This study examines the trends of change in Korea’s financial scale and analyzes the determinants.
The Korean economy is faced with great changes, both domestically and internationally. The new government is advancing reforms for another economic leap forward, while pressure for market opening is increasing, and a borderless economy is being realized internationally. Under the circumstances, the financial sector should take the lead in investment to improve international competitiveness and stabilize Korean citizens’ livelihood.
In terms of direction for financial operation, the primary issue is how to distribute limited financial resources efficiently. Finances can be distributed to areas that satisfy most needs immediately, but efforts need to be made to resolve conflicts of interest between classes and sectors that can occur regarding finance distribution.
Unlike private corporations, public sector lacks inherent incentives for efficient production, so we can review methods to evaluate achievement and take the result into consideration for the distribution of financial resources to improve efficiency in budget execution.
It is also necessary to raise the government’s productivity significantly. The government should endeavor to increase productivity at all times, because its property rights are not strictly defined and it tends to be non-productive. This can be achieved by adjusting labor input between functions, making purchases more efficiently, and improving output within given budgets.
Through these efforts, Korea will be able to achieve faster economic growth through only a slight increase in the financial scale and a relatively lowered tax burden.
재정규모의 변동추이와 결정요인분석(Analysis on the trend of changes in financial scale and determinants)
|Series Title; No||정책연구시리즈 / 94-12|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < General|
|Holding||KDI; KDI School|