This study suggests an integrated and efficient strategy for to better manage the public funds in Korea. It specifically deals with the Public Fund Management Fund (PFMF). The PFMF was created in order to increase revenues to cope with growing fiscal needs, to improve the system used to manage public funds in general and to restore a proper balance between government spending and finance by minimizing policy finance. The integrated and efficient management of public funds requires the reinforcement of the control over these funds through reform and the improvement of the overall public fund system. This involves the rational readjustment of the currently rather arbitrary standard used to distinguish public funds from the rest, as well as the continuation of the current task of integrating similar funds together in order to simplify the fiscal assistance system for the agricultural sector.
The efficient management of the PFMF will require the following changes. First, all the public funds, in principle, should be required to make mandatory deposits of surplus capital. Second, the budget authorities should be given systematic institutional and organizational tools so that they can intervene more actively when determining the amount of surplus capital that each public fund should hold. Third, the surplus capital of pension funds should be managed in separate accounts to enhance the fairness of the intergenerational distribution of burdens and also to improve the security of the pension finance. Fourth, new ways should be found to make use of the specially accounted surplus capital. Sixth, the interest rate applied to the Special Account for Mortgage Loans, reserved for fiscal investment and loan projects, should be overhauled in order to improve the return on the account.
The integrated management of public funds can also enhance the government’s ability to control and adjust the business cycle. To this end, however, the government should gain the ability to ensure greater elasticity in deciding the amounts of special fiscal deposits and compensation funds to be administered and executed. The decision-making power of the budget authorities should also be enhanced to enable them make appropriate budget preparatory decisions.
공공자금의 통합관리 및 효율적 운용방안(Integrated and efficient management of public funds)
|Series Title; No||정책연구시리즈 / 95-02|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||KDI; KDI School|