Public Private Partnership in Development: Lessons in Devising Legal and Institutional Framework from South Korea

Abstract

Public Private Partnership (PPP) is collaboration between public and private sectors in public service delivery as an alternative solution to the ever-increasing challenges in public service delivery. The success of implementing PPP around the world has been an attractive alternative for procuring public service works to the private sector. Establishing an enabling legal and institutional environment is the basic precondition to establish PPP arrangement in the development process. Accordingly, this study focuses on assessing international best practices as to how rapidly developing countries involve the private sector in their respective development process. This study takes the case of South Korea. Document review method was employed to assess how South Korea institutionalized PPP as part of its development strategy. Some selected government policy-documents, book chapters and articles are collected and consulted to finalize this study. The findings of this study reveal that the legal and institutional systems organized in South Korea are well established. Act on PPP and its Enforcement Decree constitute the major legal framework. Agencies like Ministry of Strategy and finance (MOSF) and Private Infrastructure Investment Management Center (PIMAC) represent institutional frameworks that can be taken as best practice for developing countries. Though most special government support schemes are introduced, some of the components, such as Minimum Revenue Guarantee (MRG) and allowing public property to private partners to use it free of charge, may be adopted with its appropriate controlling mechanisms. Hence, getting lessons from the experiences of South Korea with careful investigation of specific issues and contextualization of objective conditions in developing countries is warranted.

KEY WORDS: Public, Private, Partnership, legal framework, institutional framework, development, PPP