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  • P-ISSN 2586-2995
  • E-ISSN 2586-4130
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KDI Journal of Economic Policy. Vol. 39, No. 4, November 2017, pp. 51-68

https://doi.org/10.23895/kdijep.2017.39.4.51

× KDI Open Access is a program of fully open access journals to facilitate the widest possible dissemination of high-quality research. All research articles published in KDI JEP are immediately, permanently and freely available online for everyone to read, download and share in terms of the Creative Commons Attribution 4.0 International License.

Economic Effects of Regulatory Reform in Korea

Jungwook Kim; Subok Chae

Author & Article History

Manuscript received 12 August 2017; revision received 23 August 2017; accepted 23 November 2017.

Abstract

This paper adapts the World Bank Regulatory Quality Index (RQI), which is produced annually to provide a better understanding of the effects of regulatory reforms, instead of the Production Market Regulation (PMR) indicators, which are published every five years. We find that 9.9 to 36.0 billion USD worth of regulatory cost could be reduced if the regulatory quality in Korea improves to the level of the OECD average considering that the total burden of regulation in Korea is estimated to range from 2.2 to 357.4 billion USD. The estimated reduction in the regulatory cost accounts for roughly 0.76 to 2.47% of Korea’s GDP in 2013, underscoring the importance of regulatory reforms for the Korean economy. This paper introduces a new method with which to examine the distribution of regulatory costs across different industries and firm sizes. This alternative method is largely consistent with the conclusions reached by other studies, specifically that small firms typically bear a disproportionate regulatory burden.

Keywords

Regulatory Quality Index, Regulatory Reform, Economic Impact Analysis

JEL Code

K20, L25, O43

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