These challenges require us to solve fundamental difficulties in governance system; the authoritarian state, citizen rights violations, inefficient business, feeble civil sector, corruption, and the powerful bureaucrats who directs the business and the civil society.
A strong civil society is an important element in a strategy of implementing meaningful democratic reforms and providing quality public services. Open, transparent, and participatory processes can play an important role in preserving or establishing social capital. Also these processes are important ingredients in the social development and in strengthening civil society. The government-led industrialization strategy has formed a government-dominant pattern of the social, political, and economic governance. The government has strategically led and even dominated over the society/market in order to enhance the catching-up process. And, therefore, pressure both from inside and outside for change made the modification of the traditional governance inevitable.
2. Government Policy for the Nonprofit Sector
Government policy is one of the most important factors in the development of NPOs because they have to carry out their activities within the legal framework set by government policy. Government's policy or attitude on nonprofit activity of private sector shows big difference from one country to another, depending on her cultural, social and political background. Despite of similarities in these backgrounds, government's policy can be much different from one another with different development or changes in social or legal environments. If nonprofit sector is acknowledged for its role in enhancing social welfare, government policy is supposed to help NPOs carry out their activities. But, at the same time, government policy is expected to prevent them from being abused or misused by special interest groups for their private benefits. From the perspective of Korea, the government policy on nonprofit organizations used to be as a regulator, rather than as a stimulator. Even though there was a supportive system for NPO activities, the main spirit of government policy has been to regulate private NPOs, considering them to be infringing on the government's role in pursuing nonprofit activity.
The basic issues, related to governments policy towards NPOs, can be classified into three; such as (i) the overall legal framework including protection for the right to associate, eligibility for nonprofit status, (ii) tax treatment of the NPOs and of contributions to them, and (iii) obligations to the public including restrictions on personal benefits and internal governance.
The laws and regulations governing nonprofit organizations greatly affect the contours and practices of nonprofit activities in every country. The extent on nonprofit activities in a particular country may also be influenced by the culture of giving and receiving, the religious tradition, and the economic situation. However the nonprofit laws and regulations are among the most important factors in determining the size and degree of nonprofit activities.
To understand the legal environment of NPOs, it may be helpful to see the legal system concerning laws related to NPOs as well general legal system within which the legal treatment of NPOs is rooted. It is important to create a legal space within which NPOs can function outside of the public sector, being protected from arbitrary government's action.
