Contractual Factors of Executive Agencies in Korea: The Working Mechanisms

Abstract

This article investigates the working mechanisms of contractual factors in public organizations by analyzing what determines the level of contractual factors of executive agencies in korea. An executive agency is an entity tasked with carrying out specific functions within a government department(referred to in this article as an overseeing department). The overseeing department functions similarly to a principal in a standard business contract, and the executive agency functions similarly to an agent. Elements of the contract between them can be considered contractual factors. This study focused on three contractual factors-operational autonomy, performance evaluations, and pay for performance-and evaluated the level of each based on data from 44 executive agencies in Korea. An ordered logistic regression of each contractual factor was conducted on the variables associated with the characteristics of an overseeing department and an executive agency. The regression found that the characteristics of an overseeing department and its relationship with an executive agency, as well as the characteristics of the executive agency, relate to the level of contractual factors. This result shows that an overseeing agency affects the level of contractual factors and thus ahs a major impact on performance.