This study strives to help Korea find a better balance and arrangement of partnership between its public and private sectors, while tackling some of the misunderstandings related to the expansion and growing influence of the Korean public sector.
Until recently, economists’ main interests were limited to the economic analysis of the effects of the budget and the normative rules regarding tax revenue and spending. Relatively little theoretical or empirical research has been done on the public-private sector relationship, or other issues associated with the expansion of the public sector.
One of the most important aspects of postwar economic development, in both economically advanced and developing countries, is the sudden expansion of the public sector. The public tends to distrust the expansion of the public sector, viewing it as a manifestation of excessive and wasteful governmental intervention in the market. Popular criticisms of the public sector, however, are often based on false or misleading information and flawed theories. The purpose of this study is to address these perceptive and theoretical errors so as to help the Korean public and private sectors establish a better working relationship.
One misguided criticism that is particularly difficult to tolerate is the view that the expansion of the public sector has interrupted economic growth by exerting a negative influence on the supply of labor, savings, and investment. There are two historical facts directly refuting this claim. First, the public sector expanded at an unprecedented pace in the postwar period, particularly the 1950s, 1960s, and 1970s, in countries around the world. Not coincidentally, this was also a period of explosive economic growth in these countries. Second, although a few countries like Japan have managed to achieve fast economic growth with a relatively small public sector, we should not disregard the majority of examples, like France, that did require the help of public sectors for their economic growth. Economies around the world struggle with many issues, but we should not jump to the conclusion that all these issues stem from an overgrown public sector or failed economic policies. Instead of attributing blame for economic failures, the public and private sectors should focus on reinforcing themselves, and next on finding arrangements through which they may complement, and not compete, with each other.
공공부문의 팽창과 영향에 관한 소고(Reflections on the expansion and growing influence of the public sector in Korea)
|Journal Title; Vol./Issue||한국개발연구:vol. 4(no. 1)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < General|
|Holding||KDI; KDI School|