Shifting ground for Korea’s two-party system

The author is an emeritus professor at Chung-Ang University and a columnist at the JoongAng Ilbo.
Korea's two-party system, a defining feature of its politics since democratization, is faltering. The conservative People Power Party (PPP) has lost much of its political weight, authority and appeal. Meanwhile, the liberal Democratic Party (DP), armed with 175 National Assembly seats and the full power of the presidency, has emerged as the most dominant ruling party since democratization. The question now is whether the DP will stand as the lone hegemonic force atop a scattering of minor parties. Few seem concerned with the PPP's future.

Some observers are asking whether the DP is entering a path of long-term rule akin to Japan's Liberal Democratic Party. If the party sweeps next year's local elections, will it cement its hold nationwide? Certain signals suggest that possibility. First is the PPP's continuing collapse. Second is the dominance of the DP's core base - those in their 40s and 50s in the Seoul metropolitan area - who now set the agenda in many sectors of society.
Yet there are also signs that the liberal party's rule may not remain smooth. Recent debates over capital market revitalization and tax reforms reveal discord between President Lee Jae Myung's pragmatic approach and the ideological rigidity of some party members.

The first "green light" for the party's continued dominance is the PPP's near-total paralysis. Since last year's martial law crisis, the party has stumbled into irrelevance. Its failure to participate in the crucial vote to lift martial law in December marked a turning point. Subsequent hesitation to fully break with former President Yoon Suk Yeol and his resistance to impeachment only deepened its isolation. Weakened and fragmented, the PPP now faces the risk of a takeover by the far right.
Over the longer arc of history, Korea's conservative parties once played leading roles through industrialization, democratization and globalization. But in the 21st century, they are struggling to adapt to new political currents - polarization, democratic instability and deglobalization. Their primary base is an aging generation nostalgic for the industrial era, while many lawmakers remain steeped in hierarchical, state-driven and authority-oriented political culture. This outdated mindset, when combined with the Yoon administration, culminated in the disastrous martial law episode.
Against such a backdrop, the DP's power can appear unassailable. But expansion brings internal frictions. A clear example is President Lee's early-term push for financial market development, symbolized by the "Kospi 5000" target. His plan combined reforming corporate governance through amendments to the Commercial Act - laying groundwork for potential changes such as easing the criminal liability of executives and introducing dual-class shares - with efforts to shift household assets from real estate to financial markets. These policies were broadly reasonable and aligned with global trends, while also appealing to the metropolitan 40s and 50s who make up the party's core support.
The initiative initially lifted the stock market and drew investor enthusiasm. Yet the effort has been clouded by intraparty disputes. Reform-minded DP Rep. Lee So-young introduced a plan to separate dividend income taxation, lowering the top rate from 49 percent to 25 percent, as part of broader market-friendly reforms. But DP Policy Committee Chair Jin Sung-joon and other hard-liners rejected the proposal, framing it as a tax cut for the wealthy. A subsequent debate over lowering the threshold for capital gains tax for major shareholders from 5 billion won ($3.6 million) per stock to 1 billion won further rattled markets. Online forums erupted with criticism that progressive hard-liners were undermining market confidence with outdated activist logic.

This may be only a preview of future clashes. Lee's hallmark pragmatism - encompassing large-scale A...