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2011, Vol.20, No.2

  • 1.

    A Study on Benefit Evaluation and Measurement of Regulatory Impact Analysis in Korea: with the Focus on the Benefit Overestimation Problem

    Tae-Yun Kim | 2011, 20(2) | pp.3~32 | number of Cited : 9
    Abstract PDF
    This study is a follow-up study of KimˑJungˑHur (2008). It tries to review analytically the actual quality level of the Regulatory Impact Analysis (RIA) statement in Korea, focusing on the benefit evaluation and measurement. By reviewing the literatures on the evaluation and measurement of benefit, this paper develops a theoretical framework. Based on the analytical framework, this paper analyzes 1,537 RIA statements from June, 2008 to October, 2011 (almost all of RIA statements submitted to Presidential Regulatory Reform Committee). Main results are as follows. First of all, only 87 (5.7%) cases of RIA statements out of all 1,537 total carry at least some objective information regarding benefit of the proposed regulation. Second, the 87 RIA statements show consistent overestimation of benefit to a remarkable extent. In particular, this result was possible mainly by too optimistic and groundless forecasts, especially on actual compliance. And with respect to discount rate, the distributional weight, and double counting, there are few RIA statements which satisfy the minimum theoretical requirements, resulting in arbitrarily consistent overestimation of regulatory benefit.
  • 2.

    An Evaluation of Public Enterprise Reform by Lee Myung-Bak Administration

    조성봉 | 2011, 20(2) | pp.33~68 | number of Cited : 3
    Abstract PDF
    Public enterprise reform of Lee Myung-Bak administration was designed with limited scale and impact by eliminating large and important public firms. Presumably the ‘candle demonstration' in the spring of 2008 and the following worldwide financial crisis provided the background of such small-scale reform. Emphasis on practical value and short-term result due to the lack of philosophy necessary for the public enterprise reform provide another factor. Privatization, sale of affiliated companies, functional rearrangement, introduction of competition and software reform such as adoption of annual salary system and salary peak showed poor performance while merge and shut-down of public firms as well as the layoff of public firms' employees showed good performance. The rapid increase in public firms' debt is another big concern while revising collective agreements of many public firms by confronting labor union with strict principle deserves positive evaluation. For the successful public sector reform we need to design road map for the long-term public sector reshuffling, actively drive public enterprise privatization and raise the autonomy of public firms as well as their responsibility through market discipline.
  • 3.

    A Study on the Effect of Environmental Regulation on Direct Investment of Korea

    이지연 | Han, Hyun Ok | 2011, 20(2) | pp.69~92 | number of Cited : 8
    Abstract PDF
    According to the pollution heaven hypothesis, strict environmental regulation weakens the competitiveness of firms in the country, forcing the firms to move to other countries with loose environmental regulation. This study explores how environmental regulation in foreign countries affects direct investment of Korea to those countries empirically. When all the countries are included in the analysis, we do not find strong evidence for supporting the pollution heaven hypothesis. However, only the non-OECD countries are considered, we find the pollution heaven hypothesis might hold in Korea.
  • 4.

    The Effects of Corporate Income Tax Cut Policy on Firm Values

    Lee Won Heum | 2011, 20(2) | pp.93~117 | number of Cited : 3
    Abstract PDF
    We identify the conditions of favorable improvement in corporate values when the corporate income tax rate is decreased, based on the traditional firm valuation model of Miller-Modigliani (1961). The condition shows that we need to estimate both the required rate of return on investment, generally known as the unlevered firm's cost of capital, and the levered cost of capital as well. We analyze the listed companies on Korea Exchange (KRX) during the period of 11 years from 2000 to 2010. The empirical results are summarized as follows; first of all, the corporate tax cut policy can have positive effects on firm values only to about 60% of the listed companies, on average, during the whole periods. And there are no significant differences in the positive tax cut effects regardless of the sub-periods, industry classifications and firm sizes. Second, it is also shown that the companies who satisfy the conditions to enjoy benefits from the tax cut did not significantly increase the investments in physical assets.
  • 5.

    Regulatory Policy Design and Policy Change: Case Study of Internet Regulatory Policy Target Groups’ Social Construction

    김동현 | PARK, HYUNG JUN | Lee,Yongmo | 2011, 20(2) | pp.119~149 | number of Cited : 6
    Abstract PDF
    Internet regulatory policy is becoming controversial policy area as Internet and Cyber-space rapidly influential to our society and life. Anonymity has caused many social problems in internet space. Therefore some groups advocate that government should regulate internet space and the other groups advocate still liberal policies to internet arena with self-regulation. Hence internet regulatory policies has changed without consistency in Korea government. In this paper, we argue that social construction of target group as regulatee is critical factor how to design internet regulation by government and their change of social construction make change internet regulations. We analyzed how to adopt a restrictive internet real-name identification regulation depends on target regulatee groups divergence and their social construction change. We can find the internet users are recognized as positive and innovative groups as public opinion maker in initial stage and policy designed to support and promote the internet usage. But they are divided and some groups have negative image after a series focused events. Government internet policy change from supportive policy to regulatory policy. In addition, we can find there are some gap between government officials and citizen’s cognition to target groups, it caused non-compliance to internet regulatory policy.
  • 6.

    A Study on the Regulations of Public Agencies in the Financial Sector

    이혜영 | 박장호 | 최성락 and 1other persons | 2011, 20(2) | pp.151~174 | number of Cited : 3
    Abstract PDF
    Lee Myeong Park's government has pursued regulatory reform since 2008, but many people think that there are too many regulations in the financial sector of Korea. In Regulatory Reform Committee, all the regulations of government are registered, and the registered regulations of the financial sector are only 7% of all regulations. But people think that regulations of the financial sector become increased. We assumed that the reason would be existence of agency regulations. Therefore, in this article, we tried to analyze the regulations of agencies in the financial sector. We analyzed 7 public institutions in the financial sector, and found 534 agency regulations in total. Officially, the registered regulations in the financial sector are 843, but there are 534 more regulations if we consider regulations of public agencies. It is necessary to think about regulations of public agencies when we seek to regulatory reform in the financial sector.