Regulatory budget aims at achieving rational allocation of resources by putting a cap at regulatory costs and constraining agencies from issuing ineffective regulations. Thus regulatory budget is theoretically considered as a powerful tool or regulatory reform. Nevertheless, there has been no public debate on Regulatory budget theoretically neither practically in Korea. This study aims at searching the applicability of regulatory budget on the basis of a question of why application of regulatory budget has failed despite its merits.

This study examines the applicability of regulatory budget by using five disputed points(exclusion of benefit estimation, problems related to cost estimation, conditional selection of policy instrument, decision of proper size of budget, additional cost) as an analytical framework.

We found that except exclusion of benefit estimation, all disputed points could be regarded as technical problems in implementing the regulatory budget and identified as solvable problems. We also found that exclusion of benefit estimation has been at the center of application of regulatory budget and regarded as a selective problem of regulatory value between efficiency and equality. This results suggest that programs or institutions for regulatory reform be designed to strike a balance between efficiency and equity.