Research Report
Ⅰ. BACKGROUND
○ According to the theory that a legal order is the condition of economic development, this research analyses the institution in respect of economic development in Korea.
Ⅱ. SUMMARY
○ The market institution has the function of establishing property rights, expediting the transaction of goods and services, circulating the information, and accelerating the competition. The intervention into the market by the government has the aim at making compensation for the market or taking back of the failed market.
○ The transportation, energy and environmental tax under the present Transportation, Energy and Environmental Tax Act(TEETA) in Korea is not really an environmental tax unlike the name of such tax. The carbon tax should be introduced into the environmental tax system and refunded to companies who execute successfully the emissions trading system or the voluntary carbon offsets.
Ⅲ. EFFECTIVE USAGE
○ Several steps in legal system should be adopted for the purpose of dealing with the market failure and government failure. For example, the steep rise in cabbage prices in Autumn this year on account of shortage from climate change shows the failed institution made by the government, which does not work well in the emergent situation. The rural community system should be restored as the alternative to the failed institution and market. Also, the trust fund should be adopted in the field of environmental response and liability. Furthermore the green belt system and compensation for insiders of the protected area in Korea should be supplemented for equity.