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Development Overview

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Overview of Korea’s development experience

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Development Overview
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Public Administration

Budget system 1

Working Toward Fiscal Viability (1948 to 1960)

Major changes in the basis of the budget system, as indicated in the budget guidelines published from 1948 to 1960, include the following. The Fiscal Act, first enacted in 1951, became the framework legislation for budget preparations by 1952. The Central Budget Agency (CBA) began to develop national finance principles in 1951 for the management of government budgets. Ministries and departments were required to request and draft their own budgets according to these principles, which were later renamed “budget guidelines.”

The budget of 1952 set the ceiling on unit overhead costs. The government adopted a contractionary fiscal policy, acknowledging no new or additional expenses other than legal duty costs. In 1955, research was conducted on whether and how to abolish the system of paying government employees wages in kind.
 
Changing Features and Standards of the Budget System (1948-1960)
 

Fiscal Year Description
1950
  • A supplementary budget, based on the funds available from the Economic Cooperation Administration (ECA), was included.
1951
  • The management principles for national finance began to be applied.
1952
  • The Fiscal Act was applied.
  • The budget guidelines were drafted.
  • The unit overhead cost was set at or below 150 percent of the previous year’s budget.
  • Only new or additional expenses amounting to legal duty costs or equivalents were acknowledged. However, expenses for certain military strengthening projects were also recognized.
1955
  • Research began on the abolition of the system of paying government employees wages in kind.


 Source: Korea Institute of Public Administration. 2008. Korean Public Administration, 1948-2008, Edited by Korea Institute of Public Administration. Pajubookcity: Bobmunsa.