Regionalism has become a liability in Korea, hampering national harmony and political stability. The regionalism finds its roots in several centuries back in history. The traditional regionalism was based on the provincial differences in cultural and social characteristics, and behavioral mannerism. Therefore, the traditional regionalism should be regarded as benign and common as in many other countries in the world. The modern version of Korean regionalism seems to be founded on the "discriminatory" treatments of Honam provinces in economic policy and the resultant regional economic disparity during the last three decades. Many believe that such "discriminatory" policy had been enforced during the period of the "third" and "fourth" republics under the influence of the key government officials and presidents form the Southeastern provinces. Since the early 80s, many public investment projects have found its home in the Honam region with the consideration of regional balance and more equitable distribution. This paper attempts to elucidate on various causes of regional disparity amplified during the period of industrialization, and also presents the economic indices which demonstrate the impacts of the policy in narrowing the economic disparity among the regions in recent years. The paper also clarifies the limits of regional economic policy in achieving regional. balance and consequently social integrity. The last part of the paper attempts to clarify the effective domain of regional policy and the new direction of regionalism.cy and the new direction of regionalism.