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Getting the Most Out of Public-Sector Decentralisation in Korea

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  • Randall S. Jones
  • Tadashi Yokoyama
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    Abstract

    This paper discusses policies to improve fiscal relations between levels of government to better meet the needs of citizens, an objective of the government’s “Roadmap for Decentralisation”. Although local government accounts for around half of total government spending, they have little autonomy and fiscal resources vary sharply between regions. The priority should be to enhance the independence of local authorities by establishing a clear division of responsibilities and transferring additional assignments to the local level. The general local governments should also have more influnence on education, while providing more support, through stronger linkages with the local education authorities, with a final aim of merger. The allocation of intergovernmental grants should be more transparent and the regulations attached to them should be relaxed to expand flexibility, while increasing reliance on block grants. Improving the fiscal federalism framework also requires more revenue raising power for local governments while simplifying the structure of local taxes. Greater accountability and rules are needed to ensure sound fiscal management by local governments. This Working Paper relates to the 2005 OECD Economic Survey of Korea (www.oecd.org/eco/surveys/korea). Tirer le maximum de la décentralisation du secteur public en Corée Ce papier examine les politiques qui visent à rationaliser les relations financières des différents niveaux d’administration pour mieux répondre aux besoins des habitants, comme le veut le plan de marche gouvernemental vers la décentralisation. Bien que les collectivités locales soient à l’origine de la moitié des dépenses publiques totales, elles n’ont guère d’autonomie et leurs ressources budgétaires varient fortement d’une région à l’autre. L’objectif prioritaire est de renforcer l’indépendance des autorités locales en clarifiant la répartition des compétences, en transférant d’autres tâches à l’échelon local et en fusionnant les autorités scolaires locales avec les autorités locales générales. L’affectation des transferts entre collectivités publiques doit être plus transparente et leur réglementation, assouplie, pour plus de flexibilité, avec en parallèle un recours élargi aux dotations globales. Pour rationaliser le fédéralisme budgétaire, il faut aussi que les collectivités locales puissent mobiliser davantage de recettes et, en même temps, simplifier la structure de la fiscalité locale. Ce chapitre recommande aussi un effort de responsabilité et des règles qui assurent une saine gestion budgétaire des autorités locales. Ce Document de travail se rapporte à l'Étude économique de l'OCDE de la Corée 2005 (www.oecd.org/eco/etudes/coree)

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    File URL: http://dx.doi.org/10.1787/570027228062
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 468.

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    Date of creation: 16 Dec 2005
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    Handle: RePEc:oec:ecoaaa:468-en

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    Keywords: Korea; fiscal discipline; decentralisation; property tax; regional policy; local government; fiscal federalism; intergovernmental grants; politique régionale; Corée; décentralisation; impôt immobilier; discipline budgétaire; fédéralisme financier; collectivités territoriales; transferts intergouvernementaux;

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