The Roh administration, participatory government, has pursued deconcentration policies for promoting the balanced national development since 2002. The main policy instrument of the deconcentration policy is that the transferring of public institutions from capital region to local areas. However, it has been argued that these policies have resulted in another problems of policy side-effects, for instance, decreasing the national competitiveness. This paper aims to explore the problems of side-effects of deconcentration policies based on the Systems Thinking approach. On the Systems Thinking approach basis, this paper analysed the policy side-effects placed the focus on intended feedback loops and unintended feedback loops of the deconcentration policies.