The Korean Journal of Economic Studies
The Effects of the Local Financial Pressure due to the Expansion of Welfare Programs on the Local Budget Planning
Jae Myung Han (National Assembly Budget Office) and Woojin Shin (SungKongHoe University)Year 2017Vol. 65No. 4
This study investigates how the increase of the local matching fund due tothe expansion of welfare programs affects the local budget planning.Specifically, we analyzed the effects of the welfare financial burden on thebudgets of some self-funding programs in lower-level local governments. Theresult confirms that lower-level local governments tend to reduce their ownsocial overhead capital (SOC) or social welfare expenditures as the centralgovernment’s welfare programs increase. This finding suggests that thegovernment should come up with some measures to help the localgovernments that are under financial pressure due to the expansion of welfareprograms.