The Korea Local Administration Review

Questions of local government size structures and of optimal local government sizes have been discussed for a long time in western countries and in different contexts: from a theoretical point of view in models of spatial organization; in studies of economic and demographic development as well as in comparative regional county investigations; in the context of optimal local government development strategies for thinly populated or underdeveloped regions; and from a general viewpoint of regional economic and social policies in many countries. However, in Korea up until now there has been no significant empirical study on the optimal size of local governments. This article challenges some myths that the authors have observed surrounding the present size of local governments in Korea, proposing the optimal size of local governments based on economies of scale. For this purpose, it analyzes the financial data contained in the Financial Yearbook of Local Government for the Year 2003 published by the Ministry of Government Administration and Home Affairs and explores the optimal size of local governments with regard to economies of scale. It concludes that the population size of local governments ranging from five hundred and fifty thousand to six hundred thousand is optimal in terms of economies of scale and suggests that the optimal size of local governments should be studied systematically in the future.