This paper discusses how to improve the legal provisions related to the designation of public institutions which are applied to the Act on the Management of Public Institutions (hereinafter referred to as the “Public Management Act”). In this regard, other country cases on the legislation and application of the management system of public institutions are reviewed,and Korea’s historical changes and experiences in the management system of public institutions are studied. The Public Management Act, enacted in 2007, stipulates that the Minister of Strategy and Finance may designate public institutions applied to the Act and shall classify public institutions into the categories of public corporation,quasi-governmental institution, and non-classified public institution for designation purpose. However, the Public Management Act does not state clearly the criteria for determining which institutions to include in the scope of application and category. This study argues that unclarity in designating public institutions could violate the principle of “rule of law” and it’s not hopeful for enhancing transparency in the management of public institutions. Furthermore, it gives rise to disputes between the Ministry of Strategy and Finance and the competent agency or relevant institution every year whenever the Minister of Strategy and Finance shall newly designate public institutions, cancel the designation thereof or designate such public institutions by changing the classification according to the Public Management Act. In order to resolve the existing problems in the legal system, this study proposes the need for revising the designation clause of public institutions in the Public Management Act, i.e., provisions regarding designation procedures of public institutions in the scope of application should be abolished and the requirements of public institutions applied to the Act be clarified in the Public Management Act to enhance transparency in applying and operating the Act.