These funds procured by the ministries are intended for use in contracting for research projects according to their own needs. Open bidding is the official procedure for the contracts, and the market is to be open not only to public think tanks, but also to any capable research organization, including those affiliated with the chaebol and with universities. It is generally acknowledged that the public think tanks are better equipped competitively than are the private or university research institutions, especially in the policy-oriented research that public think tanks specialize in. They also have close ties with the ministries, and have accumulated substantial intellectual capital for that use. Moreover, a certain portion of government research projects cannot be entrusted to private institutions for reasons of objectivity.
Private institutions have certain advantages too.
Their organizational structures are more flexible, and they can often procure detailed production or market information with ease. Moreover, their managerial advantages mean that they are usually more cost-effective. On the other hand, research institutions affiliated with universities can employ graduate students as research assistants, which allows these institutions to reduce their labor costs. In theory, the aforementioned restructuring plan is expected to improve the cost-effectiveness of public think tanks, but it has several pitfalls. One adverse side effect is found in the designation of major research areas for individual institutions with the discretion of government authority.