Trust matters in national affairs

By Lee Byoung-ki

During the December presidential election, President Park Geun-hye remarkably underlined the concept of social trust and principles. Park said, ``The last door that Korea should open to reach developed nation status is accumulating social capital, and a different word for social capital is trust.’’

Confucius said in his Analects that it was impossible for politicians to exercise their administrative functions without people trusting them. In all ages, it is never too much to emphasize the importance of trust when conducting national affairs.

In a distrustful society, the efficacy of a certain government policy noticeably wears off if members of society never believe in it.

Thus, in the long run, the pace of economic development accelerates in countries with a high trust level.

Unfortunately, several eminent scholars such as Francis Fukuyama point to Korea as a low-trust country.

If the trust level of a nation is low, transaction costs may be high, slowing economic activity and the growth rate.

On the other hand, if a country has a high trust level, government policy may be performed effectively, and related businesses should grow fast as financial transactions and venture capital investments are enhanced.

Well-known welfare state Nordic nations are not only famous for their developed wealth based on originality and economic freedom but also for their high trust level. The people of Northern Europe trust their system as much as themselves.

They believe in the three branches of government, the legislature, the judiciary and the administration, and the level of trust increases as the education level rises. Thus, the efficacy of any policy in this region is excellent due to the people’s trust in it.

How is it in the Republic of Korea? Generally the trust level in Korea is lower than the OECD average, and Koreans’ trust in the arms of government is lower than that of Nordic nations. A government not possessing the confidence of its own people will see a huge discrepancy in its policy efficacy. The reason why the importance of trust stands out is that it is an essential precondition for the people’s spontaneous approval and adaptation.

If the members of a country trust their government, it is possible that this will carry over to belief that policies will lead to increased national wealth.

In order to restore the people’s trust, above all two things should continuously be applied.

Firstly, the law-abiding principle must be obeyed. The law shines only when it is applied fairly and consistently.

Regionalism or taking sides with relatives and friends should not occur. The public’s trust in the constitutional state and national system depends on there being no prejudice, bias, or partisan tendency in society.

The law should be applied consistently under identical conditions. When the application and execution of law can be forecast, it earns trust and the judiciary obtains authority.

The law must be applied equally to both the rich and poor in order to recover confidence.

It is of great importance and urgency to regain social trust by fair and strict law enforcement.

In Korea’s case, the reason why Koreans distrust the judiciary is closely linked to the damage of principle that has been shaped through the inadequate inconsistent application of the rule of law.

Secondly, the eradication of corruption is necessary. Korea’s corruption perception index was ranked 45th among 176 countries worldwide in 2012, down from 39th among 180 nations in 2009.

This is linked to the corruption of politicians and civil servants. Corruption is a big problem as it only benefits the related people, while making it difficult for ordinary citizens.

Also, corruption harms public confidence in the rules of the game, damaging the fairness of competition and ultimately lowering the efficiency of the distribution of resources.

If business regulations increase, corruption may prevail and if it becomes excessive, the black economy inevitably grows.

In other words, a country with high entry regulations has a high possibility of corruption and subsequent black market activity.

Lee Byoung-ki is a senior research fellow at the Korea Economic Research Institute.