OECD Economics Department Working Papers

ISSN :
1815-1973 (online)
DOI :
10.1787/18151973
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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

 

Getting the Most Out of Public-Sector Decentralisation in Korea You or your institution have access to this content

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Author(s):
Randall S. Jones1, Tadashi Yokoyama1
Author Affiliations
  • 1: OECD, France

Publication Date
16 Dec 2005
Bibliographic information
No.:
468
Pages
31
DOI
10.1787/570027228062

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This paper discusses policies to improve fiscal relations between levels of government to better meet the needs of citizens, an objective of the government’s "Roadmap for Decentralisation". Although local government accounts for around half of total government spending, they have little autonomy and fiscal resources vary sharply between regions. The priority should be to enhance the independence of local authorities by establishing a clear division of responsibilities and transferring additional assignments to the local level. The general local governments should also have more influnence on education, while providing more support, through stronger linkages with the local education authorities, with a final aim of merger. The allocation of intergovernmental grants should be more transparent and the regulations attached to them should be relaxed to expand flexibility, while increasing reliance on block grants. Improving the fiscal federalism framework also requires more revenue raising power for local governments while simplifying the structure of local taxes. Greater accountability and rules are needed to ensure sound fiscal management by local governments. This Working Paper relates to the 2005 OECD Economic Survey of Korea (www.oecd.org/eco/surveys/korea).
Keywords:
fiscal discipline, decentralisation, fiscal federalism, regional policy, property tax, Korea, local government, intergovernmental grants
JEL Classification:
  • H1: Public Economics / Structure and Scope of Government
  • H2: Public Economics / Taxation, Subsidies, and Revenue
  • H7: Public Economics / State and Local Government; Intergovernmental Relations
  • R58: Urban, Rural, Regional, Real Estate, and Transportation Economics / Regional Government Analysis / Regional Development Planning and Policy