This suggests policy to reestablish relations between the central and local governments, to expand local governments' financial independence and to reform the government subsidy system.
The start of the local government system has brought about several positive changes for Korea, but there have been some challenges in operating the system. Additionally, the lack of competition, excessive control of the central government, and short-sighted administrations have made these challenges difficult to overcome. Therefore, it is time to reestablish relations between the central and local governments, and innovate management in local governments.
First, the relationship between the central and local governments should be reestablished in such a way that the existing central government-oriented system is changed to meet the needs of transition into the local government system. An example can be found in the United Kingdom's central and local governments. By studying the U.K., Korea can integrate their lessons into its plan.
Second, local governments’ own finances needs to be increased. Until now, most local governments haven't developed past weak revenue structures that rely on financial support from the central government. Korea should help local governments to be operated independently by making local taxation simple, introducing methods to operate taxation in a reasonable manner, and increasing finance through local tax and non-tax revenue.
Third, the government subsidy system should be reformed. The current government subsidy system has significant problems. For example, it has been largely dependent on decisions made by the central government and deals in small subsidies. Therefore, system should be reformed in such a way that they emphasize independence, responsibility and efficiency of local government finance, so that the local governments can be strengthened.
중앙 지방정부간 관계 및 재원조정(Relations and financial adjustment between the central and local governments)
|Series Title; No||연구보고서 / 96-15|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||KDI; KDI School|