Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-23T08:04:01.448Z Has data issue: false hasContentIssue false
  • English
  • Français

Partisanship, Fiscal Transfers, and Social Spending in Korea: The Politics of Partial Decentralization

Published online by Cambridge University Press:  31 January 2022

Eunyoung Ha  and
Dong Wook Lee Open the ORCID record for Dong Wook Lee [Opens in a new window]
Eunyoung Ha*
Affiliation:
Institute for Welfare State Research, Yonsei University, Seodaemun-gu, Korea (the Republic of)
Dong Wook Lee
Affiliation:
Department of Political Science, Adelphi University, Garden City, NY, United States
*
*Corresponding author. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

In the last three decades, many Asian democracies have decentralized their political systems to promote the democratic, equal, and efficient distribution of national resources across regions. Nonetheless, most of these countries, including South Korea, are still in a stage of “partial fiscal decentralization,” in which locally elected officials have spending authority, while a significant portion of their financing relies on transfers from the central government. This article argues that the decentralized distribution is significantly influenced by the partisan interests of central and local governments. The central government transfers more funds to local governments that their co-partisans govern, and local incumbents follow partisan policy priorities to obtain the allocation of available fiscal resources. This argument is strongly supported by the empirical analysis of subsidy transfers and regional social expenditures in South Korea from 2002 to 2015. First, we find that the central government in Korea transfers larger subsidies to politically aligned regions. Second, regional governments with larger subsidy transfers have higher levels of social expenditures. Third, governors or mayors affiliated with a progressive party spend significantly more on social welfare and education than do those affiliated with a conservative party.

Keywords

decentralizationfiscal transferpartisan politicssocial spendingregionalismideology
Type
Article
Information
Journal of East Asian Studies , Volume 22 , Issue 2 , July 2022 , pp. 171 - 200
Check for updates
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of the East Asia Institute

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ahn, Kookshin. 1999. “Income Distribution, Regionalism and Sociopolitical Instability in Korea.” In Growth, Distribution and Political Change, edited by Minami, Ryoshin, Kim, Kwan S., and Falkus, Malcolm. London: Palgrave Macmillan.Google Scholar
Alfada, Anisah. 2019. “Does Fiscal Decentralization Encourage Corruption in Local Governments? Evidence from Indonesia.” Journal of Risk and Financial Management 12 (3): 118–132.CrossRefGoogle Scholar
Anderson, Theodore Wilbur, and Hsiao, Cheng. 1982. “Formulation and Estimation of Dynamic Models Using Panel Data.” Journal of Econometrics 18 (1): 47–82.CrossRefGoogle Scholar
Arellano, Manuel, and Bond, Stephen. 1991. “Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations.” Review of Economic Studies 58: 277–297.CrossRefGoogle Scholar
Arulampalam, Wiji, Dasgupta, Sugato, Dhillon, Amrita, and Dutta, Bhaskar. 2009. “Electoral Goals and Center-state Transfers: A Theoretical Model and Empirical Evidence from India.” Journal of Development Economics 88(1): 103–119.CrossRefGoogle Scholar
Aspalter, Christian. 2006. “The East Asian Welfare Model.” International Journal of Social Welfare 15 (4): 290–301.CrossRefGoogle Scholar
Bird, Richard M. 1993. “Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization.” National Tax Journal 46 (2): 207–227.CrossRefGoogle Scholar
Boadway, Robin, and Shah, Anwar. 2009. Fiscal Federalism: Principles and Practice of Multiorder Governance. Cambridge: Cambridge University Press.Google Scholar
Brollo, Fernanda, and Nannicini, Tommaso. 2012. “Tying Your Enemy's Hands in Close Races: The Politics of Federal Transfers in Brazil.” American Political Science Review 106 (4): 742–761.CrossRefGoogle Scholar
Brueckner, Jan K. 2009. “Partial fiscal decentralization.” Regional Science and Urban Economics 39 (1): 23–32.CrossRefGoogle Scholar
Costa-i-Font, Joan, Rodriguez-Oreggia, Eduardo, and Lunapla, Dario. 2003. “Political Competition and Pork-barrel Politics in the Allocation of Public Investment Mexico.” Public Choice 116 (1–2): 185–204.CrossRefGoogle Scholar
Cox, Gary W., and McCubbins, Mathew D.. 1986. “Electoral Politics as a Redistributive Game.” The Journal of Politics 48 (2): 370–389.CrossRefGoogle Scholar
Dixon, Geoff, and Hakim, Danya. 2009. “Making Indonesia's Budget Decentralization Work: The Challenge of Linking Planning and Budgeting at the Local Level.” International Public Management Review 10 (1): 119–169.Google Scholar
Driscoll, Barry. 2018. “Why Political Competition Can Increase Patronage.” Studies in Comparative International Development 53 (4): 404–427.CrossRefGoogle Scholar
Duranton, Gilles, and Venables, Anthony J.. 2018. Place-based Policies for Development. The World Bank, Working paper 24562. doi: 10.3386/w24562.CrossRefGoogle Scholar
Ebel, Robert D., and Vaillancourt, François. 2001. “Fiscal Decentralization and Financing Urban Governments: Framing the Problem.” In The Challenge of Urban Government: Policies and Practices, edited by Freire, Mila and Stern, Richard. Washington DC: World Bank.Google Scholar
Fell, Dafydd, Sullivan, Jonathan, and Sapir, Eliyahu. 2013. “Party Candidate Selection Before and After the Change of Ruling Parties: A Study of the 2005 and 2009 Local Executive Elections in Taiwan.” Taiwan Journal of Democracy, 9 (2):55–77.Google Scholar
Fisman, Raymond, and Gatti, Roberta. 2002. “Decentralization and Corruption: Evidence from U.S. federal transfer programs.” Public Choice 113: 25–35.Google Scholar
Fossati, Diego. 2016. “Beyond ‘Good Governance’: The Multi-Level Politics of Health Insurance for the Poor in Indonesia.” World Development 87: 291–306.CrossRefGoogle Scholar
González, Lucas. 2017. “Electoral Competition and Social Spending in the Argentine Provinces.” Journal of Politics in Latin America 9 (1): 91–124.CrossRefGoogle Scholar
Gonschorek, Gerrit J., Schulze, Günther G., and Sjahrir, Bambang Suharnoko. 2018. “To the Ones in Need or the Ones You Need? The Political Economy of Central Discretionary Grants−Empirical Evidence from Indonesia.” European Journal of Political Economy 54: 240–260.CrossRefGoogle Scholar
Hagopian, Frances. 2009. “Parties and Voters in Emerging Democracies.” In The Oxford Handbook of Comparative Politics, edited by Boix, Charles and Stokes, Susan C.. Oxford: Oxford University Press.Google Scholar
Heo, Uk, and Stockton, Hans. 2005. “The Impact of Democratic Transition on Elections and Parties in South Korea.” Party Politics 11 (6): 674–688.CrossRefGoogle Scholar
Herath, Tikiri N. 2009. “Decentralization of Governance and Economic Development: The Sri Lankan Experience after Establishment of Provincial Councils.” South Asia Economic Journal 10 (1): 157–185.CrossRefGoogle Scholar
Hsiao, Yi-ching, Cheng, Su-feng, and Achen, Christopher H.. 2017. “Political Left and Right in Taiwan.” In The Taiwan Voter, edited by Achen, Christopher H. and Wang, T. Y.. Ann Arbor: University of Michigan Press.Google Scholar
Huh, Won-jae (허원제) and Kim, Young-shin (김영신). 2017. “A Political Economic Analysis of the Pork Barrel Budget Allocation: Based on the Special Share Tax.” Journal of Public Finance Studies 10 (1): 151–184.Google Scholar
Ichimura, Sinichi, and Bahl, Roy, eds. 2016. Decentralization Policies in Asian Development. Singapore: World Scientific Publishing.Google Scholar
Jeon, Sang-gyeong (전상경). 2012. “An Empirical Study on the Interrelationship Between Political Environmental Changes and Distribution of National Subsidies.” The Korean Association for Local Government Studies 16 (1): 121–145.Google Scholar
Jeong, Sang-ho (정상호). 2011. “The Research on Relations Between the Structure of Local Government and the Conflict of Local Politics.” Economy and Society 90: 70–102.Google Scholar
Kang, Woo Chang. 2015. “Electoral Cycles in Pork Barrel Politics: Evidence from South Korea 1989–2008.” Electoral Studies 38: 46–58.CrossRefGoogle Scholar
Kim, Beom-soo (김범수) and Lee, Byung-jae (이병재). 2018. “Re-examining the Effects of Partisan Politics on Welfare Expenditure in Korean Local Government.” Journal of Legislative Studies 24 (1): 205–239.Google Scholar
Kim, Beom-soo and Roh, Jeong-ho (노정호). 2014. “Partisan Politics and Welfare Expenditures in South Korean Local Governments.” Korean Political Science Review 48 (2): 57–78.Google Scholar
Kim, Jung-hun (김정훈). 2000. “국고보조금의 개편방안” [A Study of Specific Grants]. 한국조세재정연구원 정책보고서 [Korea Institute of Public Finance] 2: 1–184.Google Scholar
Kitschelt, Herbert, and Wilkinson, Steven I., eds. 2007. Patrons, Clients and Policies: Patterns of Democratic Accountability and Political Competition. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Kwon, Huck-ju. 2009. “The Reform of the Developmental Welfare State in East Asia.” International Journal of Social Welfare 18: S12–21.Google Scholar
Kwon, Hyeok Yong. 2005. “Targeting Public Spending in a New Democracy: Evidence from South Korea.” British Journal of Political Science 35: 321–341.CrossRefGoogle Scholar
Lindbeck, Assar, and Weibull, Jörgen W.. 1987. “The Determinants of Success of Special Interests in Redistributive Politics.” Public Choice 52 (3): 273–297.CrossRefGoogle Scholar
Malik, Rabia. 2019. “(A) Political Constituency Development Funds: Evidence from Pakistan.” British Journal of Political Science 51 (3): 963–980. doi.org/10.1017/S0007123419000541.CrossRefGoogle Scholar
Manikas, Peter, and Thornton, Laura Lenore, eds. 2003. Political Parties in Asia: Promoting Reform and Combating Corruption in Eight Countries. Washington DC: National Democratic Institute for International Affairs, 2003.Google Scholar
Musgrave, Ricard A. 1969. Fiscal Systems. New Haven: Yale University Press.Google Scholar
National Assembly Budget Office. 2020. “2020 경제,제정수첩” [Economic and Fiscal Statistics 2020]. National Assembly Budget Office. www.nabo.go.kr.Google Scholar
OECD. 2019. OECD Development Pathways: Social Protection System Review of Indonesia. Paris: OECD Publishing. doi.org/10.1787/788e9d71-en.Google Scholar
Osborne, David. 1993. “Reinventing Government.” Public Productivity & Management Review 16 (4): 349–356.CrossRefGoogle Scholar
Panao, Rogelio Alicor L. 2020. “Beyond Flypaper: Unconditional Transfers and Local Revenue Generation in the Philippines, 1992–2016.” International Journal of Public Administration. doi.org/10.1080/01900692.2020.1759628.Google Scholar
Park, Chan-young (박찬영). 2017. “Pork Barrel Politics in Fiscal Equalization Grant: Focusing on the Interaction between Granters and Recipients.” The Korean Journal of Local Government Studies 21 (2): 129–152.Google Scholar
Peterson, Paul. 1981. City Limit. Chicago: University of Chicago Press.CrossRefGoogle Scholar
Seo, Hee-jung (서희정). 2019. “2019년도 서울시 복지 분야 예산(안) 분석” [2019 Revenue Analyses on Social Welfare Programs for the City of Seoul]. 월간복지동향 [Welfare Trends] 1: 59–63.Google Scholar
Shair-Rosenfield, Sarah. 2016. “The Causes and Effects of the Local Government Code in the Philippines: Locked in a Status Quo of Weakly Decentralized Authority?” Journal of Southeast Asian Economies 33 (2): 157–171.CrossRefGoogle Scholar
Selway, Joel Sawat. 2011. “Electoral Reform and Public Policy Outcomes in Thailand: The Politics of the 30-Baht Health Scheme.” World Politics 63 (1): 165–202.Google ScholarPubMed
Shah, Anwar. 2004. “Fiscal Decentralization in Developing and Transition Economies: Progress, Problem, and the Promise.” World Bank Policy Research Working Paper 3282.CrossRefGoogle Scholar
Sole-Olle, Albert. 2006. “The Effects of Party Competition on Budget Outcomes: Empirical Evidence from Local Governments in Spain.” Public Choice 126 (1–2): 145–176.CrossRefGoogle Scholar
Sumarto, Suarno, Vothkneht, Marc, and Wijaya, Laura. 2014. “Explaining the Regional Heterogeneity of Poverty: Evidence from Decentralized Indonesia,” In Regional Dynamics in a Decentralized Indonesia, edited by Hill, Hal. Singapore: Institute of Southeast Asian Studies.Google Scholar
Swanson, Jeffrey, and Ki, Namhoon. 2020. “Has the Fiscal Decentralization of Social Welfare Programs Helped Effectively Reduce Poverty Across US States?” The Social Science Journal. doi: 10.1080/03623319.2020.1728510.Google Scholar
Unger, Danny, and Mahakanjana, Chandra. 2016. “Decentralization in Thailand.” Journal of Southeast Asian Economies 3 (2): 172–187.CrossRefGoogle Scholar
Wagner, Adolph. 1883. Finanzwissenschaft, 3rd ed. Leipzig: Winter.Google Scholar
Wang, Yi-ting. 2012. “A Case Study of Parties’ Programmatic and Clientelistic Electoral Appeals in South Korea.” In Research and Dialogue on Programmatic Parties and Party Systems—Case Study Reports, edited by Kitschelt, Herbert and Wang, Yi-ting, 138–60. Stockholm: International Institute for Democracy and Electoral Assistance.Google Scholar
Wongpredee, Achakorn, and Sudhipongpracha, Tatchalerm. 2014. “The Politics of Intergovernmental Transfers in Northeast Thailand.” Journal of Developing Societies 30 (3): 343–363.CrossRefGoogle Scholar
Yoon, Seok-wan (윤석완). 2007. “A Study on How to Distribute Government Grants: A Criterion of Efficiency Reconsidered.” Korean Journal of Local Finance 12 (2):123–144.Google Scholar
Yu, Jin-sook (유진숙) and Kim, Won-sub (김원섭). 2015. “Regional Social Policy and the Party: The Case of the School Meal Policy.” Korean Political Science Review 49 (4): 363–389.Google Scholar
Supplementary material: File

Ha and Lee supplementary material

Ha and Lee supplementary material

Download Ha and Lee supplementary material(File)
File 189.7 KB