Korea Development Institute

The main role and responsibility of KDI as a leading economic think tank is to set new targets for Korea to achieve greater prosperity. With its eyes on the economic horizon, KDI will focus on research activity which can provide vision and direction for greater prosperity. In doing so, KDI will answer the need for growth models suited to the ever-changing domestic and international environments.

KDI will uphold its mission in order to make substantive contributions to the government and society as well as to the public and private sectors by providing timely and effective policy alternatives. KDI, by continuously executing the mission, will propose policy recommendations that will become the core foundation for the nation’s economic growth. In addition, KDI will maximise its organisational capacity to become an international policy institute that serves as a compass for economic policymakers.

KDI was founded in 1971 in recognition of the need for a think tank that researches economic policy issues concerning Korea in both systematic and applicable ways, and assists the government in formulating the "Five-year Economic Development Plans" and related policies. KDI research fellows took part in the formulation and support of not only the five year plans but also the three-year rolling plans and yearly economic management plans. They also conducted short-term research projects to evaluate current economic policy issues and frequently held policy discussions and conferences. KDI also analyzed the long-term economic prospects for Korea and published its results in Long-term Socio-economic Development during 1977~91. Apart from its contribution to economic policy formulation, KDI also contributed to laying the foundation for economic research on Korea. In collaboration with the Harvard Institute of International Development (HIID), KDI studied 30 years of socio-economic development in Korea from its liberation in 1946 to the mid-1970's, and published the results in a ten-volume series in both Korean and English titled, The Economic and Social Modernization of the Republic of Korea. This comprehensive research study has become a valuable reference for economists, policymakers, and both domestic and foreign economic-related organizations.

KDI has continuously implemented extensive policy-oriented research in the areas of macroeconomics, public finance, monetary and financial economics, industrial organization and international trade, which are all directly related to economic development. In addition, social welfare issues, which have recently attracted considerable attention in Korea, were also analyzed by investigating valuable policy lessons from the experiences of advanced economies. Fundamental studies in social welfare systems such as health insurance, industrial accident insurance, pension and retirement funds, unemployment insurance, as well as studies and experimental research on income distribution topics, including absolute poverty, were performed. Social indicators used in advanced countries were modified to ensure their suitability in Korea by establishing appropriate definitions and measurement methods. This contributed to the publication of Korea's Social Index by the Division of Survey and Statistics of the Economic Planning Board.

KDI has continuously implemented extensive policy-oriented research in the areas of macroeconomics, public finance, monetary and financial economics, industrial organization and international trade, which are all directly related to economic development. In addition, social welfare issues, which have recently attracted considerable attention in Korea, were also analyzed by investigating valuable policy lessons from the experiences of advanced economies.

Fundamental studies in social welfare systems such as health insurance, industrial accident insurance, pension and retirement funds, unemployment insurance, as well as studies and experimental research on income distribution topics, including absolute poverty, were performed. Social indicators used in advanced countries were modified to ensure their suitability in Korea by establishing appropriate definitions and measurement methods. This contributed to the publication of Korea's Social Index by the Division of Survey and Statistics of the Economic Planning Board.

The long-term economic development of Korea has always been the main research concern of KDI. In 1985, KDI implemented a collaborative research project titled Prospects of the Korean Economy in 2000 with 11 other public research institutes. In 1988, KDI served as a steering research institute for the Economic Restructuring Consultative Council, a presidential.

Under the newly-elected government, KDI took part in the seventh Five-year Plan in 1992, and began formulating the Five-year Plan for the New Economy in 1993. However, as this plan remained a tentative paper plan without a follow-up implementation framework, the series of Five-year Plans over the past several decades came to an end. For the second collaborative study with Harvard Institute of International Development (HIID), KDI conducted another study on Korea's economic growth experiences starting in the mid-1970's and published a three-volume series on Korea's socio-economic development process. To commemorate the 50th anniversary of Korea's Liberation, KDI published a research report both in Korean and English that covered all the major economic issues of Korea over the past five decades.

In the midst of worldwide globalization, the domestic financial sector was dealing with reform measures such as liberalization and financial market development. KDI continued studies in these topics and played a significant role in the activities of the Financial Reform Committee established in January 1997, and as an output the Committee published Report on Comprehensive Financial Reform in December 1997. Based on studies of these economic issues and experiences of long-term economic development plans, KDI published Comprehensive Measures for Overcoming Economic Crisis and Structural Reforms in April 1998, thereby providing various policy instruments for overcoming the economic crisis. In this study, critical issues and appropriate action plans for structural reforms were presented. In general, following the financial crisis, KDI's research topics have expanded to address a broader range of issues in the national economic system.

KDI has endeavored to introduce comprehensive mid- to long term policy measures to foster sustainable growth and at the same time, strengthen capabilities in microeconomic research, innovation and improving market structures. In addition, in order to incorporate economic efficiency and balanced distribution, KDI is working to strengthen fiscal productivity. Meanwhile, to approach socio-economic problems such as education and housing in an economic perspective, KDI strongly supports collaborative research with not only other research institutes in Korea but with international organizations such as the World Bank and OECD, thus internationalizing its research efforts.

In 2001, KDI conducted a collaborative study called Vision 2011 with 16 other research institutes, academic units and civic groups, which presented the challenges ahead for the Korean economy. What resulted was a publication entitled, Vision 2011: Open Society, Flexible Economy. In 2004, KDI published Dynamic Korea: a Nation on the Move, in light of the International Conference on New Vision and Strategy under Changing Leadership in Northeast Asia. Aims such as balanced growth and distribution, social cohesion, and voluntary participation are the underlying foundation for the new participatory government. This publication contains policy directions that will put Korea on the right track to establish an internationalized advanced economic system and to become an economic hub of Northeast Asia.

KDI will also focus its research capability on projects such as productivity of the public expenditure management system and a competitive financial services industry through the elimination of the gap between financial markets.

As the global economy becomes more integrated or intertwined, one nation’s economic risks tend to spread fast and widely at an unprecedented pace. Networks become more tightly connected, demanding a new economic development paradigm for co-existence and co-prosperity, not for individualistic survival. Now that the two rounds of global economic crisis stemming from the US and Southern Europe have increased uncertainties, both internally and externally, KDI has put in enormous efforts to find a new growth path and propose policy alternatives in advance which could help the Korean economy take a leading role in the post-crisis period. Furthermore, while strengthening its ability to respond to macroeconomic crisis, it also has worked to develop a future strategy that could actualize welfare society, balanced growth and economic democracy so as to build a robust economic structure. The institute has produced comprehensive studies based on its in-depth analyses on Korea’s economic, political, social and future conditions in order to find its new growth engine and solve pending problems, such as mounting household debts, increasing income insecurity among the low-income class and slowing potential growth resulting from population aging.

• 31 December 1970: Promulgation of Act establishing KDI (Law No.2247)
• 11 March 1971: Establishment of KDI
• 1982: Installation and operation of the International Development Exchange Program (IDEP)
• 6 May 1982: Opening of the Korea Economic Institute (KEI) Washington D.C. Office in US
• 15 November 1990: Launching of the North Korean Economic Research Center
• 27 December 1991: Establishment of the Center for Economic Information
• 9 March 1994: Launching of the Center for Legal and Economic Research
• 5 December 1995: Act on KDI amended establishing KDI Graduate School (No.5047)
• 5 December 1997: Opening of the KDI School of International Studies
• 18 September 1998: 'Center for Economic Education', changed to 'Center for Economic Information and Education,' and moved to KDI
• 6 November 1999: 'KDI School of International Studies' changed to 'KDI School of Public Policy & Management'
• 6 January 2000: Establishment of the Public and Private Infrastructure Investment Management Center (PIMAC)
• 27 January 2005: Integration of Private Infrastructure Investment Center of Korea (PICKO) with KDI to launch the Public and Private Infrastructure Investment Management Center (PIMAC)
• 11 September 2009: Establishment of Center for International Development (CID)
• 30 December 2012: Relocation to Sejong completed
• 1 June 2014: Establishment of the Center for Regulatory Studies
• 22 December 2014: KDI School of Public Policy and Management's relocation to Sejong completed

Faced with the challenge of establishing scientifically-sound economic policies in the 1970s, the Korea Development Institute (KDI) was established in March 1971 by the government to provide in-depth and practical analysis for the development of appropriate economic policies in Korea. As the first social science think tank in South Korea, KDI was tasked with designing the nation's economy towards prosperity.

Starting with a team of 12 economists, KDI quickly became a driving force behind the economic and social development of the nation. Over the past five decades, the Institute has expanded its research to cover a broad range of fields including macroeconomics, finance, social security, labor, industry, trade, competition policy and North Korean economy. Its tireless efforts have resulted in significant contributions to the formulation of sound policies and the implementation of institutional reforms. KDI has evolved and adapted to meet the changing needs of our time while still maintaining its commitment to promoting co-shared progress through activities such as economic education, government-funded project evaluation, PPP support, nurturing future global leaders and sharing the Republic of Korea’s development experiences.

The Korean society currently faces numerous challenges due to rapid changes in the internal and external environment. To overcome these challenges, a holistic solution is necessary that prioritizes quality of life, conflict resolution, and happiness, guided by values of innovation, inclusion and fairness. A new theoretical and practical paradigm must be adopted to drive the necessary structural reforms.

KDI leads in advancing research excellence and creating innovative knowledge through interdisciplinary research. The institute strives to improve policy, efficiency and quality through global cooperation and is dedicated to supporting the development and prosperity of Korean society. KDI plays a crucial role in shaping the nation’s future and advancing progress towards a brighter and more prosperous future.