Ministry Of Strategy Research Articles

Integrity, CEO Compensation, and Performance: Evidence from Public Enterprises in South Korea

Purpose: The purpose of this paper is to analyze perceived integrity of public service users and public enterprise employees in association with public enterprise performance, and the role of the CEO compensation on the association between perceived integrity and public enterprise performance.
 Design/methodology/approach: This study uses publicly available performance evaluations and CEO compensation disclosures by the Ministry of Strategy and Finance (MOSF) in South Korea and integrity assessments by the Anti-Corruption & Civil Rights Commission of Korea from 2014 to 2017.
 Findings: We find a positive association between integrity and public enterprise performance, a result driven by the positive association between integrity perceived by service users and public enterprise performance. Furthermore, higher monetary compensation paid to CEOs has a negative influence on the relationship between integrity perceived by public service users and public enterprise performance, whereas higher compensation paid to CEOs has a positive influence on the relationship between integrity perceived by employees and public enterprise performance.
 Research limitation/implications: Integrity perception might be subject to bias depending on the type of stakeholders (public service users or public enterprise employees). Thus, information users of public enterprise performance reports need to be aware of perception gaps in relation to multi-faceted aspects of public enterprise performance. We provide insights into the relationship between perception of integrity and public enterprise performance of the government bodies who enact and administer laws and public policies.
 Originality/value: This paper captures how the perceptions of integrity, as assessed by diverse stakeholders with differing perspectives and levels of honesty and transparency, influence public enterprise performance assessments. Furthermore, it extends the findings of prior studies on the impact of monetary compensation in the public sector (see Abner et al. 2017; Boyd et al. 2018; Chen and Hsieh 2015, among others) to confirm how CEO monetary compensation impacts the relationship between integrity and public enterprise performance. In the public sector, the extrinsic motivation of higher CEO monetary compensation relative to other public enterprises generally crowds out prosocial motivation, which, in turn, impairs the relationship between external integrity and public enterprise performance. At the same time, higher CEO monetary compensation has an incremental impact on internal integrity in association with financial management performance. Thus, we suggest that public enterprises should pay close attention to the design of their current incentive systems for CEOs, place greater weight on prosocial motivation to manage external integrity, and emphasize skill-based monetary compensation to manage internal integrity. Lastly, using manually collected data sets of public enterprises provided by two independent government organizations in Korea, we increase the objectivity and generalizability of the findings of the few studies published on public service organizations in a single-country setting.

Is OCIO superior in asset allocation performance?

This study aims to empirically analyze the asset allocation capabilities of Outsourced Chief Investment Officers (OCIOs) in Korea. The empirical analysis used data from 35 funds that were evaluated by the Ministry of Strategy and Finance from 2012 to 2020. The results of the analysis are summarized as follows. First, this study found that funds that adopted OCIO improved their asset allocation performance. Second, the sensitivity between risk-taking and performance decreased for funds that adopted OCIO. Third, it is found that OCIO adoption improves a fund's asset management execution (tactical capabilities). This study has methodological limitations in which the methodology used in this study is not based on theoretical prior research, but on practical applications. However, considering the need to clearly analyze the capabilities of OCIO and the timeliness of the topic, this study is valuable and can provide meaningful information to funders who are considering adopting OCIO in the future.

Bureaucrats and Budgets in South Korea: Evidence for Hometown Favoritism

This article presents evidence that high-ranking public officials in the Ministry of Strategy and Finance in South Korea affect local budget allocation. Applying a regression model on a uniquely constructed panel dataset, I found that the growth rate of the per-capita National Subsidy, which is a subcomponent of the national budget susceptible to discretionary behaviors, increases approximately 7 percent in the hometowns of high-ranking bureaucrats. To validate these findings and address causality, I conducted a battery of auxiliary robustness checks, which yielded confirmatory results. This study also found that enhancing transparency in the budget allocation system can alleviate concerns about bureaucratic hometown favoritism, providing suggestive evidence of bureaucrats’ rent-seeking behaviors without government transparency.

The Impact of Management Performance Evaluation Rating Information on Management Efficiency in Public Enterprises

This study empirically verified the relationship between the management performance evaluation grade of public enterprises and management efficiency. Public enterprises disclosed by the Ministry of Strategy and Finance for management performance evaluation from 2015 to 2019 were analyzed, and those with a low debt ratio and operating cash flow ratio were excluded from evaluation.BR As a result of the analysis, the coefficient value of the public enterprise management evaluation grade showed a significant positive (+) value, indicating that the higher the management evaluation grade, the higher the management efficiency. Although the management performance evaluation is used as a management tool to achieve various policy objectives, such as a burden on the person being evaluated and conflict-inducing politics within the organization, it has a relatively high cost control effect such as work efficiency and financial budget performance, and it is well received in the management performance evaluation grade. This means that the improvement of the overall management process and the transparent and efficient operating effect of the accounting system prevail.

A Study on the Establish of Continuous and Long-Term National DISASTER Situation Scenario

Purpose: In this study, national disasters are defined as the occurrence of cascading disasters taking into account the temporal and seasonal situations, including social crisis conditions such as financial crisis, etc. and large-scale natural and social disasters that occurred in Korea in the past. Method: In order to establish national disaster situations, representative disasters and crisis situations that occurred in Korea were summarized, and national disaster situation scenarios were proposed according to time and situation. The damage caused by the establishment of national disaster situations is expected to be unpredictable. In particular, in the case of an economic crisis such as the IMF, the financial condition of the country is poor, so if cascading disasters occur and the disaster situation lasts for a long time, the government’s ability to support may be remarkably difficult. Results: Preparing for such a national disaster is to be able to effectively cope with similar disasters, and the organization of the National Disaster Countermeasure Headquarters was proposed to respond to national disasters. In order to respond efficiently and promptly to national disaster situations, the President should be the head of the headquarters, the National Assembly and the Ministry of Strategy and Finance should be composed of support groups, and the central government organization of 17 departments, 5 offices, 17 government offices, and the head of 17 municipal governments need to be operated as a working organization of the national disaster countermeasure headquarters. Conclusion: In this study, a situation in which the worst disasters occur continuously and in the long term was established, and the situation of national catastrophe was presented as an example. It is absolutely necessary to prepare for such a worst-case situation, and as climate change, social economy become more complex and diversified, and uncertainty about risks increases, it is believed to be helpful to strengthen national response capabilities.

조합의 재산귀속에 관한 연구 - 공동이행방식 공동수급체를 중심으로 -

After Enforcement Rules on the Operation of Joint Contracts was amended by Ministry of Strategy and Finance in Jan. 8, 1996, judicial opinions on how claims of construction costs shall belong to the partners of joint venture changed, but it was not clear. That is, if the parties express their intention to exclude the application of civil code provisions on the partnership-ownership, the claims of construction costs may belong to each partners separately. Subsequent judicial precedents did not come to a unified conclusion. In some cases it was concluded that the claims belonged to all the partners jointly, but in others it was not. In other cases of similar issues, while admitting that a joint venture is a civil partnership, obligations to return advance payment was settled separately by each partners. Contradictory precedents left the following questions: Is a joint venture a civil partnership? Is the legal nature of the civil code provisions on the partnership-ownership of partnerships compulsory or optional? In conclusion, can the claims for construction costs of joint ventures belong to each of the partners?<BR> Supreme Court en banc Decision 2009Da105406 decided May 17, 2012 made decisions that a joint venture is a civil partnership under civil code, and that the claims for construction costs of the joint ventures belong to each of its partners separately under special agreements of a contract for a construction work. But the Supreme Court Decision was not clear and still left the following problems; Which of the provision on partnership-ownership under civil code is interpreted as optional? Are these opinions generally applicable to a civil partnership? What does it mean that the attribution method on claims of a civil partnership can be laid down under special agreements of a contract for construction work?<BR> Experts in favor of the Supreme Court Decision say that it is based on the principle of freedom of contract. Opposite views, on the other hand, presuppose that the provisions of civil code, which define the method of belonging to the property of civil partnership, are compulsory. However, the specific solutions proposed by each opinion are various.<BR> The property of a civil partnership include everything with value as property. How this is attributed to partners is defined in § 271 (1) in part of Real Rights and § 704 in part of Claims. With regard to the relationship between the two articles, it is generally considered either that they duplicate one another or that § 704 is unnecessary. However, contrary to the opinion of the above theory, if § 271 (1) and § 704 can be assumed to have different meanings, § 271 could have the meaning of forcing only real right property to belong to partners, not all property of a civil partnership. So the attribution of claims of a civil partnership is determined by § 704. In short, the property of civil partnership as real rights is ruled by compulsory provisions on Partnership-ownership in Real Rights, the property of civil partnership as claims is ruled by a optional provision on Partnership-ownership in Claims.<BR> If such assumptions are allowed, the claims of a civil partnership, in principle, belong to the partners in accordance with § 704. However, if there are special agreements in the partnership contract that divide the claims of the civil partnership into partners, this implies the exclusion of § 704, so the attribution of the claims becomes as agreed by the partners. However, even if the special agreements exist in the agreement between the partnership and the third party, they do not define how the property of the partnership belongs. This is because matters related to the internal relationship of partnerships can be determined only by the terms of the partnership contract. These special agreements, in some cases, can only mean how third parties can implement their contracts.<BR> In conclusion, the meanings of Supreme Court en banc Decision in 2012 could be found as follows. First, as before, § 271 (1) is a compulsory provision. Second, § 704 is an optional provision. One of the cases where § 704 is applied is the construction costs of the joint venture. Third, the property of a civil partnership where § 704 is applied is different from that where § 271 (1) is applied. In addition, an opinion that makes clear that the legal nature of the joint venture is a civil partnership means the above conclusions are generally applicable to civil partnerships. However, care should be taken when reading the expression, “The claims for construction costs of the joint ventures belong to each of its partners separately under special agreements of a contract for construction work.” It means that partners own the claims for construction costs separately, not

Assessing the Effectiveness of South Korea’s Development Assistance in Vietnam

South Korea’s development assistance has become an important resource in facilitating Vietnam’s socio-economic development and contributed to infrastructure establishment, agricultural and rural development, as well as hunger eradication and poverty reduction in Vietnam over the past 25 years. By adopting indicators proposed in the Busan Partnership Agreement and OECD’s DAC criteria, desk study and in-depth interviews, the paper assessed the effectiveness of South Korea’s development aid in Vietnam at three levels: nation, donor and project level. The results show that at both national and donor levels, South Korea’s ODA in Vietnam is successful and effective in terms of aligning objectives of both sides, facilitating engagement of private sectors, supporting a forward-looking vision, providing public and up-to-date information, and applying effective international methods to monitor and evaluate ODA projects. At project level, the QCGH project of KOICA has proved to be relatively successful especially in terms of relevance and impacts. The paper also pointed out shortcomings of South Korea’s development at national and donor levels with a focus on disbursement of development aid, the use of Vietnam’s financial system, strictly binding conditions and limited inclusive cooperation between South Korea and Vietnam in assessing the effectiveness of South Korea’s development aid. At project level, the shortcomings lied mainly under efficiency, effectiveness and sustainability indicators. Based on evaluation of South Korean’s aid performance and effectiveness in Vietnam, the paper drew out some implications to strengthen South Korea’s development aid effectiveness in Vietnam in the future. &#x0D; Keywords&#x0D; Aid effectiveness, Vietnam, South Korea, development aid, development assistance&#x0D; References&#x0D; &#x0D; [1] Department of Planning and Investment of Quang Binh province, Report on ODA attraction, management and utilization and loans in the period 2011-2015 and orientation to attract ODA and loans for the period 2016-2020 of Quang Binh province, 2015. [2] EDCF 2015. EDCF Annual Report. Seoul: Economic Development Cooperation Report [3] JICA, New JICA Guidelines for Project Evaluation: First edition. Tokyo: Japan International Cooperation Agency, 2010.[4] KOICA. Ex-Post Evaluation on the Project for the Establishment of the Central General Hospital in Quang Nam Province, Vietnam. Gyeonggi-do: KOICA, 2014.[5] KOICA, KOICA Annual Report 2016. Gyeonggi-do: KOICA, 2016.[6] Ministry of Strategy and Finance of South Korea and Ministry of Foreign Affairs of South Korea, 2014 Korea’s Official Development Assistance White Paper: Opening a New Era of Happiness for All Humanity, Seoul, Ministry of Strategy and Finance of South Korea, Ministry of Foreign Affairs of South Korea, 2014.[7] OECD, Evaluating Development Co-operation: Summary of key norms and standards, OECD, 2010.[8] OECD &amp; UNDP, Making Development Cooperation More Effective : 2014 Progress Report, OECD Publishing, 2014.

Investment Climate in the EAEU and Korea's Entry Strategy

This study proposes to lay the foundation for economic cooperation and expand industrial cooperation. The following four measures are the keys to create an institutional base for economic cooperation. First, it will be critical to conclude a Korea-EAEU FTA. Such an FTA would provide a new concept for strategic cooperation in the so-called value-chain system, as well as in the new Eurasian growth space. It will be a window of opportunity for the Eurasian region to establish significant links with Korea, and to bring the APEC region closer to Russia. Second, utilizing the Korea-Russia platform when entering the EAEU market is an important element. The Korea-Russia platform created in 2013 has not been utilized at all up to now. Through discussion with Russia, it will be necessary to adjust the destinations, industries, methods, and scope of cooperation to employ the platform. In this way, the platform can be expanded and become more useful and effective. Third, designing package support programs for SMEs is another significant measure. Overseas by SMEs will be important in building a foundation for cooperation with the EAEU when considering the economic complementarity of the two sides. Such collaboration is possible due to the EAEU’s demand for modernization in its manufacturing sector. Job creation and competitiveness improvement could be realized through the sophistication and internationalization of Korean SMEs. Fourth, it will be necessary to establish a school for Eurasian policy. When the agenda of strengthening cooperation with Russia and the countries is incorporated into Korea's mid- and long-term international strategy, it will become an urgent task to build a human resources nurturing system. Thus the founding of such a graduate school should be seriously considered. Given Russia's growing political and economic presence in the international community, it is necessary to train elite talent to deal with issues regarding the EAEU. In order to lay the institutional foundation, a close cooperation between the two sides is significant, perhaps by reorganizing or newly launching channels under the governments. Also necessary will be an organization that is mainly dedicated to Eurasian issues. Most importantly, embarking on negotiations for a Korea-EAEU FTA should come first to promote between Korea and the EAEU. Members of the EAEU think that the Korea–EAEU FTA has to extend beyond the scope of conventional FTAs. Bilateral industrial cooperation stimulated by Korea's must be included and enhanced. To enable Korea-EAEU FTA negotiations to commence, an investment promotion committee should be formed and the needs of EAEU member states must be discussed. At the same time, it will be necessary to establish a northern cooperation fund which supports SMEs to enter the EAEU market under the Ministry of Strategy and Finance. The positive effects that a Korea-EAEU FTA would have on should be communicated through a number of regular forums. Constructing industrial zones and discovering the promising sectors in the EAEU will have to take place as well. In particular, industrial complexes jointly planned by the two sides will help Korean enterprises to enter the EAEU market. For this, additional studies on the conditions of possible industrial zones and specialized industries should be carried out. Investment promising sectors have to be detected through an analysis of industrial competitiveness, policies and climate.

국외근로자 비과세제도 개선방안 연구 : 국제선항공승무원을 중심으로

Since the tax-free system for overseas laborers was implemented in 1974, the tax-free limits of international air crew, overseas construction workers and crewmen of deep-sea fishing ships and ocean-going ships had been identical by 2005, but there are big differences, currently. The Ministry of Strategy and Finance pointed out the poor working environments and international competitiveness of the industries to explain the reason for the differential tax-free limit. From this perspective, the fairness of the tax-free system for overseas laborers was analyzed. This is an empirical study, based on the objective fact. The study finding showed that international air crew were working in the structural flight work environments to threaten the right of health due to jet lag and excessive exposure to high-altitude cosmic radiation. Therefore, it was analyzed there should be a proper system reform to apply the tax-free limits to international air crew which are identical to those applied to overseas construction workers and crewmen of deep-sea fishing ships and ocean-going ships, for a fair taxation.

The effect of foreign pressure on liberal policy autonomy: the case of South Korea’s screen quota system

This study analyzes the major trade talks on films between South Korea and the US since the mid-1980s. It starts from the puzzle that South Korea could successfully maintain its screen quotas until it decided to cut them by half in 2006. The study argues that South Korean chief negotiators have used the US pressure to cut screen quotas as leverage in bilateral talks. This proves the point that heightened foreign pressure can enhance the policy autonomy of domestic chief negotiators, by consequence if not by design. Amid the US pressures to scrap the screen quotas, inter-ministry frictions arose among the Ministry of Strategy and Finance (formerly the Ministry of Finance and Economy), the Ministry of Culture, Sports, and Tourism (formerly the Ministry of Culture and Tourism), and the Ministry of Foreign Affairs (formerly the Ministry of Foreign Affairs and Trade). While bureaucrats from the Ministry of Culture, Sports, and Tourism have tenaciously adhered to a preservation of the screen quotas, those from the Ministry of Foreign Affairs have continuously cast doubt on this protectionist policy. On the other hand, bureaucrats from the Ministry of Strategy and Finance, far from the other two ministries’ consistent preferences, have altered their actual policy preferences with respect to the screen quotas in the same period. A key goal of this study is to test the following statement: the greater the US pressure to cut the screen quotas became, the wider the range of policy autonomy South Korean chief negotiators would exercise.

What Does the Korean Medical Association Need to Talk About?

What Does the Korean Medical Association Need to Talk About?

Korea's Monetary Policy Responses to the Global Financial Crisis

The Korean monetary authorities have implemented several policies on inflation, foreign exchanges and capital flows during and after the global financial crisis. The inflation target has been missed during the global financial crisis, as the Bank of Korea (BOK) was more lenient to supply shocks’ inflation in order not to impose the additional contractionary pressures on the economy during the global financial crisis. The Ministry of Strategy and Finance and the BOK tried to sustain the exchange market to be available for the public and to prevent the currency crisis. The monetary authorities have succeeded in preventing the currency crisis, but it is hard to say that the exchange market has been stabilized during the global financial crisis. The monetary authorities have imposed three macroprudential measures in order to prepare for the sudden stops. Those measures were not effective on reduction the volatility in the financial markets however they seem to have effect on the capital flows and lengthening the banks foreign debts.

Management Improvement of Contract Laws and Regulations for Public Sector Projects

Due to rapid changes in today's construction industry, the need for modification of laws and regulations has increased. First of all, the Ministry of Strategy and Finance of the Republic of Korea plans to modify contract laws and regulations for public sector projects. A thorough and comprehensive investigation of the US construction industry concerning the public sector will help the Korean construction industry make strategic plans toward amendment of laws and regulations. The primary purpose of this research is to investigate the project delivery method and contract administration systems for public sector projects of the US construction industry and to propose some suggestions to improve the current systems as found in the Korean construction industry. Through this investigation, various promotional issues as well as obstructions were identified by considering the differences in market conditions between the US and Korea. Frameworks of the suggestions provide for a consistent process of reinforcement of the owner's responsibility, and fair competition among construction companies.