지방 재정이 지역 경제성장에 미치는 효과 분석

Local fiscal policy and Regional economic growth in Korea

This paper investigates the relationship between local fiscal policy and regional economic growth in Korea. Although most prior empirical studies present controversial findings about the effects of local tax and spending policies, this study reexamines these issues with more recent data and with careful attention to the effects of the components of fiscal structure. The empirical results support the findings that the expansion of local tax revenue and labor force population may encourage the growth of GRDP but the increase of local capital spending, local grant, national subsidy discourage the regional economic growth. The reason why it has the positive relationship between local tax and regional growth may come from the facts that the local tax revenues are determined by property transaction tax and tax exporting resulting in peculiar system of the same local tax rates across all local governments in Korea. These findings demonstrate the reform of the local tax system and expenditure structures including transfer payments. When the focus is placed on implementing the period before and after local autocracy system from 1990 to 2009, local fiscal policy particularly on the local tax revenue making more proportional to local income, is important to regional economic growth.