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KMID : 1001320100370020151
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Social Welfare Policy
2010 Volume.37 No. 2 p.151 ~ p.177
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A Study of Determinants of Social Welfare Expenditure in Korean Local Government: Focused on the Decentralized Revenue Sharing System of ‘Participatory Government’
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Seo Sang-Bum
Hong Suk-Ja
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Abstract
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Though it greatly succeeded in economic growth through the so-called growth-first policy, Korea largely failed to enhance the quality of social welfare system compared to such economic growth. It is only recently that more active and equity-oriented social welfare policy was pursued, with the decentralization policy in 2005, under the ’Participatory Government.’ The Participatory Government’s decentralization policy gave a new impact on social welfare policy, and, in particular, the fiscal structure of the social welfare system. The key to the decentralization policy was ’fiscal decentralization’: a ’decentralization tax’ was introduced to meet the fiscal demand incurred by 67 services transferred to local governments in 2005. In this context, this dissertation aims to explore what factors determined the fiscal decentralization and the resultant introduction of decentralization tax. The result of this comparative study of determinants of social welfare budgets and expenditure is as follows. First, the ratio of social welfare expenditure is sharply increasing after the introduction of decentralization tax. Second, the most significant factors that influence Korea’s social welfare expenditure are population density, fiscal independence rate, local tax per capita, social welfare expenditure of the previous year, and the ratio of the registered disabled in order of significance. All in all, socio-economic variables and social welfare demands have been most influential in the shift in social welfare expenditure since the introduction of decentralization tax.
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KEYWORD
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social welfare expenditure, determinants, decentralization tax, fiscal decentralization
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