2020 Local Finances of the Republic of Korea
Published on 21 September 2020
Published by Administrative Budget Analysis Division of the Budget Analysis Department
The purpose of this report is to enhance parliamentarians’, parliamentarian assistants’ and the general public’s understanding of local finances, based on the importance of local finances.
This report is composed of three parts. Part I: The Current Status of Local Finances highlights the current status of the volume of integrated local finances as well as key fiscal indicators, including those on the integrated independence rate of local finances, along with explanatory notes for each indicator. In addition, an improved description of fiscal decentralization is provided by incorporating the progress on the government’s Measures to Pursue Local Fiscal Decentralization (announced on October 2018 collectively by relevant government ministries) as well as analyzing previous policies on fiscal decentralization and relevant fiscal indicator trends. The main body also includes the current status of local public institutions.
Part II: The Establishment and Management of Local Finances contains the laws and operation principles of local finances as well as the process of local finance budget formulation, budget execution and settlement of accounts, along with an explanation on the local finance management system for enhancing fiscal soundness at the local government level. In addition, this report included details such as the regulations on the management of the appropriation of surpluses upon account settlement and an analysis of such cases; local fiscal management systems in other countries; as well as local bond issuance status and prospects.
Part III: Understanding the Local Finance Coordination System features the coordination system between the central and local governments which consists of subsidies, education fiscal grants and national treasury subsidies; as well as the local finance coordination system between local governments which consists of city and provincial subsidies, financial grants and Office of Education funds transferred to local governments.
In addition, Local Finances at a Glance (1995-2020) provides a panoramic view of how major local finance-related laws and institutions have evolved over time; while a new section, A List of Major Legislation and Amendments of Local Finance-related Laws, has been added to inform readers of recent (January 2019-August 2020) amendments with the reasons for such revisions.