Publication: Private Participation in Infrastructure Projects in the Republic of Korea
Loading...
Published
2005-09
ISSN
Date
2012-06-20
Author(s)
Editor(s)
Abstract
In the aftermath of the 1997 East Asian financial crisis, the government of the Republic of Korea published a Private Participation in Infrastructure (PPI) Act to remove the main impediments to private investment in infrastructure sectors. The implementation of the Act was followed by a steady increase in the number of PPI projects, thus spurring the modernization of the main infrastructure facilities in transport, water, electricity, and telecommunications. Despite this progress, the Korean PPI market still faces critical challenges that are probably related to its nascent stage of development. The market is dominated by five construction and engineering firms, but lacks world-class project developers. At the same time, the procurement of PPI projects takes on average four years, and competition in tenders is limited. The number of unsolicited proposals is abnormally high, whereas the number of solicited proposals remains flat. The participation of foreign firms is very limited despite the size of the market and the number of projects awarded. Although local financing is available, the maturity of financing instruments does not exceed five years for most corporate papers, and 10 years for government bonds. This paper reviews the procurement of PPI projects in Korea and benchmarks it to international best practices before proposing options for its improvement.
Link to Data Set
Citation
“Noumba Um, Paul; Dinghem, Severine. 2005. Private Participation in Infrastructure Projects in the Republic of Korea. Policy Research Working Paper; No. 3689. © World Bank. http://hdl.handle.net/10986/8606 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication Climate and Social Sustainability in Fragility, Conflict, and Violence Contexts(Washington, DC: World Bank, 2026-01-07)Climate change is widely recognized as a driver of violent conflict, but its broader social effects remain less understood. Ignoring these dimensions risks a vicious cycle where climate policies might undermine socially just adaptation. Evidence is still limited on how climate shocks influence political participation, trust, or migration. This paper helps fill that gap by examining links between climate change, conflict, and social sustainability, with a focus on inclusion, resilience, cohesion, and legitimacy. Using secondary data from 2019–24, the study applies simple correlation-based methods to test three hypotheses on the nature, severity, and composition of these associations. The analysis combines multiple climate impact measures, new conflict classifications, recent social sustainability frameworks, and controls for population and geography. The results reveal strong correlations—not causation—between climate events and contexts of fragility, conflict, and violence. Climate impacts are most pronounced in both national and subnational conflict settings. The study also finds robust links between fragility, conflict, and violence and low levels of social sustainability, reflecting its role as both a driver and consequence of conflict. Some dimensions—such as violent events and insecurity—appear weaker in areas most affected by climate shocks. Two of the hypotheses are supported, and one remains inconclusive.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Institutional Capacity for Policy Implementation: An Analytical Framework(Washington, DC: World Bank, 2026-01-07)State capacity is an important prerequisite for policy implementation, yet at the country level it is difficult to measure, assess, and reform. This paper proposes a focus on institutional capacity: the ability of public institutions to implement the specific policy mandates for which they are responsible. Based on a review of existing literature, the paper defines the different dimensions that compose institutional capacity and groups them into two cross-cutting categories: organizational dimensions (personnel, financial resources, information systems, and management practices) and governance dimensions (transparency, independence, and accountability). The paper proposes measures for organizational and governance dimensions using existing data, shows intra-institutional variation of these measures within countries, and discusses how new data could be collected for better measurement of these concepts. Finally, the paper illustrates how the framework can be used to diagnose the sources of common problems related to weak policy implementation.Publication South Africa’s Fragmented Cities: The Unequal Burden of Labor Market Frictions(Washington, DC: World Bank, 2026-01-08)Using high-resolution administrative, census, and satellite data, this paper shows that South African cities are characterized by spatial mismatches between where people live and where jobs are located, relative to 20 global peers. Areas within 5 kilometers of commercial centers have 9,300 fewer residents per square kilometer than expected, which is 60 percent below the global median. Poor, dense neighborhoods are most affected. In Johannesburg, a 10-percentile increase in distance from the nearest business hub corresponds to a 3.7-percentile drop in asset wealth (a proxy of household wellbeing) and 4.9-percentile drop in employment. In Cape Town, the declines are 4.0 and 3.7 percentiles, respectively. Employment is 87 percent lower in the poorest decile than the richest in Johannesburg and 61 percent lower in Cape Town. These findings suggest that South Africa’s spatial organization of people and economic activity constrains agglomeration and reinforces inequality. This methodology provides a scalable and standardized data-driven framework to analyze spatial accessibility and agglomeration frictions in complex, data-constrained urban systems.Publication Investment in Emerging and Developing Economies(Washington, DC: World Bank, 2026-01-07)The world faces a pressing challenge to meet key development objectives amid slowing growth and rising macroeconomic and geopolitical risks. With the number of job seekers rising rapidly, infrastructure shortfalls continuing to be large, and climate costs mounting, the case for a significant investment push has never been stronger. Yet the capacity to respond in many emerging markets and developing economies has eroded. Since the global financial crisis, investment growth has slowed to about half its pace in the 2000s, with both public and private investment weakening. Foreign direct investment inflows—a critical source of capital, technology, and managerial know-how—have also fallen sharply and become increasingly concentrated, leaving low-income countries with only a marginal share. The risks of further retrenchment are significant, as trade tensions, policy uncertainty, and elevated debt levels continue to weigh on investment. Reigniting momentum will require ambitious domestic reforms to strengthen institutions, rebuild macro-fiscal stability, and deepen trade and investment integration—the foundations of a supportive business climate. At the same time, international cooperation is indispensable. A renewed commitment to a predictable system of cross-border trade and investment flows, combined with scaled-up financial support and sustained technical assistance, is essential to help emerging markets and developing economies—especially low-income countries and economies in fragile and conflict situations—bridge financing gaps and implement the domestic reforms needed to restore investment as an engine of growth, jobs, and development.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Auctions with Endogenous Participation and Quality Thresholds : Evidence from ODA Infrastructure Procurement(2009-03-01)Infrastructure projects are often technically complicated and highly customized. Therefore, procurement competition tends to be limited. Competition is the single most important factor toward auction efficiency and anti-corruption. However, the degree of competition realized is closely related to bidders' entry decision and the auctioneer's decision on how to assess technical attributes in the bid evaluation process. This paper estimates the interactive effects among quality, entry, and competition. With data on procurement auctions for electricity projects in developing countries, it is found that large electricity works are by nature costly and can attract only a few participants. The limited competition would raise government procurement costs. In addition, high technical requirements are likely to be imposed for these large-scale projects, which will in turn add extra costs for the better quality of works and further limit bidder participation. The evidence suggests that quality is of particular importance in large infrastructure projects and auctioneers cannot easily substitute price for quality.Publication Democratic Republic of São Tomé and Príncipe : Country Integrated Fiduciary Assessment, Volume 3. Country Procurement Assessment(Washington, DC, 2007-06)This Integrated Fiduciary Assessment is the first of its kind for Sao Tome and Principe. It combines the analysis and policy recommendations from a public expenditure review (PER), a country financial accountability assessment (CFAA), and a country procurement assessment review (CPAR). The goal of the report is to identify the major challenges facing the country in the prepetroleum era (the next three to five years) in public finance management (including public enterprises) as it attempts to implement its National Poverty Reduction Strategy (NPRS) with a tight resource envelope. This executive summary presents recent economic developments and fiscal sustainability analysis that takes into account petroleum and no-petroleum scenarios, with corresponding analysis on which of the Millennium Development Goals (MDGs) are reachable. The summary reports on revenue and expenditure performance since 2000-01, issues related to the implementation of the public investment program (PIP) and its coordination with the NPRS, and the budget process, including findings from the Health PER, which highlights a lack of allocative efficiency. The summary reports on the financial fragility of state-owned enterprises (SOEs) and the possible fiscal consequences for the central budget, especially regarding the implicit subsidies and tax breaks to (and the hypothetical tariff increases of) the electricity and water company. The summary of reports on the status of the public finance management system (budget preparation, execution, control, governance, and human resources) and the reform process that may address many of the concerns it rises. Finally, the summary presents the findings related to the procurement process, including the legislative and regulatory framework, institutional framework and management capacity, procurement operations and market practices, and integrity and transparency of the system.Publication Colombia - National Level Public Financial Management and Procurement Report : Status of the Public Financial Management and Procurement System(World Bank, 2009-06-30)This Public Financial Management Performance Report (PFMPR) analyzes the performance of Colombia's public financial management (PFM) institutions, systems and processes. It documents areas where performance is close to or follows international good practice, as well as opportunities to further enhance PFM contribution to the goals of strengthening fiscal discipline, enabling more efficient allocation of resources, increasing operational efficiency, and fostering transparency. It is expected that the identified opportunities will strengthen further the Government of Colombia's programs of continuous PFM improvement, as provided for under the National Development Plan pillar regarding a state at the service of its citizens: efficient and effective Government. The main challenges cited in the report could also be an important reference to future development plans and PFM reforms. Ensuring the sustainability and trajectory of PFM programs becomes even more critical in the context of public expenditure policies to deal with the current international economic crisis. The study is based on the 28 high-level indicators and 69 individual dimensions that compose the PFM performance measurement framework. Each indicator seeks to measure performance of a key PFM element against a scale from A to D. The highest score is warranted for an individual indicator if the core PFM element meets the relevant objective in a complete, orderly, accurate, timely and coordinated way, based on existing good international practices.Publication Alternatives to Infrastructure Privatization Revisited : Public Enterprise Reform from the 1960s to the 1980s(World Bank, Washington, DC, 2007-11)Frustration with the performance of State-owned enterprises (SOEs) has led to two rounds of reform: the first round, from the 1960s through the 1980s, attempted to improve SOE performance while maintaining public ownership while the second, beginning in the late 1980s, viewed privatization as the answer. Interest in the earlier round of reform has increased recently as controversy has slowed or halted privatization in many countries, especially for SOEs providing infrastructure services that are basic to everyday life and are thought to have elements of monopoly. This paper reexamines the earlier round of reforms, focusing particularly on efforts to increase the firms' capacity with infusions of human and physical capital, to strengthen managerial incentives through performance contracts and corporatization and to alter the mix of political and economic forces that impinge on the firm by strengthening the involvement of taxpayers, customers or private investors. The review suggests that these earlier approaches generated only modest success but that some of them, selectively applied, may be helpful in improving the performance of infrastructure firms that remain in public hands.Publication Political Accountability and Regulatory Performance in Infrastructure Industries: An Empirical Analysis(World Bank, Washington, DC, 2006-12)The aim of this paper is to empirically explore the relationship between the quality of political institutions and the performance of regulation, an issue that has recently occupied much of the policy debate on the effectiveness of infrastructure industry reforms. Taking the view that political accountability is a key factor that links political structures and regulatory processes, the authors investigate, for the case of telecommunications, its impact on the performance of regulation in two time-series-cross-sectional data sets on 29 developing countries and 23 industrial countries covering the period 1985-99. In addition to confirming some well documented results on the positive role of regulatory governance in infrastructure industries, the authors provide empirical evidence on the impact of the quality of political institutions and their modes of functioning on regulatory performance. The analysis of the data sets shows that the (positive) effect of political accountability on the performance of regulation is stronger in developing countries. An important policy implication of this finding is that future reforms in these countries should give due attention to the development of politically accountable systems.
Users also downloaded
Showing related downloaded files
Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Economic Shocks and Human Trafficking Risks(Washington, DC: World Bank, 2022-02-18)The report focuses on risk factors that are expected to increase the vulnerability to human trafficking from and within origin countries such as economic shocks, measured by large, discrete changes to export commodity prices and to GDP. It also explores the role that institutions play through enforcing the rule of law, providing access to justice, and implementing anti-trafficking policies, as protective factors that could weaken the link between economic shocks and an increase in human trafficking. The analysis verifies that economic shocks are significant risk factors that increase vulnerability to human trafficking. In origin countries, economic vulnerabilities, especially those caused by global commodity price shocks, are strongly positively correlated with observed cases of trafficking. For instance, the economic shock produced by a typical decrease in export commodity prices is associated with an increase in the number of detected victims of trafficking of around 12 percent. The analysis suggests that good governance institutions and particularly a commitment to the rule of law and access to justice as well as stricter anti-trafficking policies and social assistance can have a limiting effect on the number of observed cases of trafficking following economic shocks.Publication The Container Port Performance Index 2023(Washington, DC: World Bank, 2024-07-18)The Container Port Performance Index (CPPI) measures the time container ships spend in port, making it an important point of reference for stakeholders in the global economy. These stakeholders include port authorities and operators, national governments, supranational organizations, development agencies, and other public and private players in trade and logistics. The index highlights where vessel time in container ports could be improved. Streamlining these processes would benefit all parties involved, including shipping lines, national governments, and consumers. This fourth edition of the CPPI relies on data from 405 container ports with at least 24 container ship port calls in the calendar year 2023. As in earlier editions of the CPPI, the ranking employs two different methodological approaches: an administrative (technical) approach and a statistical approach (using matrix factorization). Combining these two approaches ensures that the overall ranking of container ports reflects actual port performance as closely as possible while also being statistically robust. The CPPI methodology assesses the sequential steps of a container ship port call. ‘Total port hours’ refers to the total time elapsed from the moment a ship arrives at the port until the vessel leaves the berth after completing its cargo operations. The CPPI uses time as an indicator because time is very important to shipping lines, ports, and the entire logistics chain. However, time, as captured by the CPPI, is not the only way to measure port efficiency, so it does not tell the entire story of a port’s performance. Factors that can influence the time vessels spend in ports can be location-specific and under the port’s control (endogenous) or external and beyond the control of the port (exogenous). The CPPI measures time spent in container ports, strictly based on quantitative data only, which do not reveal the underlying factors or root causes of extended port times. A detailed port-specific diagnostic would be required to assess the contribution of underlying factors to the time a vessel spends in port. A very low ranking or a significant change in ranking may warrant special attention, for which the World Bank generally recommends a detailed diagnostic.Publication Republic of Moldova Enterprise Access to Finance : Background Note(Washington, DC, 2013-06)The Government of Moldova is seeking to change the country's development paradigm and build an export-oriented economy characterized by investment, innovation, and competitiveness, following a decade of 'jobless growth'. This report focuses on improvements that will be needed to move Moldova to the next stage of development as envisioned in the Moldova 2020 strategy; however, reforms over the past decade also deserve acknowledgment. Improving the business environment is an especially important task, given Moldova's low levels of natural resources and small internal market. This study aims to identify the most pressing problems in the business environment that are adversely affecting Moldovan companies' productivity and competitiveness, and to present recommendations that would help remove these obstacles. The analysis is based on a review of existing reports; interviews with government officials, private sector associations, a sample of businesses, and some subject matter experts; as well as original research on access to finance. This study has identified that the following aspects of doing business are the most problematic: customs administration; tax administration; business regulation, consisting of licenses, authorizations, permits, and inspections; the competition framework; and access to finance. This report presents short-term (2013-2014) and longer-term (2015-2017) recommendations in each of the five priority areas.Publication Labor Market Experience and Falling Earnings Inequality in Brazil: 1995–2012(Published by Oxford University Press on behalf of the World Bank, 2021-03-25)The Gini coefficient of labor earnings in Brazil fell by nearly a fifth between 1995 and 2012, from 0.50 to 0.41. The decline in other measures of earnings inequality was even larger, with the 90-10 percentile ratio falling by almost 40 percent. Applying micro-econometric decomposition techniques, this study parses out the proximate determinants of this substantial reduction in earnings inequality. Although a falling education premium did play a role, in line with received wisdom, this study finds that a reduction in the returns to labor market experience was a much more important factor driving lower wage disparities. It accounted for 53 percent of the observed decline in the Gini index during the period. Reductions in horizontal inequalities – the gender, race, regional and urban-rural wage gaps, conditional on human capital and institutional variables – also contributed. Two main factors operated against the decline: a greater disparity in wage premia to different sectors of economic activity, and the “paradox of progress”: the mechanical inequality-increasing effect of a more educated labor force when returns to education are convex.