Economic Policy

Formulation Process

November 5, 2021

By Sheila Ananta Ully, 2021 GMPA Student(Public Management and Public Sector Reforms)

Why We Need Economic Policies and

How It Could Be Done

In the second lecture of the ‘Meeting with the Leaders of Korean Public Organization’ series, the former Deputy Prime Minister of South Korea, Professor Ilho Yoo, shared his insights about why we need an economic policy, how it should be, and how it could be done. From the discussion, I’ve learned that it is needed when the market fails and this must be based on practicality as well as consideration of which policy can give the most benefit.

Applying economic theory into practice, however, it’s not an easy quest. In reality, it’s nearly impossible to formulate a policy that can be a perfect fit for all. There is always a chance that it only benefits some people and harms others. Hence, in creating policies, we are continuously faced with problems of choices and opportunity costs.

For that reason, according to Professor Ilho Yoo, there is no formula to achieve what is called the ‘successful policy’. In his view, maximizing pros and minimizing cost is what we can do to produce great policies that could serve everyone well. Moreover, due to the existence of conflicting interests during the policy formulation process, coordination and harmonization are strongly needed. In addition, good leadership is no less important to this matter. To formulate the most effective policy, great leaders should depend on the system and must incorporate both internal and external experts’ opinions.

In his last remark, he emphasized once again and gave an important message to us, as young public officials as well as future leaders of our home countries, that practicality is the foundation of a great policy. Although political considerations can’t be avoided, they shouldn’t be overemphasized. Thus, we can produce good policies that even though it's not perfect it can give benefit to most people.

This lecture has gained me and each participant rewarding knowledge that producing good economic policies are not an easy task but not impossible; and how important it is to aim at a practical as well as the most beneficial policy. This will definitely be a valuable lesson learned for each of us to bring back home and become an agent of change in better serving our country and its people.