How to Use Community Conditional Cash Transfers and Inter-Village Competition for Rural Development, South Korea (1970–1979)

HAN, Do-Hyun / Claassen, Casper Hendrik

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The “Saemaul Undong” (New Village Movement) was an iconic national rural development program undertaken in the early phases of rapid economic growth in the Republic of Korea. Begun in 1970, the Saemaul Undong was implemented by the national government in partnership with rural villagers. The government provided physical and technological resources to support development projects that were carried out and proposed by villages; at the same time, the government played a role in suggesting priority programs for villages to undertake.

In 1970, the government launched the Saemaul Undong to direct additional efforts to rural areas, where most Koreans still resided. A key aspect of the Saemaul Undong was the use of community conditional cash transfer (CCCT) mechanisms to facilitate and incentivize grassroots-level engagement. The conditional cash transfers aimed to encourage villagers to develop an entrepreneurial, self-reliant mindset, and to undertake development activities: after the initial infusion of resources in the program’s first phase, cash transfers were given only to villages that met preset government criteria, such as reaching a household income target, and the establishment of infrastructure in individual households and farming facilities. The amount of money held by the village development fund—a community credit cooperative for village development activities—was another criterion. The differentiated amount of cash transfers between villages then led to inter-village competition to secure further resources for development.

This case study (prepared by Do Hyun Han and Casper Hendrik Claassen) and delivery note (adapted by Yoon Jung Lee from the original case study)

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KDI School of Public Policy and Management, World Bank
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