A gap in economic power between urban and rural area and the role of Saemaul Undong: focusing on Gyeongsangbuk-do in the 1960s and 1970s

This study analyzes the economic development gap between the urban and rural area in Gyeongsangbuk-do, one of Korean southeastern provinces. Saemaul Undong, a representative rural development program of Korea, started to narrow the gap in the 1970s. This study evaluates the role of the program in narrowing the gap in the period. An economic development index based on several economic variables, such as income per capita, industrialization, population growth rate, infrastructure, education, population aging, are calculated and used to evaluate the effect of program on the economic development gap. The result shows that there was no significant change in the gap in the period. Although a few rural regions improved in the index, the main factor of the improvement was industrialization which was not related with the program. However, ergodic distributions of the index changed to the direction of narrowing the gap. However, it is not clear that the change was originated from the program. On the other hand, according to the regression analysis, the null hypothesis that the program played a significant role in narrowing the gap is rejected. This means that although there was an economic improvement in the absolute level, the rural relative economic improvement to the urban area was not achieved significantly in the period. These findings show that some scholars’ argument on the program’s positive and significant role in narrowing the gap may not be true. This study also shows that the related previous studies based on income gap between the urban and rural area may overrate the positive effect of the program on rural economic development in the period.