Who pays the price of proving everything to everyone?

Kim Hyun-cheol

The author is a professor at Yonsei University College of Medicine and director of the Institute for Population and Talent.

When I was teaching at an American university, I planned to spend one summer in Korea. A Korean university where one of my co-authors worked invited me to stay for three months as a visiting researcher. The professor who invited me jokingly told me to prepare myself. I soon learned why.

An email from the university listed 12 documents that an unpaid visiting scholar had to submit. I was asked to consent to a background check for sexual offenses and complete training on human rights and gender equality. The contrast with Hong Kong and the United States, where a resume and recommendation letters had sufficed when I was hired as a professor, was striking. Complaining would only have burdened staff members who were following regulations, so I simply canceled the visit.

That was only the beginning. After returning to Korea, such experiences became routine. One government ministry asked me to submit proof of employment, certificates showing enrollment in national insurance programs, my diploma and records of my career history for a two-hour lecture. I declined.

Eventually, I hired an administrative assistant solely to handle such tasks. People like me, who can outsource the burden, are fortunate. The real victims are those who must suspend work simply to obtain a document. The burden of proof falls most heavily on the vulnerable.

Some may ask what is wrong with requiring certificates. Surely such procedures are necessary to prevent fraudsters from teaching with fake credentials or winning projects dishonestly. Yet the cost of verification must also be considered. Economists call this transaction cost.

Someone must issue every certificate, someone must review it and someone must store it. Across the country, hundreds of thousands of such transactions accumulate every day, though their cost appears on no balance sheet. Distrust creates invisible expenses.

The problem extends far beyond academia. As a development economist, I once conducted research projects in Ethiopia. A Korean aid agency required every local receipt to be scanned and the originals shipped to Korea. We even hired an employee solely to process paperwork.

Young researchers who had traveled abroad to help distant communities spent much of their time handling accounting documents. When the receipts were finally shipped to Korea, customs officials at Incheon International Airport flagged the cargo. Twenty boxes filled with receipts looked suspicious.

The demand for proof persists in everyday life. Last winter, I visited a municipal sledding park with my children. To receive a discount for large families, I presented the government-issued card proving our eligibility. The employee asked instead for an official family relations certificate.

The reason is easy to guess. Someone must have used such a card to bring another family's child. To catch that one person, every visitor became a suspect. We instinctively distrust citizens and place the burden of proving innocence on those under suspicion.

Yet dense layers of verification do not necessarily catch wrongdoers. Professional subsidy fraudsters often navigate complicated regulations with ease. Those who bear the heaviest burden are usually ordinary, law-abiding people.

The people who designed these rules were not villains. Good intentions, if poorly executed, can still entangle citizens. Korea's antigraft law, commonly known as the Kim Young-ran Act, illustrates the point. The law has reduced lavish entertainment culture and improved transparency in government and academia. At the same time, lectures, newspaper columns, consulting work and public discussions have become subject to reporting requirements and payment ceilings. Intellectual exchange itself has increasingly become entangled in administrative procedures.

Economists regard trust not as a moral virtue but as capital. Invisible though it may be, trust is social infrastructure. Without it, transaction costs rise sharply.

A 1997 study by Stephen Knack and Philip Keefer found that countries in which the share of people agreeing that “most people can be trusted” was 10 percentage points higher enjoyed annual growth rates roughly 0.8 percentage points greater.

This does not mean all paperwork should disappear. I learned that lesson myself. Contracts align expectations and prevent disputes. Experiments in behavioral economics have shown that well-designed agreements and compensation systems can signal fairness. People work harder when they believe they are being treated fairly.

The difference is important. Certificates reflect suspicion about the past, while contracts embody promises about the future. Regulators should ask whether the documents they demand are based on distrust or designed to build trust.

What, then, should be done? Governments should avoid demanding the same proof from everyone. Areas involving human life or large public budgets require strict oversight, but routine administrative matters and small contracts could rely more on penalties after violations occur. Agencies should stop asking citizens for information they already possess, and regulations themselves should be periodically reviewed instead of accumulating through inertia.

A good doctor does not order every possible test because each examination carries costs and burdens. The same is true of a good state. It is not one that demands everyone prove everything, but one that verifies carefully where needed and trusts citizens everywhere else. Social trust remains the most effective prescription for strengthening both individuals and society.