Reestablishing the Criteria for Designating and Classifying of Public Institutions

Kwack Chae Gi

The Public Institutions Management Act of 2007 stipulates the criteria for designating and classifying of public institutions. Public institutions are classified into the three main categories of state-owned enterprises(SOEs), quasi-governmental institutions and non-classified public institutions by their number of personnel, asset size, and self-generated revenue ratio. The designation and classification of public institutions is of great significance because such action has an enormous impact on a range of aspects, including their governance structure and management system. But, there is still ambiguities in the criteria for determining which institutions to include in the scope of application and category. Within the public institutions, it is also difficult to demarcate the boundary between SOEs and quasi-governmental institutions, mainly because of ambiguities in distinguishing market from non-market activities. In particular, the criteria for designation and classification of public institutions in Korea do not coincidence with the conceptual framework provided by the System of National Accounts 2008. According to the 2008 SNA, to identify which non-market nonprofit institutions are treated as quasi-governmental institutions, conditions for control by government must be identified. And, to determine which enterprises are treated as SOEs, it is necessary to specify conditions for control by government and the concept of economically significant prices. It makes clear a set of indicators which can be used to determine whether the government controls quasi-governmental institutions and SOEs. It provides also 50% criterion as to the concept of economically significant prices. In order to resolve the existing problems in the designation and classification system, it is necessary to elaborate more precisely the notion of control of government which is the main criterion distinguishing the public and private sectors, and the notion of economically significant prices which is used for distinguishing between quasi-governmental institutions and SOEs.

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* 2021년 이후 발행 논문의 참고문헌은 현재 구축 중입니다.

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