Republic of Korea “graduated” into a high-income category in the early 1990s and thus is classified here in the high-income OECD group rather than in East Asia and Pacific.
Fifth, governments need to be made accountable, not bypassed . Because, in general, developing countries resolve agency, predation, and collective decision-making problems less efficiently than industrial countries, many of the 1990s reforms sought to introduce policies (such as dollarization and fiscal rules) that reduced governmentdiscretion and minimized demands on institutions. But these
The government’s ability to deliver inclusive growth crucially depends on the quality of governance. This paper reviews the linkages between governance and inclusive growth, and key policies to improve governance. The policies include (1) structural reform, automation, improving rules and procedures (including for fiscal and monetary policies) to limit the discretion and hence the space for policy errors; (2) human resource policies, capacity building, effective anti-corruption frameworks to incentivize public officials to make decisions in the best public interest; and (3) transparency, accountability, and inclusive political institutions to inform and monitor policymaking.