Is Port Authority the Best Choice of Korean Port Reform?

In response to insurmountable pressure for a broad distribution of political power between the central government and local governments, the Korean Government pushes for the establishment of the local port authority as the optimum choice to achieve its goal. Starting with the Pusan and Incheon ports, the local port authority system is expected to setout the dramatic change in port management system throughout the Korean ports. However, this paper points out that the port reform choice should take into account the specific features of the society and country and some basic questions should be clearly answered beforehand. The fundamental questions are: whether institutional reform will markedly improve the ports managerial and operational efficiencies? and what will be the benefits and costs, compared to those of not changing? Without rigorous and comprehensive analysis on these issues in the institution transition, haphazard port reform will have the possibility to increase port users costs and disrupt the efficient port services. Experiences around the world clearly show that the indiscriminate copy of port reform found in other countries may be neither feasible nor practical presently in Korea. They also indicate that the port reform should be made on a gradual basis with full control of the pace.