地方交付金과 國庫補助金의 政策結合 및 그에 따른 地域住民厚生의 變化

General grants vs. matching grants, and the combined effects of these on local economic welfare

In this paper a simple optimization model is presented and a simulation technique is used to examine the changes in local residents' welfare followed by various combinations of two types of grants, namely ganeral grants and specific. grants. The major findings can be summarized as follows. First, private consumption is directly related to welfare level in terms of Rawlsian social welfare function, and regardless of the type of social welfare functions the social welfare increases as general grants increases. Second, optimal distribution rates of general grants between the two local governments can be derived once subsidy rates of specific grants are given. Third, a theoretical proof that specific grants generates more public expenditure than general grants is confirmed in the simulation result in this paper. Fourth, when we have relaxed the same population assumption and assumed that the rich locality has more population than the poor locality, we have found that the central goverment can achieve the objective of horizontal equity with less effort than before. That is, the objective can be achieved on a small scale adjustment. Finally, it has been proved that as the residents’ income gap between the two localities increases poor locality’s distribution rate(or subsidy rate) should increase.