The Korea Local Administration Review

Elected mayors concern performances of local government in favor of incumbencyadvantage. This study focuses on the performance-reward model in the analysisof the effects of financial and accounting performances on the incumbency advantage.This study analyses the results of local election in 2014, employing 40 financialindices generated by Korean Local Government Financial Assessment System asproxies for the financial performance. It finds that the incumbency advantage issignificantly related with only 9 indices out of 40, but the other 31 indices are notsignificantly related. This finding supports the performance-reward model ofincumbency advantage partially at least.Election is a complex process in which many facts and perceptions are entangledin the competition environment. Nonetheless, the analysis of 2014 election discoversfindings as follows: 1. The mayor who performs better in the fiscal soundness hasgreater odds for winning election. 2. People wants mayors to immediately spend moreon the promotion of local economy, though such expenditure hurts fiscal soundnessin the long run. 3. The mayor who spends more on administrative legistative costshas greater odds to win, even though the ordinary people prefers the decrease inthose outlays.
□ Keywords: incumbency advantage, local government, financial and accountingperformance, performance-reward model