Is Central Government Policy Failing? Discover What Local Communities Really Need to Thrive

Translation result.

Population decline and regional disappearance are no longer a distant problem. The Korea Employment Information Service’s 2024 report warned that the risk of local extinction has spread beyond county-level areas to metropolitan cities, signaling a crisis that has already gone nationwide.

Yet we have long relied on the same prescriptions: widen roads, build industrial parks, and erect large facilities. Those projects are visible and easy to showcase, but they have clear limits in reviving communities. Buildings increased, but people did not stay.

The numbers make the reality clear. The Ministry of the Interior and Safety reported that local governments’ total budget in 2024 was 310.1 trillion KRW (approximately $232.6 billion), while their consolidated fiscal balance was projected to show a deficit of 18.6 trillion KRW (approximately $14.0 billion). Fiscal self-reliance fell to 48.6%, down 1.5 percentage points from the previous year. One hundred four municipalities—42.8% of the total—cannot cover even personnel costs with local taxes alone. This indicates how weak many regions’ basic fiscal capacity has become.

Under these conditions, simply delivering centrally designed projects to localities has obvious limits. Each region faces different realities: some need jobs for young people, others need urgent care services, and some must first fix hospitals and commuting networks. When the central government packages programs in a one-size-fits-all framework, those programs inevitably miss the mark.

We must change the question. Instead of asking what to build, we should ask how to create places where people can live. Often regions need policies that support everyday life more than giant facilities: housing that keeps young people in town, childcare parents can rely on, medical services and transport infrastructure for seniors, cultural spaces for community gatherings, and a functioning local economy.

Japan’s Naoshima Island illustrates this. Once a small mining community, Naoshima leveraged arts projects and resident participation to generate new vitality. The Benesse Art Site attracts more than 500,000 visitors a year and has turned the island into a world-renowned art destination. The key was not large-scale civil engineering but the community’s use of its own resources, with residents becoming agents of change.

That is why local leadership and resident-centered policies matter. People who live in a place best understand its problems. Policy reaches people’s lives when residents voice their needs and local governments design solutions that fit local conditions. Rather than micromanaging, the central government should expand the budgets and authorities regions can use autonomously.

Resident-centered policy is not a cure-all. Gathering input takes time, and administrative capacity varies across regions. That makes the central government’s role even more important: it should be a supporter—backing regions with financial and institutional frameworks so they can act independently—rather than a top-down force that pushes every locality along the same path.

Naoshima’s lesson is simple: a local economy does not revive on cultural content alone. Transport infrastructure, living conditions, and comfortable daily life must come together to create regional competitiveness. Economic, cultural, transport, and everyday-life policies should not operate separately; they need to connect into a single lived experience.

Regional disappearance is not just about population counts; it is about the collapse of living conditions. People do not leave only because a road is missing. They leave when jobs, care, education, culture, healthcare, transport, and overall quality of life disappear. Ultimately, the power to revive a region comes from policies that protect residents’ lives, not from large buildings. The central government cannot design a region’s future on residents’ behalf—regions recover when residents are at the center.