothesis

assumes that every citizen including those in the low-income class and the entire areas

including deteriorated areas, can attain the goal of economic growth through good poli-

cies and coordination between market and government.

2) Urbanization Hypothesis

The World Bank’s urbanization hypothesis can be defined as a sequential and

cumulative response of three policy instruments, which are institution, infrastructure,

and intervention to three spatial traits of economic growth - density, distance, and

division. For one-dimensional problems, the policy instrument in response to densitydifferentiation should be institution which can be applied regardless of spatial differ-

entiation. In the case of a two-dimensional challenge including density and distance,

the policy instrument of infrastructure should be added to that of institution. Because

rapid urbanization produces excessively overcrowded areas and threatens agglomera-

tion economics, investment in transportation infrastructure maximizes the advantages

of density by creating high-density and highly-connected areas. For three-dimensional

predicaments including division, intervention should be added to the other two policyinstruments. Using intervention, governments can find solutions to the separation of

deteriorated areas from other urban areas.

1 World Bank. 2009: pp. 20-21

Table 1. An “I for a D”: A Rule of Thumb for Calibrating the Policy Response

Complexity ofchallenge

UrbanizationPhase

Institution:Spatially blind

Infrastructure: Spatially con-

nective

Intervention: Spatially targeted

One-dimensionalproblem

IncipientUrbanization ●

Two-dimensionalchallenge

IntermediateUrbanization

● ●

Three-dimensionalpredicament

AdvancedUrbanization ● ● ●

The World Bank(2009)


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CHAPTER2 THEORETICAL AND ANALYTIC FRAMEWORK 25 <

“Governments can facilitate the spatial transformations that lie behind these

changes. Depending on the stage of urbanization, sequencing and priority-setting re-

quire paying attention to different aspects of the geographic transformation.” 2 ‘Institu-

tion’ is a policy instrument which should be implemented first and is applicable to any

urban areas or policy issues. Infrastructure policies should be put in the right place in

a timely manner. Intervention should be used least and last. These outlined principles

determine policy priority-setting for different phases of urbanization and also serve as

urbanization strategies.

2. Urban Policy Features in Different Urbanization Phases3

1) Incipient Urbanization

In the incipient urbanization phase, most areas are still rural, and policies

should be neutral. Urban planning and land use policies should be universal enough to

apply to any areas. Good land use policies are important and should be policies to offer

everyone basic services such as security, education, welfare, and sanitation.

2) Intermediate Urbanization

In this phase, urbanization becomes accelerated, and the benefits of rising

economic density are widely shared by connective infrastructure. Industrialization

changes land use patterns, concentrates economic activities on specific urban areas,

and moves goods and services around quickly.

Land use regulations become influential factors in determining location deci-

sions, so ‘institution’ is still a first-priority among other policy instruments. Spatially

blind social services should be continuously required as part of rural-urban integration.

People are pulled to cities by agglomeration economies, not pushed out by the lack

of schools, health services, and public security in rural areas. However, even if these

services are provided, transportation costs can rise quickly because of growing conges-

2 Ibid. p. 25

3 The World Bank report (2009: 25-27) is used to explain this section.


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tion, affecting the location choices of entrepreneurs. In this phase, central governments

should offer connective infrastructure so that prosperity is widely shared and help co-

ordinate infrastructure investments by widening administrative territories.

3) Advanced Urbanization

In the highly-urbanized areas, slum problems have a priority, so intervention

along with institution and infrastructure may be inevitable in the advanced urbaniza-

tion phase. People generally decide where to live by considering where they can have

easy access to high-quality basic services and learning where such places are. How-

ever, if there are slums among livable neighborhoods, urban economies cannot reachthem. Generally, slum-improvement programs do not have a priority at the earlier

phases, but they become important in this urbanization phase. Considering implica-

tions from slum-improvement programs, it is not enough for governments to apply

‘targeted’ intervention policies to specific urban areas. For fundamental solutions, if

infrastructure and institution related to land use or basic services are not implemented

properly, ‘targeted’ intervention may not have any positive effects.

4) Summary

The dimension policy challenges turn one dimension into three dimensions

as urbanization progresses. For each urbanization phase, three policy instruments - in-

stitution, infrastructure, and intervention - should be considered when implementing

urban policies through coordination between the central government and local mu-

nicipalities at the national, regional, and city level. Considering urbanization policy

experience so far, institution should come first as a policy instrument applicable to any

areas, and infrastructure investment should be put in the second place. Finally, ‘target-

ed intervention’ should be applied to specific areas only when the other two policy in-

struments cannot solve complex urban policy challenges. Even when intervention has

a priority, an effort to improve institution and infrastructure should be used together.


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3. Classifying Urban Policy Areas and Diagnostic Indicators

1) Classifying Urban Policy AreasThe World Bank defines three policy areas and has developed urbanization

indicators for each area. The World Bank categorizes three policy areas which imple-

ment policy instruments (Institution, Infrastructure, and Intervention) in response to

each urbanization phase mentioned above: Urban Planning and Management, Urban

Connectivity, and Urban Livability.

First, ‘Urban Planning and Management’ is defined as institutions which af-

fect land use policies or patterns within urbanized or urbanizing areas. It encouragesthe land use transformation of rural areas into urban areas and reflects market demands

for urban lands. It also includes policies for ensuring basic infrastructures such as wa-

ter supply, public health, and electricity. Second, ‘Urban Connectivity’ means building

connective infrastructure such as transportation and telecommunication. It also pro-

motes communication among cities and specializations by reducing transaction costs.

Finally, ‘Urban Livability’ is defined as interventions whose purpose is to improve

livability in deteriorated areas separated from other urbanized or urbanizing areas.In this study, the World Bank’s policy areas should be slightly adjusted con-

sidering the urban policies and planning experience in Korea. This study divides the

‘Urban Planning and Management’ area into two policy subareas - ‘Urban Planning

and Land Management’ and ‘Housing Supply Policy’. In the ‘Urban Connectivity’

area, transportation policies which encourage the making of connections among cit-

ies should be analyzed. Finally, ‘Low-income Neighborhood Districts in Metropolitan

Area’ should be studied for interpreting ‘Urban Livability’ in Korea.

2) Diagnostic Urbanization Indicators

(1) World Bank’s Urbanization Indicators

As shown in Table 2, the World Bank’s urbanization indicators consist of

four policy areas - ‘Urban Portfolio’, ‘Urban Planning and Management’, ‘Urban Con-

nectivity’, ‘Urban Livability’ - which consider the three policy instruments of ‘Institu-


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tion’, ‘Infrastructure’, and ‘Intervention’ as well as ‘Urbanization Progress’. The four

urbanization indicators can be used as analytic tools for policy bottlenecks in detail

while benchmarking urbanization outcomes at the national, regional, and city level.

Each urbanization indicators has several analytic items. The analytic items re-

lated to ‘Urban Portfolio’ are grouped into two sections - urbanization progress and ur-

ban economy. The urbanization progress section consists of nine detailed items - three

‘Extent of Urbanization’, five ‘Functions of cities’, and one ‘Where do poor people

live’. Urban economy includes four ‘Productivity’ and one ‘Employment Composi-

tion’. These items focus on showing urban transformation and, in some cases, prove

how an urban economy in certain cities is composed.Second, ‘Urban Planning and Management’ serves as a core part of the urban-

ization indicator and focuses on analyzing whether basic infrastructures 4 and services

are well provided to support land use within urban areas. This indicator consists of

‘Land Use and Transformation’ and ‘Infrastructure’ sections. The ‘Land Use Transfor-

mation’ section includes eleven analytic items - eight ‘Rural-Urban Transformations’

and three ‘Urban Form and Efficiency’ items. The ‘Infrastructure’ section is compro-

mised of ten analytic items - two ‘Accessibility’, six ‘Financing’, and two ‘Example ofWater Provision’ analytic items.

Third, ‘Urban Connectivity’ diagnoses the extent of connectivity among rural

areas as well as urban areas. This indicator includes ‘Connecting the Urban Portfolio’

and ‘Connecting the City’. The ‘Connecting the Urban Portfolio’ section consists of

eight analytic items, which measure the scale and cost of the mutual interaction be-

tween cities - three ‘Scale of Interaction’ and five ‘Costs of Interaction’. The ‘Connect-

ing the City’ section deals with congestion, productivity of infrastructure, transporta-

tion costs, and environmental impact and has twelve analytic items: five ‘Efficiency’,

two ‘Cost and Affordability’, and three ‘Sustainability’, and two ‘Institutions’.

Finally, ‘Urban Livability’ helps explain whether slums result from the rapid

influx of population caused by urban economic growth or rigidity of government poli-

4 When basic infrastructures or services have poor accessibility, urbanization policies will dependupon whether poor accessibility derives from poor funding support or insuf cient administrativecapability.


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cies for land market. 5 This indicator has four analytic items - one ‘Extent of Slums’,

and three ‘Slum Formation’.

The World Bank has developed 7 departments, 18 sections, and 59 indicators

in response to four policy areas - ‘Urban Portfolio’, ‘Urban Planning and Manage-

ment’, ‘Urban Connectivity’, and ‘Urban Livability’

5 According to the World Bank, a rapid in ux of population into urban areas means that there area lot of people looking for housing and basic services. If urbanization proceeds properly, peoplewill overcome poverty. This will be a good indication of urbanization and policies because a largerpopulation and urban economic growth naturally result in a good indicator. If slums result from arigidity of policies for the land market, this may mean that poor people stay in cities for a long term.This can be recognized in old slums. However, the World Bank insists that it is policy failures ratherthan ‘market forces’ that lead to urbanization.

Table 2. Urbanization Indicators by World Bank (4 Policy Areas, 7 Departments, 18 Sections,and 59 Indicators)

Policy Area Department Sections and Indicators

Urban Portfolio (14)

Extent of Urbanization (9)

Extent of Urbanization(3)

Functions of Cities(5)

Where do Poor People Live(1)

Urban Economy (5)Productivity(4)

Employment Composition(1)

Urban Planning and Man-agement (21)

Land Use and Transformation(11)Rural-Urban Transformation(3)

Urban Form and Efciency(8)

Infrastructure (10)

Accessibility(2)

Financing(6)

Example of Water Provision(2)

Urban Connectivity (20)

Connecting the Urban Portfolio(8)Scale of Interaction(3)

Cost of Interaction(5)

Connecting the City (12)

Efciency(5)

Costs and Affordability(2)

Sustainability(3)

Institutions(2)

Urban Livability (4) Livability (4)Extent of Slums(1)

Slum Formation(3)


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(2) De ning Diagnostic Urbanization Indicators of Korea

Method

In order to select indicators suitable for diagnosing the urbanization process

in Korea, this study singles out the World Bank’s indicators which make it easy to get

annual statistic data at the city and regional level. Also, this study divides the World

Bank’s four policy areas into seven detailed policy departments and suggests more

than one indicator for each policy department. However, in the case of indicators relat-

ed to slums as of the year 2000, there are no residential areas exactly defined as ‘slums’

in Korea, and Korea does not have any annual statistic data related to slums. Therefore,

the ‘slums’ indicators will be excluded when selecting diagnostic indicators.

Although the World Bank does not include then, this study will include indica-

tors related to ‘housing supply policies’ which have been considered important through-

out urban planning and policy history of Korea. Korea has focused on increasing the

number of residential units to solve housing shortages so far because the Korean gov-

ernment has thought that maintaining the optimal housing supply ratio means providing

people with opportunities to purchase or rent their houses without any barriers.

Results

Using the methodology mentioned above, three policy areas, six departments,

and eight sections are suggested. To diagnose the urbanization process in Korean cities,

eight final indicators are drawn for each section. This means that this study will consider

one new indicator for interpreting the urbanization process in Korean cities while includ-

ing seven indicators picked up among the World Bank’s urbanization indicators.

On the other hand, the spatial scope and temporal characteristic of the data

survey for analyzing the indicators and interpreting urbanization in Korea can be sum-

marized as follows: First, this study will construct a database for analysis of the spatial

transformation within urban areas in Korea by using time-series statistic data at the city

and county level. Second, the data range in this study is statistical data available from

1960 or 1970 to 2010. However, for employment data, this study will take 1960, 1981,

and 2005 employment data into consideration for a comparative analysis of employ-

ment data.


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Table 3. Selected Indicators for Diagnosing Urbanization Process in Korea

Policy Area Department Section Code Indicator Survey

Unit

Time-

seriesData

Urban Portfolio(14)

Extent ofUrbanization

Extent ofUrbanization W-1 Urbanization Ratio

City/County ’60-’05

Functions ofCities W-2

City Size Distribu-tion


UrbanEconomy

EmploymentComposition W-3

Employment withinurban areas

City/County ’60,’85,’05

Urban Planningand Management(21)

Land Use

Rural-urban

Transforma-tion

W-4Urban Land UseTransformation


Infrastructure

Accessibility K-1 Housing SupplyRatioCity/County ’70-’05

Example ofWater Provi-sion

W-5 Water Supply Ratio City/County ’70-’05

Urban Livability(4)

Connectingthe UrbanPortfolio

Connectingthe UrbanPortfolio

W-6 Distance to NearHighwayCity/County ’70-’10

Connectingthe City Efciency W-7Number of Regis-tered Vehicles perRoad Area Unit


‘W’ - Indicators selected among World Bank’s urbanization indicators ‘K’ - Indicators which are not included in the World Bank’s indicator list but have been considered

important throughout urbanization policies in Korea


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CHAPTER3 URBANIZATION POLICIES IN KOREA 33 <

1. Background of Urbanization Policies in Korea

1) Economic Growth and Infrastructure Investment 1

(1) Economic Growth

Korea has achieved high economic growth enough to attract great deal of

interest from the rest of the world since the 1960s. Korea was so poor until the 1950s

that people had a lot of trouble having one meal a day. In 1962, the Gross National

Income (GNI) of Korea was only 76 dollars, and the total amount of national exports

was 55 million dollars. 2

The Korean government established the first National Economic Develop-

ment Plan to attain quantity expansion of economic scales and high growth. Due to

the nationwide plan, Korea began to make great economic progress enough to achievean average rate of economic growth of 22.6 percent in the late 1960s. High economic

growth continued from the 1960s up to the 2000s, and Korea became a country with

the 15th largest GDP and the 54th biggest per capita income in the world. Also, Korea

1 For statistical data, ‘Statistics Korea’ homepage (http://kostat.go.kr) and the report ‘60 years of KoreaIndependence by Number’ published by the Korea Bank are used.

2 Seongsoo Kim. 1995. Development of Korea Economy for the era of globalization.

URBANIZATION POLICIES IN KOREA

Chapter 3 examines the urbanization policies of Korea corresponding to theWorld Bank’s urbanization hypothesis. The results will be used to review thevalidity of the hypothesis. Urbanization policies in Korea will be analyzed onthe basis of the four policy areas suggested in the previous chapter for eachurbanization phase.

3


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joined the Organization for Economic Cooperation and Development (OECD) in 1996

and hosted the G20 Summit in 2010.

In Figures 2 and 3, increase in Korea’s GDP and changes in the economic

structure show high growth for the past 50 years. As of 2009, the nominal GDP of

Korea was 830 billion dollars which is 420 times larger than the GDP in 1960. Also,

the nominal GNI per capita in 2009 was $17,175 which is approximately 220 times

more than that in 1960.

Considering the nominal amount, industrial structure has greatly changed

from 36.8% of agriculture and fishery, 15.9% of manufacturing industries, and 43.25%

of service industries to 2.6%, 28.0%, and 60.7% respectively, which indicates a radi-cal transformation from an agricultural country to an industrial country. Also, while

industrial structure moved from primary into secondary industries, tertiary (service)

industries have been developed at a steady pace. In particular, as shown in Figure 4, the

Figure 2. Nominal GDP (billion $) (60-09) Figure 3. Nominal GNI per Capita ($)

Figure 4. Distribution of Industrial Output Value (NominalAmount, %)


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knowledge industry (the quaternary industry) was rapidly developed among service

industries. Since the 1990s, the roles of consulting companies such as service market-ing and design have been greatly emphasized, and various kinds of personal service

industries have greatly developed to meet consumer’s diverse demands.

(2) Extensive Infrastructure Investment

Basic Service Infrastructure

During the last five decades, Korea has made a lot of effort to provide the

major infrastructures such as electricity, housing, water supply, school, and welfare fa-

cilities. As shown in Figure 5, the total amount of electric power in 2009 was 422,355

GWh which was approximately 220 times more than the total amount in 1960. The

electric power consumption per capita was 7,922 Wh per person which shows an in-

crease of about 170 times over that in 1960.

According to Figure 7, the number of residential units in 1960 was about 3.6

million, but increased by over 4.7 times in 1990 to 17 million residential units. In the

1980s, Korea suffered from a housing shortage problem because of a very low housing

Table 4. Social Development Indicators: Economic Growth

Categories 1960 1970 1980 1990 2000 2004 2009

Population (Thousand) 25,012 32,241 38,214 42,869 47,008 48,294 48,747

Nominal GDP (Billion Dollar) 20 81 638 2,637 5,118 6,801 8,329

Nominal GNI per capita (Dollar) 79 254 1,645 6,147 10,841 14,162 17,175

IndustrialStructure(Nominal

Amount,%)

Agriculture/Fishery 36.8 29.2 16.2 8.9 4.9 3.7 2.6

Manufacture 15.9 19.6 26.4 28.1 29.8 29.1 28.0

Electricity/Gas/ WaterSupply/ Con-struction

4.1 5.5 10.2 13.4 11.0 11.7 8.7

Service 43.2 44.7 47.3 49.5 54.4 55.5 60.7

Korea Bank. 2005. The 60 Years of Korea Independence by Number and Statistics Korea Homepage(http://kostat.go.kr)


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supply ratio (71 to 73 percent). However, a lot of residential units have been provided

since 1990, and housing shortage problems have greatly lessened.

Figure 8 shows a change in the water supply rate from 1960 to 2008. In 1960, the estimated

population served by water supply was only 4.2 million, but increased to 46.7 million by 2008. This

means that water supply ratio greatly increases from 16.9% to 94.1% over 50 years. Figure 9 indicates

that the number of students increased from 3.6 million for elementary, 5 million for middle school, 2.6

million for high school, and 1 million for undergraduate and graduate in 1960 to 3.5 million, 2 million,

1.9 million, and 2.9 million in 2009 respectively. This means that the number of students pursuing

higher education and the number of higher education facilities greatly increased. For health service

facilities, Figure 6 indicates that as of 2007, the number of hospital beds was 450,000 which increased by over 40 times than the 10,000 beds available in 1960.

Figure 5. Total Electric Power (60-09) Figure 6. No. of Hospital Beds (65-07)

Figure 8. Water Supply (60-08)Figure 7. Housing Supply (62-09)


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Table 5. Social Development Indicator: Basic Service Infrastructure

Categories 1960 1970 1980 1990 2000 2004 2009

Population(Thousand) 25,012 32,241 38,214 42,869 47,008 48,294 48,747

Elec-trocityProduc-tion

Total Electric Power (GWh) 1,697 9,167 37,239 107,670 266,340 342,148 422,355

Elec. power consumption percapita (KWh) 46 240 859 2,202 5,067 6,491 7,922

4)

No. of Students(No. of Schools)

Elementary 3,621(4,602)5,749(5,961)

5,658(6,479)

4,869(6,335)

4,020(5,267)

4,116(5,541)

3,474(5,829)

Middle School529(1,053)

1,319(1,608)

2,472(2,103)

2,273(2,474)

1,861(2,731)

1,934(2,888)

2,007(3,106)

High School 264(635)590(889)

1,697(1,353)

2,284(1,683)

2,071(1,957)

1,747(2,080)

1,966(2,225)

University(Undergraduate/graduate)

98(52)

153(135)

437(206)

1,127(405)

1,895(990)

2,114(1,201)

2,911(1,314)

Hospital Beds 11,413 1) 16,538 65,041 134,176 287,040 356,778 450,119 5)

HousingNo. of Housing(Thousand) 3,624 2) 4,360 5,319 7,357 11,472 12,988 17,071

Housing Supply Ratio(%) 82.4 2) 78.2 71.2 72.4 96.2 102.2 101.2

Water Suply

Water supplypopulation(Thousands) 4,210 10,430 20,809 33,631 41,774 43,633

3) 46,733 4)

Water supply ratio(%) 16.9 33.2 54.6 78.5 87.1 89.4 3) 94.1 4)

Capability(Thousand tons/day) 517 2,166 6,756 16,274 26,980 28,462 3) 21691 5)

Water supply amounts percapital (ℓ/day)

99 158 256 369 380 359 3) 275.2 5)

1) statistic data in 1965, 2) statistic data in 1962, 3) 2003 statistic data, 4) 2008 statistic data, 5) statistic data as of 2007.Korea Bank. 2005. The 60 Years of Korea Independence by Number and Statistics Korea Homepage (http://kostat.go.kr)

Figure 9. The No. of Students (60-09) Figure 10. The No. of Education Facilities(60-09)


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Transportation and Communication Infrastructure

Transportation infrastructure growth can be seen through changes in the total

length of railroads, roads, and expressways from the 1960s to present as shown in Fig-

ures 11 and 12. The total length of railroads as of 2004 was 7,746 km which is about

1.7 times longer than that of railroads in 1960 - 4,584 km. The total road length in 2008

was about 100,000 km which is 4 times longer than that in 1960. In particular, many

expressways have been constructed, and the total length of expressways increased

from 550 km in 1970 to 3,500 in 2008 which is six times longer. This rapid expansion

of expressways is much bigger than the 2.5-time increase in the total length of roads

during the same period. Rapid expansion of roads and expressways is closely relatedto the increase in the number of vehicles. The number of vehicles as of 2009 is about

17 million, which is 560 times more than that in 1960 - 30,000 cars.

Table 6. Social Development Indicator: Transportation and Communication

Categories 1960 1970 1980 1990 2000 2004 2009

Population (Thousand) 25,012 32,241 38,214 42,869 47,008 48,294 48,747

Total railroadlength(km) 2) 4,584 5,500 6,007 6,435 6,706 7,746

RoadsTotal length(km) 27,169 40,244 46,951 56,715 88,775 100,278 104,236 1)

Expressways(km) - 551 1,225 1,551 2,131 2,923 3,447 1)

No. of Vehicles(Thousand) 30.8 126.5 527.7 3,394.8 12,059.2 14,934.1 17,325.2

Telephone

Subscribers(Thousand) 87 481 2,704 13,276 21,932 22,913 20,090

No. of telephones per 100persons 0.3 1.5 7.2 31.0 46.7 46.6 41.2

1) 2008 statistic data, 2) KTX(Korea Train Express) is not included.Korea Bank. 2005. 60 Years of Korea Independence by Number and Statistics Korea Homepage (http://kostat.go.kr)


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The spread of the telephone as a communication infrastructure can be un-

derstood by the number of telephone subscribers shown in Figure 13. The number of

telephone subscribers increased by 263 times between 1960 and 2004 - from 90,000

in 1960 to 22.9 million in 2004. However, the number of land line telephone subscrib-

ers is currently decreasing because personal cellular phones have come into wide use

recently as a result of the rapid development of new communication technology.

2) Urbanization

(1) Periodization of urbanization process in Korea

Along with modernization, urbanization in Korea first emerged after the 1876

Figure 11. The Length of Roads and Rail-roads (60-08)

Figure 12. The No. of Vehicles (Thou-sand/60-09)

Figure 13. The Number of Telephone Subscribers and TelephoneSupply Rate (60-09)


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opening of Korean ports. Going through the chaotic time in the 1950s, urbanization in

Korea began to be accelerated by industrialization and economic growth starting in the

1960s and entering a stable phase beginning in the 2000s as shown in Figure 14.

Urbanization in Korea began to accelerate in the 1960s when Korea straight-

ened out the social chaos caused by the liberation of Korea from Japanese colonial

rule and the Korean War. Therefore, the year 1960 when the rate of urbanization was

35.8% can be used as a criterion for classifying incipient and intermediate urbaniza-

tion phases. Unlike the intermediate phase, structural and qualitative transformation of

urbanization can be seen in the advanced urbanization phase. For this reason, it may be

possible to distinguish the intermediate urbanization phase from the advanced urbani-zation phase on the basis of the year 1990 because population growth of satellite cities

became evident at that time. 3 This also reflects radical social and political changes in

Korea both before and after 1990. 4

(2) Incipient Urbanization

3 The urbanization rate in 1990 was 82.6%.

4 This includes social and political changes caused by democratization through civil revolutions inKorea in 1987 and creation of a local self-government system in 1992.

Figure 14. Urbanization Rate of Korea (1920~2005) Statistics Korea,Census


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It was in the 1920s that urbanization 5 first emerged in Korea. 67 The urbani-

zation rate in 1920 was 4.86%, but it gradually increased up to 23.8% in 1944 which

was only 25 years later. 8 Twelve ‘Bu’ (cities) and twenty-four ‘Myeon’ (towns) were

newly built through the 1914 local governance system reform. Also, in the 1930s, the

number of ‘Bu’ increased up to fourteen and the number of ‘Myeon’ reached up to 41

(Jeongmok Sohn. 1996: pp. 264-277).

It was estimated that the urbanization rate of South Korea at the time of the

1945 Korean Independence was approximately 23%. In the late 1940s, 700,000 Japa-

nese people went back to their country, 1.2 million of Korean people living in foreign

countries came back to Korea, and 480,000 people from North Korea moved down toSouth Korea. Considering this evidence, the estimated urbanization rate was at least

5 After the opening of a port, there were a lot of driving factors for urbanization in Korea - for in-stance, opening ports, implementing the settlement regime, foreign migrant settlement, and build-ing new infrastructures such as railroads, electricity, and trams. However, the reasons why urbani-zation did not occur for a long term are summarized as follows: First, social and political chaosbroke out frequently. Second, cholera spread in urban areas. Third, disputes with other foreign

countries caused by strong national isolation policies of the Chosun Dynasty and numerous con-icts with foreigners made people leave the city. Therefore, concentration of population on urbanareas did not happen in Korea cities (Jeongmok Sohn. 1982: p. 387).

6 In the 1920s, concentration of urban population took place regardless of employment demandswithin urban areas. After a land survey by the Japanese government, agriculture immigration ofJapanese through the Korea Oriental Colonization Company and dispossession of lands by Japa-nese and Chosun landlords forced farmers to leave rural areas. Farmers who lost their lands gen-erally moved to Manchuria, Siberia, Japan, or urban areas in Korea. In the 1930s, the Japanesecolonial government permitted the building of manufacturing plants in Korea to produce militarysupplies. In particular, after the Sino-Japanese War, a lot of Japanese manufacturing companiesbuilt their factories in Korea in order for the Japanese colonial government to take advantage of

the Chosun peninsula as a large armament depot. They purchased labor force at a cheap priceto produce war supplies. Consequently, the urban population rapidly increased and led to arti cialurbanization of Korea (Ibid. p. 272).

7 For example, the total population in Seoul between 1669 and 1864 was 180,000 to 200,000, andit did not make a big difference. However, after opening ports, urban population rapidly increased.46 years later, the population of Seoul was 280,000 in 1910. The population of Seoul increased upto 380,00 in 1933 which was 23 years later (Ibid. p. 204).

8 The urbanization rates are based on a 1920 temporary census and national censuses conductedevery ve years. According to the census results, there was a decrease in the urbanization ratebetween 1942 and 1944 because a lot of young people were drafted to war during that period (Ibidpp. 290-294).


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over 28.7% in the late 1940s. 9 Also, in the late 1950s after the Korean War, a lot of

social and political chaos frequently broke out and led to a high concentration of population in

urban areas. 10 As a result, the urbanization rate in 1960 rapidly increased to 36.8%.

(3) Intermediate Urbanization

In the intermediate urbanization phase between 1960 and 1990, rapid urban-

ization process took place in Korea. The 35.8% urbanization rate in 1960 reached

82.6% in 1990, a 47.6% increase. This means that, since 1960, there has been an aver-

age 15.6% increase in the urbanization rate every ten years. The urban population in

1960 was 9.2 million, but grew to 35.9 million, meaning that three times the urban

population in 1960 lived in cities in 1990 and about 900,000 people moved to cities

every year during this period.

Also, in this urbanization phase, People generally lived in metropolitan cit-

ies with a population of over one million. During this period, about 60% of the urban

population in Korea was concentrated in large cities. The proportion of the urban popu-

lation living in cities with less than 50,000 people gradually decreased, and cities with

populations between 50,000 and 200,000 have continued to decrease since 1970. Also,

concentration of urban population on satellite cities around the capital of Korea be-

came intensified. While the proportion of urban population living in the capital region

was 20.8% in 1960, the proportion in 1990 was 42.8%.

(4) Advanced Urbanization

The urbanization rate has remained stable since the late 1990s at about 90%.

Between 1990 and 2000, it increased from 82.6% to 93.9%, and remained almost un-

changed at 95.7% as of 2005. However, a concentration of the urban population in the

capital region has lasted since the 1990s, and the proportion of urban population living

in the capital region increased from 42.8% in 1990, to 46.2% in 2000 to 48.1% in 2005.

Change in the urbanization rate is shown in Table 7.

After the 1990s, a few metropolitan regions were formed by a transformation of

9 Korea Institute for Human Settlement (KRIHS). 1996: p. 348.

10 Ibid. p. 349.


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Table 7. Change of Urbanization Rate (1960 ~ 2005)

Categories 1960 1970 1980 1990 2000 2005

National population(Thousand) 24,989 31,435 37,407 43,390 45,895 47,041

Urban Population(Thousand) 1) 9,198 15,510 26,107 35,873 43,307 45,240

Urbanization Rate 36.8% 50.2% 69.7% 82.6% 93.9% 95.7%

% of population in the capital region 20.79% 28.24% 35.50% 42.81% 46.2% 48.1%

Citiesby popul-ation size

1 million above 39.2% 53.8% 54.4% 57.6% 51.4% 51.5%

500,000~1 million 7.4% 4.1% 5.3% 8.5% 15.6% 15.3%

200,000~500,000 10.3% 7.5% 12.8% 12.4% 17.0% 18.9%

50,000~200,000 20.0% 20.4% 14.0% 11.3% 11.0% 9.9%

20,000~50,000 19.6% 13.5% 9.3% 6.4% 2.5% 2.2%

less than 20,000 3.5% 0.8% 4.2% 3.8% 2.5% 2.3%

1) The total urban population living in both cities and towns in terms of administrative districts (StatisticsKorea, Census).

their urbanization patterns, and the proportion of the cities’ urban population size has had a

tendency to change. While the percentage of Korean cities with a population of over one mil-

lion is gradually decreasing, the percentage of cities with a population between 200,000 and

one million has been steadily increasing or remaining stable recently.

As shown in Table 8, while the population of the six metropolitan regions

has been increasing since 1990, the population of the core cities in the regions in fact

has been tending to decrease. For instance, the population of Seoul in the capital met-ropolitan region has been decreasing since 1990; the population of Busan has been

decreasing since 1995; Daegu has been decreasing since 2000. This shows that the

transformation of urbanization structure seems to be making some of the core city

population relocate to neighboring cities with populations between 200,000 and one

million. Thus, Korean cities in the middle of the advanced urbanization phase are ex-

periencing a positive and structural transformation of urbanization.


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Table 8. Population Change of Metropolitan Areas Since 1990

Categories 1990 1995 2000 2005

Capital Region 18,586,128 20,189,146 21,354,490 22,766,850

Seoul 10,612,577 10,231,217 9,895,217 9,820,171

% of population of a core city 57% 51% 46% 43%

Busan Metropolitan Region 5,762,698 6,250,408 6,280,625 6,301,528

Busan 3,798,113 3,814,325 3,662,884 3,523,582


Daegu Metropolitan Region 2,625,916 2,979,767 3,081,352 3,054,561

Daegu 2,229,040 2,449,420 2,480,578 2,464,547


Daejeon Metropolitan Region 1,790,636 1,988,114 2,073,632 2,108,080

Daejeon 1,049,578 1,272,121 1,368,207 1,442,856


Kwangju Metropolitan Region 1,479,790 1,590,868 1,670,084 1,694,667

Kwangju 1,139,003 1,257,636 1,352,797 1,417,716


Capital Region: Seoul, Incheon, Kyounggi ProvinceBusan Metropolitan Region: Busan, Ulsan, Changwon, Masan, Jinhae, Kimhae, YangsanDaegu Metropolitan Region: Daegu, Youngcheon, Kyoungsan, Kunwi, Cheongdo, Koryeong, Seongju,ChilgokDaejeon Metropolitan Region: Daejeon, Kongju, Nonsan, Kyeryong, Keumsan, Yeongi, Cheongwon,Boeun, Okcheon, Youngdong

Kwangju Metropolitan Region: Kwangju, Naju, Damyang, Hwasoon, Hampyeong, JangseongKorea Bank. 2005. 60 Years of Korea Independence by Number and Statistics Korea Homepage (http://kostat.go.kr)


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3) Economic and National Development Policies

(1) Economic Development Policy

From the 1960s to the mid 1990s, Korea systematically implemented eco-

nomic development by taking a comprehensive approach to establishing economic

policies in Korean economic development plans. As a five-year economic strategic

plan including national economic policies, the Economic Development Plan set a goal

and developed implementing plans to utilize all available resources.

As shown in Table 9, economic development policies in Korea were implemented

by establishing four five-year national economic development plans from 1962 to 1981. In

1982, the plan was established under the name of the ‘Economic and Social Development

Plan’ and served as a plan to stimulate the market economy in Korea. Two Economic and

Social Development Plans were developed from 1982 to 1986. However, in 1993 when the

7th five-year Economic and Social Development Plan (1992 ~ 1996) was in progress, the

Korean government recognized that it was not reasonable to implement the plan to supple-

ment Korean market economy. Based on this recognition, no economic development plans

were implemented after the New Economic Plan was established.

The economic development plans had both positive and negative impacts on

high economic growth in Korea. 11 As for the positive impacts, the plans provided

clear directions for economic development and a strong basis for focusing all national

efforts on boosting business and industry throughout the country. Also, by suggesting

both short-term and long-term economic development frameworks, the plan removed

uncertainty from the market economy in Korea and encouraged investment activities

of private companies. Finally, economy-invigorating policies suggested in the plan

served as a strong basis for forming various new markets.

The economic development plans also had negative effects on Korean econ-

omy. First, the plans made economic actors dependent on the government and slowed

down the growth of the Korean economy. Second, the plans’ use of price controls

caused market distortions and inefficient economic growth because they put too much

emphasis on achieving a quantitative goal for economic growth.

11 Jeongha Kang.1997.


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Table 9. Characteristics of the Economic Development Plans in Korea

Categories Time Period Goal Basic Strategies Planning Outcomes

The 1st Five-year EconomicDevelopmentPlan

1962~1966•Achieving independenteconomy•Infrastructure Development

•Ensuring energy resources•Improving agricultural pro -ductivity•Developing key industries•Absence of promoting indus -trialization

•1964: Revised the Plan(downgrading goals)•Intensive efforts by the govern -ment

The 2nd Five-year EconomicDevelopmentPlan

1967~1971

•Modernizing industrialstructure•Establishing independenteconomy

•Self-support of food•Construction of advancedindustry basis•Exporting hundred-thousand-dollar products

•Relative successful plan devel -opment and implementation•Improving institutions foreconomic growth

The 3rd Five-year EconomicDevelopmentPlan

1972~1976

•Innovative development of ag -riculture and shery economy•Increasing exports/Encouraging heavy andchemical industry

•3.5 billion-dollar export•Constructing heavy andchemical factories•Creating industrial districts•Distribution of industries andlabors

•Intensive Financial support forpromoting heavy and chemicalindustries•Industrial advancement (faileddue to the oil crisis)•Changing policies frequentlyunder emergent situations

The 4th Five-year EconomicDevelopmentPlan

1977~1981•Development of self-support -ing growth structure

•Social development for equity

•Raising investment fundsthrough it own efforts•Advancement of industrialStructure

•The 2nd oil crisis(1979):shrinking light industry export

•The plan failed

The 5th Five-year EconomicDevelopmentPlan

1982~1986

•Maturing market functionsLib -eralization•Social development

•Constructing stable economicbases•Strengthening competitiveness•Boosting jobs and incomesBalanced development

•Including improvement ofurban poverty for sustainableeconomic growth•Separating private eco -nomic activities from roles ofgovernment-led plans•Price stabilization

The 6th Five-

year EconomicDevelopmentPlan

1987~1991

•Forming advanced economy

based on efciency and envi -ronment•Public Welfare

•Advancement of institutionsand order

•Industrial structure reform•Balanced development•Improving citizen’s quality oflife

•Improving fair trade system•Established Korea Customer

Agency•National pension•Promoting women develop -ment

Five-year NewEconomyPlan

1993~1997•Constructing economy bypublic participation and mutualconsent

•Reform of market economy•Removing bas economiccustoms or practices


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(2) National Land Development Policies

Apart from the Economic Development Plans, Korea has established the Land

Development Plan for specific areas since the 1960s. In 1972, along with the third five-year

Economic Development Plan, Korea established the first National Territory Comprehen-

sive Plan for the next ten years. The first plan focused on developing ‘policies and strate-

gies’ for the construction of large-scale industrial bases and the improvement of transpor-

tation, communication, water supply, and energy supply systems. However, the first plan

adopted growth pole development strategies and caused development bi-polarization along

the Kyoungbu expressway which runs from Seoul to Busan (Republic of Korea, 2000: p.

4).Since the 1980s, the National Territory Comprehensive Plan has concentrated

on reorganizing the spatial structure of national land and forming local economic blocs or

wider life blocs. The second National Territory Comprehensive Plan (1982-1991) focused

on “forming poly-nuclei territories and daily life regions” to encourage population settle-

ment in local areas to improve the quality of life. The plan prevented excessive growth of

the Seoul and Busan metropolitan areas in order to foster regional growth centers. How-

ever, the second plan did not have sufficient implementation means and caused spatialstructure imbalance.

Setting a goal of decentralized spatial structure, the third National Territory

Comprehensive Plan (1992-2001) established development strategies such as controlling

growth of the capital region and fostering local regions, constructing new industrial dis-

tricts and comprehensive express network systems, and increasing investment in quality

of life and environment. The plan also adopted multi-core and daily life regional develop-

ments as part of its spatial development strategies. However, it did not reflect any strategies

for globalization, liberalization, or localization. Unlike the former three ten-year plans, the

fourth National Territory Comprehensive Plan (2000-2020) suggested 20-year develop-

ment strategies. The revised 2005 plan suggested building up independent local region

bases and networking infrastructures. In addition, it included construction of three national

development axes and interconnected multi-core spatial structures. 12

12 Republic of Korea (ROK) Government. 2005: p. 36


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Documents

Urbanization and Urban Policies in Korea