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Economic Effects of Regulatory Reform in Korea

Author

Listed:
  • Kim, Jungwook
  • Chae, Subok

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.

Suggested Citation

  • Kim, Jungwook & Chae, Subok, 2017. "Economic Effects of Regulatory Reform in Korea," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 39(4), pages 51-68.
    • Handle: RePEc:zbw:kdijep:200815
    DOI: 10.23895/kdijep.2017.39.4.51
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    References listed on IDEAS

    as
    1. Simpson, R. David, 2014. "Do regulators overestimate the costs of regulation?," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 5(2), pages 315-332, June.
    2. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, April.
    3. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Regulatory Quality Index; Regulatory Reform; Economic Impact Analysis;
    All these keywords.

    JEL classification:

    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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