Civil Society and Social Capital in South Korea
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Related to civil society, several major terms are used in Korea, including, nongovernmental organization (NGO), civil society organization (CSO), nonprofit organization (NPO), civic movement organizations, and public-interest corporations. The terms NGOs and CSOs are the most popular in academia as well as in journalism. The term NGO is used to describe almost all kinds of nongovernmental and nonprofit activities including environment preservation, women’s issues, social services, arts and culture, membership-serving organizations, and international cooperation organizations, but not educational institutions or hospitals. CSOs include most NGOs, but usually not foundations, business and professional associations, social services, and arts and culture organizations. The term NPO is the most inclusive term that refers to all organizations that are neither government nor for-profit organizations, including NGOs, nonprofit hospitals, educational institutions, and social welfare organizations. Most culture and arts organizations, foundations, nonprofit nursing homes, research institutions, religious institutions, professional associations, and interest groups are also NPOs. Public-interest corporation is a legal term rather than a journalistic one. Public-interest corporations may be categorized into incorporated foundations and incorporated membership associations, depending on the basis of their establishment. They include educational institutions, foundations providing research grants or scholarships, social welfare institutions, arts and culture, medical, as well as religious institutions. Since liberation in 1945, South Korea’s civil society has developed, and its constituent organizations have grown into a visible, independent, and differentiated sector providing services and engaging in advocacy.
The history of Korean civil society actually began after the country regained independence from Japanese occupation in 1945. The main characteristics of various types of organizations including definitions, boundaries, and cultural contexts of civil society have developed since then. And Korean civil society has actually developed and diversified since 1988 when political democratization started. Since late 1990s financial crisis, new types of social economy organizations have emerged and contributed to strengthening the roles of social economy organizations and traditional nonprofit organizations in resolving economic and social problems the country has been facing.
In Korea, civil society in the sense of associational groups for social advocacy has not been well developed, compared with a well-developed social services-providing nonprofit sector arena. Before 1945, the nonprofit sector was dependent on the government and as a result it built no indigenous capacity. In the post-liberation period, the Korean experience of the civil society can be divided into three stages. Since 1945 and the country’s liberation from Japanese occupation, a large number of social and political groups formed, from far-right to far-left, in the tumultuous Korean society. Many service-oriented religious groups and charities or educational organizations were also founded during this period. Before the early 1960s when economic development began to advance rapidly, most nonprofit organizations provided social services or implemented development projects for the poor, mainly financially supported, if not established, by foreign aid.
The second stage began with the authoritarian developmental government and lasted from the early 1960s until 1987. Nevertheless, civil organizations, including advocacy groups promoting social justice, democracy, and human rights, expanded rapidly despite an increasing authoritarian trend. Even before this period, civil activities could develop only within a limited political space. Popular support for various civic groups, such as women’s groups, consumer advocacy groups, and environmental activities, grew with emergence of middle class. There were already popular civil organizations and substantial funding available when the democratic transition occurred in 1985–1987.
The third stage of Korean civil society began with the end of the authoritarian regime in June 1987. Since then, there was another rapid growth of civil organizations. The dramatic rise of citizens’ and labor movement nongovernmental organizations occurred during the late 1980s and early 1990s. New at this stage of evolution of the Korean civil society was the emergence of increasingly effective and sophisticated civic groups led by younger generations. It has been said that the decade of the 1990s in Korea was “the age of civil society.” Particularly under the democratic governments since 1992, the term “civil society organizations” has become a social and political reality. Several distinct evolutions have occurred within the sector. First, the Korean nonprofit sector has grown into a visible and independent entity in relation to government and business. It has been understood as an institutionalized and self-generating reality capable of pressing bureaucrats, politicians, and business. Second, the Korean nonprofit sector has been internally differentiated; this differentiation contributes to the development of the sector itself and to social and political pluralism. Finally, academic and journalistic interests in the sector, as well as public awareness and support, have been growing.
Since 1999 when the Korean economy emerged from its first major economic crisis, after 30 years of sustained economic growth, nonprofit organizations and civil society organizations have become the partner of government in formulating and implementing public policies, job-creation, community development, and community-based social welfare policies. The Korean government has come to recognize the roles of nonprofit organizations and civil society, and thus, the NPO-government partnership has grown and developed, at the level of both central and local government. Korean civil society has expanded in terms of both size and its social role. The government has also promoted the contribution of the nonprofit sector by way of tax policy and government funding. Since the year 2000, tax benefits for individual donors to nonprofit organizations have been continuously increased until 2015. With the help of this government policy, charitable giving in support of nonprofit organizations including public charity and civil society organizations has increased dramatically during this period. Korean citizens’ participation in nonprofit organizations/civil society organizations through donations and volunteering has remarkably increased. Since 1999, activity areas of nonprofit organization have expanded from social welfare services to a variety of other areas including, community development, housing, gender issues, migrant protection, and animal protection. Another characteristic of this period, traditional charities have not remained in the realm of provision of social services under the given circumstances but have become involved in advocacy movements in support of their activities and, if necessary, for reform of the legal system and government policy. At the same time, advocacy groups have also become involved in social services-providing activities. As a result, the borderline between social services-providing organizations and advocacy organizations has blurred.
As the amount of donations to nonprofit organizations including charities and advocacy organizations has increased, transparency has been often raised as an issue by the mass media as well as the general public. Donors, both individual and business corporations, have become keen to know how their donations have been used by nonprofit organizations, including charities. Since 2008, the Korean government strengthened laws and regulations related to the financial transparency and accountability of nonprofit organizations. Nonprofit organizations have been subject to many transparency requirements, including public posting on the website of Office of National Tax Service of their financial statements if their total asset or donation amount exceeds a certain amount. In 2018, new accounting standards were introduced for nonprofit organizations and, therefore, they are obliged to file financial reports based on the new standards, although small-sized nonprofit organizations are allowed a 2-year grace period to comply.
The most recent developments of Korean civil society can be summarized as follows. First of all, the influence of civil society has gradually increased between 2003 and 2018. The civil society sector has emerged as an undeniable actor in national governance along with political parties and other major stake-holders. During this period, four different presidents have been elected. Under the regime of President Rho (2003–2008) and Moon (started in 2017), relatively progressive civil society organizations and their members were more influential in the national political landscape. However, during the conservative regimes under President Lee (2008–2013) and Park (2013–2017), the traditional social groups and organizations appeared to have more influence in the national governance system.
Secondly, civil society and nonprofit organizations have become more diversified during this period. Most evidently, various social economy related organizations such as cooperatives, social enterprises, and community corporations have emerged to help solve social and individual problems. The activities of those social economy organizations supplemented the fragile public welfare services and insufficient public assistance in Korea. Therefore, currently, it is difficult to clearly distinguish social roles between the traditional civil society organizations and more recently developed social enterprises. In short, the social roles and functions of civil society organization and social enterprises are more blurred than ever before.
Thirdly, the capabilities of civil society improved noticeably. These trends are due to external factors such as the expansion of government support to the civil society sector and government institutions that favor civil society growth. However, critical voices toward government policies including anti-war movements, environmental advocacy, and consumer’s movements are other important internal elements that contributed to the increased significance of Korean civil society since early 2000s. In particular, the advocacy-focused organizations had started becoming more involved in direct service provision as well for the poor and the unemployed.
Lastly, the steady increase of critical citizens eager to monitor is another important development to be mentioned. These trends are closely related to IT activities, Internet and networking, and social network services (SNS) activities. Those citizens get their information through cyber space and SNS, and share that information. Through those experiences they become critical citizens monitoring the national agenda and various social issues. The most famous example is the so-called Candlelight Demonstrations of 2016 which resulted in the impeachment of former President Park. In this protest, people utilized SNS, chatting webs, and other networking services and devices.
In Korea, as for social capital, the term is rarely used by civil society practitioners. Only the academic circles use the term to compare the general level of trust in society to test the role of informal networks in corporations and other organizations, and the term has some limitations to fully apply in everyday life. But, the issue of social capital has been discussed in various fields such as sociology, economics, political science, and education since the economic crisis in the late 1990s. Economic and social problems that Korean society was faced with have been discussed and explored from the perspective of “social capital.” The growing awareness of the social economy has led to the need for social capital formation. Solidarity and mutual trust between community residents and civic groups have become more important in creating ecosystems of social economy such as social enterprises and cooperatives.
In Korea, attention to social economy and social economy organizations has increased since 1997 when Korean society was hit hard by the Asian financial crisis. In particular, the creation of jobs for vulnerable groups and the provision of social services for child care and nursing care for the elderly became national tasks. Korean society has been facing a very quickly changing environment, socially and economically, featuring among other issues, a rapidly aging society, increasing demands for social welfare, housing and environment protection, human rights, refugees, community development, animal protection, and unemployment of the younger generation due to changing economic structure. But the Korean society has not expected to meet the new social demands with the traditional nonprofit organizations–government partnership alone. In newly developing environments, the Korean government sees the needs to build up social capital within Korean society to face such unprecedented economic and social problems and has tried to promote new types of civil organizations, such as various types of social economy organizations.
In 2007, the Korean government enacted the Social Enterprise Promotion Act and has carried out various supporting policies to foster social enterprises. The central government policy on social enterprise has aimed to create employment opportunities. The newly formed social enterprises compass to a wider range of business activities, including environment-friendly local food distribution, sustainable tourism, alternative energy, fair trade, regional development, and multicultural family support. From the beginning, the government has applied an accreditation system and has provided financial support for the certified social enterprises along with other supportive policy measures.
By the end of 2016, 92 local or municipal governments had enacted ordinances designed to support social enterprises at the local community level, aiming at both creating employment opportunities and solving community issues. The local governments have introduced a system for pre-certifying social enterprises for financial and nonfinancial support. At the local level, besides social enterprises, two other types of social economy organizations, self-sufficient community enterprises and community businesses, have emerged as vehicles for resolving issues facing local communities.
In 2012, the Basic Act on Cooperatives was enacted so that everyone could easily establish a cooperative. Under this act, as of 2018, 1,185 social cooperatives have come into existence. Unlike consumer and producers’ cooperatives, social cooperatives are not allowed to distribute surpluses to members, but only for a social purpose.
With the support from government policy and private participation, job creation and provision of social services, such as health care, education, elderly care, for vulnerable people through social economy organizations, social enterprise, community business, and social cooperatives have been achieved to some extent. And since 2017, strong efforts to pass Basic Law of Social Economy have been made by political leaders in order to expand systematic support to promote social economy organizations. As well, there have been efforts to establish public and/or private funds in order to provide financial support to social economy organizations, mainly social enterprises and cooperatives, more systematically
As of 2010, the total value added of the Korean nonprofit sector including all types of nonprofit organizations accounted for 3.8% of GDP and 4.6% of total employment (Jeon 2013). The role of the nonprofit sector in creating value-added and employment in the national economy has increased compared to early 2000s due to government policy efforts to promote the nonprofit sector including social economy organizations, mainly social enterprises. Especially, during the period between 2000 and 2010, the proportion of total employment accounted for by the nonprofit sector more than doubled. As of 2017, 33,679 nonprofit organizations, incorporated and unincorporated, are registered at a government agency or a local government (The Beautiful Foundation 2018). Based on 2007 data, of those incorporated nonprofit organizations, social welfare organizations account for more than 47%, educational services 10.7%, labor 10.3%, and culture, arts & sports 6.8% (Ro et al. 2008).
In the year 2017, charitable giving for supporting nonprofit organizations’ activities amounted to 12.89 trillion won, equivalent to 0.74% of GDP (National Tax Statistics 2018). The 2017 rate of volunteering was estimated to be 21.4%, of which monetary value was equivalent to 0.47% of GDP (The Korea Volunteering Culture 2018).
Especially, in Korea, social enterprise has been promoted as a way to procure sustainable resources to solve social problems through business approach. The Korean government has provided a variety of supports such as labor-cost subsidy, education, and consulting services for establishing and nurturing social enterprises. Alongside government’s efforts, large private businesses have joined in the promotion of social enterprises. They have been seeking promising social enterprises to which they could provide financial supports by way of grants and investment, and educational support for social entrepreneurs. And they, sometimes, have directly been involved in the establishment and development of social enterprises. As a result of these efforts of government and businesses, the number of certified social enterprises increased from 55 in 2007 to 2,201 in 2018. And, more than 46,000 are employed at these certified social enterprises. Some 10.8% of these social enterprises are primarily involved in culture and the arts, 9.2% in cleaning services, 8.7% in education, and less than 5% each in social welfare services (4.9%), environment (4.7%), nursing care and domestic services (4.0%), tourism and sports (2.5%), and health services (0.7%) (Korea Social Enterprise Promotion Agency 2019).
Since enactment of the 2012 Act, the number of cooperatives also has increased rapidly. As of 2018, 1,185 social cooperatives and 13,267 general cooperatives are operating in a variety of activity areas. And more than 31,000 persons are employed at the cooperative sector. Among social cooperatives, the main activity area is learning and education (29.2%), followed by job creation and social participation (11.7%), social welfare services (8.1%), culture, arts and sports (7.2%), health and medical services (5.5%), and others (38.3%) (Ministry of Economy and Finance 2020).
Since 1945, nonprofit organizations have played an important role in Korean society, acting as major providers of education, social welfare, and health services and as important employers in those areas. Since the 1980s, advocacy nonprofit organizations also have contributed to political democratization and building a new governance model of Korean society. As a result, nonprofit organizations, both advocacy-oriented and social services-providing organizations, have changed the position of Korean civil society. They have come to participate actively in public discussion on important social and economic issues and sometimes offered policy alternatives to the government. They have also played an active role in reforming the national governance structure. Social economy organizations, social enterprises, and cooperatives, at both national and local levels, have begun to participate in efforts to solve the social and economic problems that Korean society has faced in the newly changed environments. Despite some limitations, such as limited resources, inadequate accountability, and insufficient transparency, civil society is expected to contribute to building social capital and, therefore, expand its role of meeting social demands in Korea’s society independently or in partnership with government.
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