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The Use of Financial Information for Budget Cuts under Unprecedented Fiscal Pressure

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  • KIM, Bong Hwan
  • YUN, Jun Hyun
  • JANG, Inkee

Abstract

We investigate the utilization of financial information by the central government and policymakers for budget cuts under unprecedented fiscal pressure caused by COVID-19 in South Korea. Previous research (Helden, 2016; Raudla and Savi, 2015) strongly suggests the possibility that, owing to several reasons including time pressure, constrained analytical capabilities, and the political nature of the budgetary process, financial information might not be used for budget reductions under unprecedented fiscal strain. However, we find that financial information, which is simple but provides useful information to identify the progress of government projects, is utilized for budget cuts even under such fiscal stress.

Suggested Citation

  • KIM, Bong Hwan & YUN, Jun Hyun & JANG, Inkee, 2025. "The Use of Financial Information for Budget Cuts under Unprecedented Fiscal Pressure," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 66(1), pages 1-27, June.
    • Handle: RePEc:hit:hitjec:v:66:y:2025:i:1:p:1-27
    DOI: 10.15057/hje.2025001
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    References listed on IDEAS

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    5. Bong Hwan Kim, 2019. "The president and asymmetric use of information," Applied Economics Letters, Taylor & Francis Journals, vol. 26(14), pages 1214-1217, August.
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    7. Bong Hwan Kim, 2020. "Budgetary responses to COVID-19: the case of South Korea," Journal of Public Budgeting, Accounting & Financial Management, Emerald Group Publishing Limited, vol. 32(5), pages 939-947, September.
    8. Ringa Raudla & Riin Savi, 2015. "The use of performance information in cutback budgeting," Public Money & Management, Taylor & Francis Journals, vol. 35(6), pages 409-416, November.
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    Keywords

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    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H8 - Public Economics - - Miscellaneous Issues

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