Despite achieving 100% of the performance targets set by the government, many government subsidy programs are failing to demonstrate actual policy effectiveness. Critics argue that when targets are set too low or when indicators focus on simple satisfaction and participation rates, it becomes difficult to assess the real outcomes of these programs.
According to the government's evaluation results released on September 20, among the 1,014 projects evaluated across 42 ministries this year, 588 projects, or 57.99%, received a 'project improvement' designation. The total budget for the evaluated projects was 42.7661 trillion won, with 28.3076 trillion won, or 66.19%, allocated to projects that received the improvement designation.
The issue lies in the fact that many projects received improvement designations despite meeting their targets. This raises concerns about the adequacy of the target levels and performance indicators.
A notable example is the Ministry of Culture, Sports and Tourism's tourism industry loan support program. The performance indicator for this program, the 'increase in sales of loan-receiving companies,' showed a 23.0% increase in 2025, significantly exceeding the initial target of 5.92%. While this may appear to be a successful project at first glance, the evaluation panel noted that the indicator requires further validation to accurately reflect the actual growth of the beneficiary companies. It is challenging to determine whether the sales increase is due to the loan support or other factors such as market improvements.
The evaluation panel emphasized the need to compare the sales growth rates of supported companies with similar non-supported companies and to use survival rates and employment retention rates as supplementary indicators to more precisely measure the pure effects of government support.
In some cases, projects achieved all three performance indicators, but the targets were set lower than the previous year's performance or the average of the last three years. While achieving the targets may seem like a success, if the targets were set lower than past performances, a 100% achievement rate does not necessarily indicate project improvement or policy effectiveness.
The Ministry of Oceans and Fisheries' overseas market development support program for shipping and logistics companies has been advised to improve its performance target levels. The targets for exceeding the overseas logistics market development support program were set at 12 cases for 2023, 10 for 2024, and 8 for 2025, indicating a need for more challenging goals.
There are also instances where budgets have increased while performance targets have been lowered or set post-factum. The Ministry of Climate, Energy, and Environment's river estuary waste cleanup project saw its budget for 2026 increase by 13.342 billion won compared to the previous year, yet the performance target for waste collection was set lower than the previous year or determined after the fact, highlighting a lack of consistency between budget size and performance targets.
The Ministry of SMEs and Startups' Sejong regional startup infrastructure support program received a 'reduction' designation. The performance indicator targets were deemed too low compared to the last three years. The primary performance indicator for this program, the survival rate of graduated startup incubation centers, was set at 86.8%, despite last year's performance being 91.7%. The target for the regional settlement rate of non-capital area graduated companies was set at 57.1%, also lower than the previous year's rate of 61.5%.
Indicators that are easy to measure, such as beneficiary satisfaction or the number of participants, also have limitations. The Intellectual Property Office's intellectual property creation support program was criticized for having performance indicators focused on satisfaction, making it difficult to demonstrate the qualitative outcomes of the program and lacking objective justification or rationale.
Ultimately, there is a call to shift the performance management of government subsidy programs from merely achieving targets to focusing on actual policy effects. This involves comparing the differences between supported and non-supported entities and expanding the use of tangible outcome indicators such as sales growth rates, survival rates, and employment retention rates. Furthermore, there is a growing demand for the results of performance evaluations to be effectively reflected in the budget formulation for the following year, necessitating a strengthened budget adjustment system based on performance.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.