2011, Vol.20, No.2

Journal of Regulation Studies 2023 KCI Impact Factor : 0.78

pISSN : 1738-7132
https://journal.kci.go.kr/ksrs2002

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.

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.

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.