contents go

KDI - Korea Development Institute

KDI - Korea Development Institute

SITEMAP

Popular Search Terms

HOT ISSUE

연구원 동정 「2026 Knowledge Exchange Days (KED)」Painting the Future: Life after the AI Singularity

On Friday the 23rd, the MoEF hosted and the KDI GKEDC organized a forum titled 'The Future We Envision Beyond the AI Singularity,' featuring approximately 50 Korean and international citizens as panelists.

November 05, 2026
Economic Bulletin Economic Bulletin, November 2026

In August, total industrial production, retail sales, and facility investment decreased. In September, growth in the number of employed persons slowed, while the month-on-month increase in consumer prices moderated.

October 31, 2026
연구원 동정 Joint Seminar on 「Demographic Change: The Future of Korea and Policy Responses」

On Thursday the 29th, a joint seminar on legislative-executive cooperation was held―hosted by MPB and NAFI, and organized by KDI―to respond to demographic shifts and establish the 2045 Mid-to-Long-Term National Development Strategy.

November 04, 2026
KDI FOCUS Policy Agenda for Effecive Expansion of Renewable Energy Deployment

Renewable energy subsidy reform, grid expansion, and improvements in financing conditions should be pursued in an integrated manner to accelerate deployment while enhancing its efficiency.

October 01, 2026
KDI News What‘s Up Newsletter Vol.38

The 38th issue of the KDI What's Up newsletter is now available!

October 20, 2026
Journal of Economic Policy KDI Journal of Economic Policy, August 2026

In this issue, you can explore a range of papers offering in-depth analyses of key economic issues, including invoicing currency and exchange rate transmission in Korea’s exports and the effects of the Basic Pension reform on the consumption and labor supply of the elderly.

October ,
KDI News KOR “The 14th Korea-OECD International Forum on Budgeting” Held

The Ministry of Planning and Budget successfully co-hosted the 14th Korea-OECD International Forum on Budgeting under the theme "Fiscal Policy Beyond Crisis: Preparing for the Future" on September 30 and October 1, 2026.

October 01, 2026
Economic Outlook KDI ECONOMIC OUTLOOK | UPDATE 2026.08

The Korean economy is projected to grow by a strong 3.2% in 2026, supported by favorable conditions in the global semiconductor market, and by 2.2% in 2027.

August 19, 2026
BACK
HOME
BACK

International Development

Search results : 693

12345678910
Join our Newsletter

World's Leading Think Tank, Korea Development Institute

Security code

We reject unauthorized collection of email addresses posted on our website by using email address collecting programs or other technical devices. To access the email address, please type in the characters exactly as they appear in the box below.

captcha
KDI Staff Information

Please enter the security code to prevent unauthorized information collection.

KDI Staff Information

Please check the contact information.

OK
KDI Staff Information

Please check the contact information.

OK

Summary

Other Research KOR Aid for Trade: Global Trends, Cases, and Implementation Framework
This study analyzes global trends and shifting policy agendas in Aid for Trade (AfT) and compares the AfT implementation systems of major donor countries, including the Republic of Korea, to draw policy implications for improving Korea's AfT policy.

AfT currently faces a challenging funding environment. Total Official Development Assistance (ODA) from members of the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) fell by 23.1 percent year-on-year in 2025 to USD 174.3 billion, marking the sharpest decline on record. This decrease was driven by simultaneous cuts from the five largest donors, namely the United States, Germany, France, the United Kingdom, and Japan, with the United States alone recording a 56.9 percent reduction. This decline in development finance is also expected to have a significant impact on Aid for Trade (AfT), although responses vary across donor countries. While European donors have reduced both the share of AfT within ODA and its absolute volume, Japan has instead expanded both its AfT share and overall commitments, maintaining its position as the largest AfT donor since 2022.

Globally, AfT continues to center on economic infrastructure and productive capacity building―accounting for 56.7 percent and 40.6 percent of total AfT in 2024, respectively―while its policy agenda has steadily broadened from global value chain participation and regional trade integration (2011-2015) to the
Sustainable Development Goals (SDGs) and climate action (2016-) and supply chain resilience and digital trade (2021-). Korea's AfT expenditure nearly doubled from USD 0.58 billion in 2015 to USD 1.12 billion in 2024, ranking among the top seven donors, with an AfT share of ODA (about 31 percent) exceeding the global share of 18.1 percent. However, Korea's portfolio remains disproportionately concentrated in economic infrastructure (68.9 percent, above the global share of 56.7 percent), while trade policy and regulation support accounts for only 0.9 percent. Meanwhile, its digital economy and innovation share has grown rapidly, from 8.2 percent in 2015 to 23.4 percent in 2024, the highest share among major comparator donors.

A comparative analysis of Japan, the United Kingdom, the Netherlands, and Australia identifies common features across policy, governance, financing, and performance management: these donors explicitly reference AfT (or trade-development linkages) in top-level policy documents, institutionalize consultation channels between development and trade authorities, and separately manage, brand, and communicate AfT outcomes through international platforms such as the AfT Global Review. Japan, in particular, coordinates across different ministries through Japan International Cooperation Agency (JICA), an integrated grant-and-loan implementing agency, and a cabinet-level coordination council, explicitly linking economic security and supply chain connectivity to its development cooperation charter.

Benchmarked against these cases, Korea's AfT implementation system reveals clear gaps in policy strategy, governance, and performance management. No single authority is responsible for AfT planning and inter-ministerial coordination―a structural consequence of the bifurcation between grant aid (Ministry of Foreign Affairs) and concessional loans (Ministry of Economy and Finance), as well as the presence of a separate trade ministry (Ministry of Trade, Industry and Resources). As a result, Korea's AfT achievements remain scattered across individual ministry reports and are undervalued both domestically and internationally, while its participation in the AfT Global Review has been limited to survey-level monitoring and evaluation reporting.

This study argues that Korea's AfT challenge lies not in a lack of resources or performance, but in how AfT is recognized and institutionally designed: Korea already possesses proven achievements―such as the export of the UNI-PASS customs system to seven African countries and Korea International Cooperation Agency (KOICA)'s smart farm projects―that have yet to be integrated into a coherent AfT policy framework. This governance gap also entails a strategic opportunity cost, as emerging AfT agendas in which Korea holds comparative advantages―supply chain security and critical minerals, digital trade rules, and climate-trade linkages―are being shaped by other donors while Korea remains largely absent from the discussion.

The study proposes five institutional tasks for building a Korean AfT implementation system: (1) establishing a cross-cutting integrated policy framework by reclassifying AfT-relevant content scattered across regional and sectoral strategies; (2) formalizing governance through official consultation channels among the Ministry of Foreign Affairs, the Ministry of Economy and Finance, the Ministry of Trade, Industry and Resources, KOICA, and the Economic Development Cooperation Fund (EDCF); (3) developing verified achievements such as UNI-PASS and smart farm projects into impact stories and elevating Korea's engagement in the AfT Global Review to the level of session hosting; (4) building an integrated performance management system to consolidate and report AfT outcomes across ministries; and (5) proactively engaging in the formation of emerging trade-development agendas through the WTO Committee on Trade and Development and the AfT Global Review. The 10th AfT Global Review, to be held in Geneva in October 2026 to mark the 20th anniversary of the AfT Initiative, represents the nearest opportunity for Korea to demonstrate progress on these tasks.

Ultimately, building an AfT implementation system is not merely a matter of improving aid efficiency and effectiveness. It is about positioning AfT as a policy instrument linked to Korea's trade and economic diplomacy strategy, and laying the groundwork for Korea to serve as a norm-setter amid the ongoing reshaping of the global geoeconomic order.

Summary

Other Research KOR Evaluating the Effectiveness of Korea’s Materials, Parts, and Equipment (MPE) Policy
This study evaluates the effectiveness of Korea’s first Materials, Parts, and Equipment (MPE) Competitiveness Enhancement Plan (2021-2025) and draws policy implications for supply chain diversification and resilience. Following export restrictions imposed by Japan in 2019 and the growing fragmentation of global supply chains, Korea elevated MPE policy from a conventional industrial competitiveness strategy to a key pillar of economic security. Against this backdrop, the study examines both structural changes in the MPE sector and the performance effects of major policy instruments.

Using industry-level and firm-level data, the study analyzes changes in domestic production, value-added, trade structure, and corporate performance before and after policy implementation. At the industry level, self-sufficiency ratios, import penetration ratios, and trade diversification indicators are employed to assess structural changes in production and trade. At the firm level, the impacts of three major policy measures―R&D support, designation as a National Champion Firm, and participation in specialized industrial complexes―are evaluated using propensity score matching (PSM) and difference-in-differences (DID) methods.

The empirical findings reveal notable shifts in Korea's MPE trade structure: import dependence on Japan declined, while import dependence on China increased and exports to China contracted. In particular, the analysis demonstrates that deepening import dependence on China exerts a negative effect on domestic production, whereas exports to China contribute positively to domestic output―underscoring China's dual role as both a critical upstream supplier and a key downstream export market within Korea's MPE value chain.

Firm-level analysis indicates that R&D support is the most effective policy instrument, generating positive effects on profitability, innovation, and productivity. National Champion Firm designation strengthens innovation capacity, while participation in specialized industrial complexes contributes to financial stability in the early stages. Moreover, policy packages combining R&D support with National Champion Firm designation produce considerably stronger outcomes than either instrument alone, pointing to significant complementarities across policy instruments. In contrast, policy combinations without R&D support exhibit weaker innovation and profitability outcomes.

Based on these findings, the study argues that Korea’s MPE policy should evolve from fragmented project-based support toward an integrated, R&D-centered policy package spanning the entire innovation cycle. It also highlights the need to strengthen long-term technological capabilities, develop ecosystem-based industrial clusters, and shift policy objectives from import substitution toward strategic indispensability and supply chain resilience within global value chains.

These findings should be interpreted with caution. The firm-level analysis compares treated and untreated firms and cannot fully rule out the influence of unobserved firm characteristics; moreover, a uniform treatment-timing assumption (2019 for R&D, and 2020 for National Champion Firm designation and specialized industrial complexes) may not fully capture firm-specific variation in the timing of policy benefits. The results should therefore not be interpreted as a definitive assessment of the overall success or failure of Korea's MPE policy. Further research―incorporating firm-specific treatment timing, longer time series, and complementary qualitative evidence―is needed to validate and refine these findings.

Summary

Other Research KOR Whole-of-Government Coordination in ODA: Comparative Cases of Donor Countries
Amid rapidly changing global conditions, complex and interconnected challenges have become increasingly prominent, highlighting the importance of whole-of-government approaches in international development cooperation. The significance of such approaches is reflected in the OECD DAC peer review framework, which assesses whether member countries have coherent and coordinated government-level systems for effective development and humanitarian assistance. Key evaluation criteria include leadership, accountability, complementarity, and inter-agency responsibilities.

Implementing whole-of-government approaches in practice presents multiple challenges. While global issues such as supply chains, climate change, health, and food security emphasize the need for coordinated action, the specialized expertise of individual ministries has become increasingly important. Whole-of-government coordination requires horizontal collaboration across agencies, often involving substantial costs and efforts, and raises questions about balancing individual agency accountability with collective action.

This study examines the theoretical background, concepts, and scope of whole-of-government coordination in development cooperation. It also reviews analytical criteria for evaluating coordination frameworks, focusing on legal and institutional foundations, inter-ministrial coordination mechanisms, and evaluation and performance management measures, which function as unintended, indirect coordination tools. Using these criteria, the study compares the development cooperation systems of selected donor countries, including Japan, France, the United Kingdom, Germany, and Spain, to explore how whole-of-government coordination is structured and implemented.

The research provides a foundation for understanding the design and assessment of government-wide coordination mechanisms in development cooperation, contributing to the discussion on policy coherence, accountability, and effectiveness in international development policy.