Public institutions guaranteed exclusive position of core business are likely to be inefficient in management. Past governments made various efforts to innovate public institutions. Participatory government drove innovation of public institutions through Ministry of Planning and Budget, and this innovation policy had problems as followings: shortage of common sense of innovation, lack of understanding of innovation, gradual execution of innovation instead of system innovation for business innovation, lack of consideration of characteristics of various public innovation, overlapping of evaluation system, and nonobjective design of evaluation indicator. MB government has diverse assignments for improvement of these problems as followings: transformation of business mind, voluntary participation of employee, improvement of management system of public institutions, reform of business evaluation system, promotion of internal competition, and construction of performance based business system. What is the most important point for successful reform of public institution is to achieve the support of general public with effective action plan and substantial programs.