The Korea Local Administration Review

Previous studies about financial crisis management for local government focusedon the reason of the bankruptcy and short descriptions of their cases which are almostthe same as Seo (1997) dealt with. There is almost no previous study on financialcrisis management proceedings for local government. This study deals with the caseof Detroit bankruptcy in 2013, which gave the U.S. government and citizen a bigshock and still goes on now. This study focuses on financial crisis managementproceedings for local government in the U.S. federal and state government. Stateof Michigan has enacted various conditions to decide financial crisis in its localgovernments. Before serious financial crisis stage, Michigan is aggressivelyintervening in its local government; dispatching emergency manager with greatpowers in order not to go to the bankruptcy stage for its local governments.Notwithstanding many efforts, if the local government goes to bankrupt owing tounavoidable circumstances, Michigan state law has the procedure for applying forU.S. code Title 11, Chapter 9, Municipality bankruptcy. Powerful intervention of stategovernment in local governments, the delicate proceedings and provisions for lawsuitin this case may have important implications when Korea wishes to improve itsfinancial crisis management system for local government.
□ Keywords: Financial Crisis Management Proceedings for Local Government, USCode Title 11 Chapter 9, Detroit Bankruptcy