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Safety Regulation of Passenger Ships and Principal-agent Problems - Focusing on Roles of the Designated Safety Managers -

  • Crisisonomy
  • Abbr : KRCEM
  • 2016, 12(1), pp.33-45
  • Publisher : Crisis and Emergency Management: Theory and Praxis
  • Research Area : Social Science > Public Policy > Public Policy in general

Tae-Hyeong Kwon 1

1한국외국어대학교

Accredited

ABSTRACT

Moral hazard of designated safety managers is considered as one of the key reasons for the Sewol Ferry Disaster in 2014. This study examined the underlying mechanism of the moral hazard problems among designated safety managers by applying the principal-agent theory. The moral hazard problem occur when there are the information asymmetry and conflicting interests between principal and agent. This study evaluated these issues by using a simple theoretical model and by examining various cases from media reports, and found that both types of principal-agent problems were widespread among designated safety managers. Based on the findings, this study suggested policy alternatives to resolve information asymmetry problems and conflicting interest problems regarding safety regulations of ferries.

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