How to Use Community Conditional Cash Transfers and Inter-Village Competition for Rural Development, South Korea (1970–1979)

To download and read this case study, by Do-Hyun Han and Casper Hendrik Claassen, click here

To read a condensed delivery note on community conditional cash transfers and the Saemaul Undong, prepared by Yoon Jung Lee, click here

South Korea experienced a period of rapid industrialization and economic growth in 1960-70s  when the Economic Planning Board had made a series of large-scale investments in the industrial sector and the urban areas that hosted industries. This created serious income inequality between urban and rural areas, leading to an exodus from the rural areas as villagers left to seek employment in urban areas. The unprecedented scale and chaotic nature of rural-urban migration placed a severe administrative burden on urban centers, Seoul in particular, and even threatened political and social unrest. (Brandt 1982)

Development Challenge

In the 1960’s, the majority of South Korea’s population was based in rural areas. They lived in villages that lacked adequate facilities, where poor infrastructure contributed to keeping productivity low and limiting sources of income. Villages typically lacked accessible roads, electricity, telephone lines, warehouses, modern bridges, and modern irrigation facilities.


The Saemaul Undong (translation: “New Village Movement”) program in the 1970’s was an initiative of the government of South Korea to partner with local villages in an effort to hasten economic development. SMU was a comprehensive rural development growth strategy that was fundamentally led at a grassroots level—villagers overcame rural poverty mainly through their own efforts (Han 2012). The government did, however, play a crucial role in incentivizing developmentalism in villages through a community conditional cash transfer (CCCT)2 strategy that was the centerpiece strategy of Saemaul Undong. Under CCCTs, cash transfers are only made to villages that meet set criteria, making transfers conditional upon the actions of the community.

Delivery Challenges

  • How to Make Rural Development a Priority for Local Government Officials

Without the proactive involvement of local government officials, it would be difficult to enforce the CCCT mechanism of Saemaul Undong.

  • How to Fund Rural Development

Crucial to this process was finding an innovative way to encourage villagers to attain sustained income increase through self-sustained measures.

  • How to Create a Sense of Ownership and Self- Reliant Villages

Low villager participation could easily derail Saemaul Undong. It proved important to have village leaders of Saemaul Undong who were motivated, competent, and accepted by their local communities, as they would need to motivate villagers to participate in the process of making villages self-reliant.

  • How to Promote Leadership and Assist Villages That Fall Behind

Finding and cultivating competent leaders to lead the Saemaul Undong initiative in the villages would be crucial.

Lessons Learned

  • Fostering Government-Villager Partnership

The central government sought to establish a platform for rural development by improving the competency of local governance institutions and by implementing important reforms that prioritized rural development. A key part of this process was ensuring, through performance-based evaluations, that local government officials would actively engage rural communities. The positive government-villager partnership that existed helped village Saemaul leaders to promote Saemaul Undong projects at a grass-roots level. Cooperative partnerships between local government and village Saemaul leaders were critical to ensuring localization.

  • Empowering Local Communities by Using Inter-Village Competition-Based Differentiated Support

By emphasizing democratic decision making and voluntary participation, the government encouraged villager participation and interest in Saemaul Undong (Han 2013). Successful village Saemaul leaders embodied Saemaul Undong’s core principles, which can be defined as ‘the great transformation of farming-for-subsistence, to agriculture-for-making profit.’

  • Fostering Village Entrepreneurial Leaders with Business Capacity Building

Village leaders of Saemaul Undong were intermediaries between villages and government. Through CCCTs and training, the government empowered enterprising Saemaul leaders to encourage their own rural communities to participate in development-oriented cooperative projects.

  • Adaptive Implementation

By devolving authority over project selection and implementation to the grassroots-level, as represented by the empowerment of village assemblies, projects in villages, could be adapted to local conditions and be customized to address local needs and concerns.