地域間 公平性과 財政力指標에 관한 硏究

A Study on Inter-regional Equity and a New Fiscal Position Index

There are wide gaps with respect to tax revenue per capita between local governments although they have nearly the same type of tax and tax rate structure in Korea. To lessen substantial differences in fiscal capacity, central government requires a reasonable principle which can be applied in distributing grants. This article aims to define inter-reginal equity and to develope a new fiscal position index which can be used by central government in distributing grants. Interregional equity is based on the concept of J.M Buchanan, i.e. “equal treatment for equals”. A new fiscal position index stems from the concepts related to fiscal position which has developed by RA Musrave and P.B Musgrave. Our index takes the form of the independent revenue(including local taxes and current non-tax revenue) devidd by current expenditure. Apllying and testing a new fiscal position index in grants distribution results in strengthening inter-regional equity compared with the current grant sysem.