지역균형발전을 위한 지방재정 확충 및 운용효율화 방안

Abstract

This paper aims to improve local financial system for socio-economic development at local and regional levels. It has been widely known among financial experts and planners that local financial system is inadequate to meet the increasing needs for local governments to provide various local services. Local financial system needs to be improved particularly for the achievement of decentralization and regional balanced development, which have been selected as major national agenda of the Roh Mu-hyun administration. The first half of this paper reviews current status and problems of local finance in terms of its relative size against national finance, ratio of local revenue against total local finance, and eff iciency in using local finance for regional development. It suggests that unlike many previous arg uments, the major problem of local finance is not its over-all size but its inequal distribution among regions and its inefficient use for regional development. The paper introduces the concept of local financial coefficient to analyze the inequality of local financial capability, particularly between the Capital region and rest of regions in Korea. It shows that the national finance has been overly allocated in the Capital regions while it has been insufficiently allocated in other regions. Furthermore, this paper clearly indicates that current proposals for the improvement of local financial system are likely to widen regional inequalities and weaken national financial capability to promote regional balanced development. The second half of this paper proposes some policy prescriptions to improve local financial system in the context of balanced regional development. It suggests that it is necessary to expand local financial capability to promote regional development projects in less prospe rous regions and to establish a regional governance system to coordinate regional development projects between the central and local governments for the efficient use of financial re sources at local and regional level.