The Korea Local Administration Review

The paper tries to show feasible expenditure management across levels ofgovernments. Indeed, sub-national governments faced dilemma betweenreduction of revenue and increase of public investment after the economiccrisis. Central government also faced a trade-off between expansion of transferand soft-budget constraint problem. Under this circumstances, this paperattempts to make a better shape of fiscal relations in Korea. First, the fiscaltransfer would be the most efficient way to correct fiscal responsibilities.Second, long-term debt management should be considered for not onlymonitoring but also self-interest encouragement. And, global standards will beintroduced. Finally, the determinants of sub-national expenditure will beexamined to confirm the conjecture for macro-economic, fiscal, politicalfeatures.
□ Keywords: debt management, fiscal transfer, soft-budget constraint, fiscalrelations