Differences on Excessive Profit Recapture System of Korea and Vietnam in New City Development Project and Its Impact

서지정보

· 발행기관 : 한국지역개발학회
· 수록지 정보 : 한국지역개발학회지 / 36권 / 3호 / 203 ~ 224페이지
· 저자명 : 임현성, 최진희, Ghazi Kablouti

초록

The aim of this study is to identify the differences in the excessive profit recapturesystems, generated by new city development through the conversion of land from agriculturalto urban use, and how these systems influence the development market in Korea and Vietnam.
In rapidly growing economies, converting agricultural land for urban development is essential.
Legal administrative actions converting agricultural to urban use can increase land valuewithout investment of production factors, thereby generating excessive profit. Such profits areconsidered unearned income and should be recaptured for public benefit. This study examineshow excessive profit is recaptured in both countries. The study employs a comparative lawmethod to examine the recapture systems of both countries, selecting four key laws: theConstitution, the Urban Development Procedures Law, the Land Compensation Law, and theInvestment Law. The results indicate that Korea adopts a public development model,designating public institutions as developers to recapture excessive profit. Public developersare granted legal authority to forcibly acquire agricultural land at its agricultural value, convertit to urban use, and sell it at urban land value after infrastructure is constructed. The differencein value between agricultural and urban use is utilized to install infrastructure, with theremaining excessive profit retained by the public developer. In contrast, Vietnam primarily designates private entities as developers through bidding processes and imposes land lease fees to recapture the profit. While private developers acquire land development rights, they are not granted the right to expropriate land. Instead, they pay land lease fees to the government based on urban use value, which enables the recapture of excessive profits. The fundamental reason for this difference lies in the disparity between the land ownership systems in the two countries. While Korea allows private land ownership, Vietnam operates under a collective public land ownership system, where the government allocates land use rights on behalf of the entire population. Consequently, this difference in land ownership systems has become a key factor in shaping the respective recapture systems in Korea and Vietnam. It has also influenced the characteristics of developers in the new city development market, with Korea favoring public developers and Vietnam leaning towards private developers.

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