The four-river development project pushed during the Lee Myung-bak administration is a typical pork-barrel project motivated more by politics than by economic and policy considerations.
The project consumed a huge amount of taxpayers’ money ― 22 trillion won ― mainly because it was a pet project of the former president. While he was in his office, Lee pushed ahead with the project in place of a canal project, a key campaign promise he had to abandon in the face of strong public opposition.
In view of the excessive government and legislative control of public projects, it is not hard to imagine that there will be many more pork-barrel projects similar to the four-river development project.
Yet, data from the Ministry of Strategy and Finance is truly disturbing. During the past six years, 82 infrastructure projects worth 39.8 trillion won have been started although they failed to pass the cost-benefit analysis, which evaluates the economic aspects of each project.
They account for 25.9 percent of 317 cases that have been subject to a preliminary feasibility study during the same period. In other words, many large-scale infrastructure projects are being carried out even though their benefits fall short of costs.
There are more cases. Statistics at the National Assembly Budget Office show that a total of 23 infrastructure projects were launched between 2003 and 2013 although they failed to pass the preliminary feasibility study.
This is possible because the government has discretionary power to exempt projects of its choice from the review process. A prime example is the four-river development project.
Currently, infrastructure projects which require a budget of at least 50 billion won and which need state funds of 30 billion won or more are subject to the cost-benefit analysis and the preliminary feasibility study.
As seen by the Finance Ministry and the National Assembly Budget Office data, these guidelines are useless in many cases. It is because politicians, notably the president and lawmakers who have constituents to care for, abuse their power to appropriate government spending for national or local projects.
Infrastructure projects take a long time and usually their annual budgets increase as the projects progress. Moreover, it is very difficult to halt major infrastructure projects once they are underway.
We need tighter, enforceable rules on evaluating each project before launching them to ensure there will be no more wasteful cases like the four-river project and local airports, many of which are piling up deficits.
