The public library is the local centre and gateway of knowledge and information. Therefore, the library should be funded and operated by local government and the governing body will be responsible for matters of policy of the library. However, recently public libraries in Korea have faced enormous policy challenges such as the damage of its identity, outsourcing or contracting-out of management, and the general chaos of its administrative system. This paper aims to analyze the current level of infrastructure and policies of public libraries and to review the wrong path and the right path of library policies focused on establishing a library foundation and outsourcing library management in Seoul and Incheon.