Economic integration and decentralization matter more than administrative consolidation and decentralization among regions such

The discussion over a unified special metropolitan city for Gwangju and Jeonnam has become an important opportunity to reconsider the direction of local self-government in Korea, going beyond a simple administrative district reorganization. Until now, local self-government in Korea has operated with a focus on “administrative decentralization,” remaining within the bounds of limited transfers of authority under a centralized structure. However, amid structural changes such as population decline, regional extinction, and industrial restructuring, the limits of the existing system are becoming increasingly clear.

In this context, the integration of Gwangju and Jeonnam deserves attention not as a mere organizational merger, but as an attempt to shift the center of local self-government from administration to the economy. The key issue is not “who holds authority,” but “whether a structure can be created in which the region can grow on its own.”

At present, although Gwangju and Jeonnam effectively function as a single living and economic area across various policy fields such as industrial policy, urban planning, and transportation network development, they remain administratively separate. As a result, duplication and inefficiency have arisen in areas such as competition to attract investment, industrial complex development, and welfare policy. If integration is achieved, these policy functions could be designed in an integrated way at the metropolitan level, greatly enhancing not only administrative efficiency but also strategic policymaking.

In particular, the effects in industrial policy and national land planning are likely to appear immediately. If industrial strategies can be formulated at the metropolitan level and transportation and logistics infrastructure can be built in an integrated manner, new opportunities could be created in terms of attracting businesses and generating jobs. In the long run, administrative cost savings on the scale of hundreds of billions of won can also be expected.

However, integration does not automatically mean success. The most important variable still lies in the fiscal structure. Even if a unified special metropolitan city of Gwangju and Jeonnam forms an economic zone worth about 159 trillion won, meaningful policy autonomy will inevitably remain limited if the current centralized fiscal structure is maintained. This is a structural problem in which the scale of the regional economy and fiscal authority do not align.

Ultimately, the success or failure of integration depends not on administrative integration itself, but on how much economic decentralization and fiscal decentralization are achieved alongside it. If the region cannot secure the authority to design its own industrial strategy and manage investment and finances, integration is likely to remain just another administrative experiment.

There are also considerable practical challenges in the integration process. Personnel conflicts between civil service organizations, local political disputes over the location of government offices, and the possibility of administrative vacuums are all foreseeable risks. To minimize these problems, phased integration, clearly defined personnel standards, and institutional mechanisms to preserve policy continuity are needed.

A unified special metropolitan city of Gwangju and Jeonnam is an important policy experiment in that it would be the country’s first administrative integration between metropolitan-level city and provincial governments. If successful, it could become a new model of local self-government that spreads to other regions. Conversely, if it fails, it could also discourage future discussions of broader regional integration itself.

The problem facing Korean local self-government today is no longer simply one of administrative structure. It is whether regions can build economic systems that allow them to grow on their own. For the integration of Gwangju and Jeonnam to have genuine meaning, it must not stop at “administrative integration” but move toward “economic integration.” And the starting point is not merely the transfer of authority, but the creation of a structure in which regions possess both responsibility and authority.

Gwang yong Go, Policy Director, Center for Free Enterprise (CFE)

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Original title: 광주·전남 등 광역간 행정 통합·분권보다 경제 통합·분권이 핵심

Author: Gwang yong Go

Date: 2026-03-23

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=28719