The Seoul Social Economy: A Study of Performance Measurement and Policy Evaluation


The performance of the social economy sector can be captured, not only by the direct achievements of each organisation, but also from the sectors spill-over effects. This implies an importance of mutual assistance, embedded in social organisations, such as sharing identity, trust, internal motives, reciprocity, and empowering each citizen’s capabilities, which are not easily nourished by the public domain nor self-interested individuals. It is truer in the case of Korea, where disintegrated social networks are is prevalent. From this perspective, we have carried out empirical testing to examine whether the social economy sector in Seoul really aids the promotion of residents’ happiness. Since the members of social economy organisations are assumed to have a tendency to work in the spirit of social integration and collective well-being, we hypothesise that a resident’s subjective well-being increases as the size of the social economy sector in the region increases. We find empirical evidence that favorably supports this hypothesis, using Seoul’s 2014 annual survey. In this test, the number of social cooperatives, certified social enterprises, village firms, and cooperatives actually in motion are used as proxy variables, representing the size of the social economy sector.

We have also reviewed the existence value of social economy organisations, and found that some organisations with objectives of providing quality social services believe they exist since other types of firms are not easily approachable, while organisationsleaning towards quality job creation want to identify themselves as being more effective than competingorganisations. The effectiveness of the social economy sector is believed to be derived from the democratic decision making process, innovation-friendly governance structure, intrinsic motivation, and easy access to supplementary resources in the region.

For the purpose of effective performance measurement, we note the significant differences in orientation, depending on their mission statement, and werecategorisesocial economyorganisationsinto 4 groups with 4 different problems; creation of quality jobs, work integrative job creation, relational social service provision, and regeneration of local communities. These differences are also aligned with 3 different dimensions of the degree of difficulty in terms of performance measurement, reciprocity vs. public interest, and effective time perspectives. We suggest that policy makers should focus more on social economy organisationsthat are pubic interest oriented, and have longer term perspectives, despite the fact that their performances are not easily measured. Our survey results demonstrate that our model framework is well suited for realities. For instance, groups with the objective of quality job creation should be evaluated in different ways; for instance by income increases of their members and the stability of their employment, firm democracy, and professional job satisfaction of their members.

We also provide a single comprehensive indicator built upon the weighted average of different performance measures, where weights are calculated using Naura Borda Counting Rules with a subjective evaluation of survey respondents. We also surveyed the most intriguing tasks of each group, and found that a lack of capital and poor size (in terms of quality job creation), productivity loss due to employment of less productive workers, like the disabled, and an insufficient public support system (work integration) were the most important.

Finally, we investigated the effectiveness of the current policies of Seoul city regarding the social economy sector and found that a significant change is taking place in the field; including more frequent contacts and communications between policy makers and field workers and among different field organisations. We also found that Seoul’s policies were more effective than similar policies of Central Government. Seoul’s policies were more communicative, more integrative and more participatory. Another important observation was that there was a significant mismatch between demand for and supply of policy priority in terms of objective types. For instance, we found that quality job creation is more important than the other objectives, such as local community regeneration objectives which has been prioritized by the city government, but the former objective is less represented in the Seoul policy framework.



01 Theoretical Background


02 Socio-economic Problems of Seoul and the Social Economy Sector


03 The Role of Social Economy Organisations and Categorising Their Performance


04 Analysis of the Relative Effectiveness of the Social Economy Sector


05 Indicators of Performance Measurement of Social Economy Organisations


06 Contributions of the Social economy Sector to Happiness: Empirical Analysis


07 Evaluation of Seoul Policies Regarding the Social Economy Sector


08 Policy Implications of the Research





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