![[20-31] Institutional reform strategies for re-establishment of intergovernmental fiscal relations](/app/board/attach/image/thumb-2731-1624502900000.do)
As the government's budget increases and its functions diversify, the issue of intergovernmental redistribution of policy authority has emerged as an important public agenda. The key questions raised in this area relate to how decisions about the supply of public goods should be made, and how the supply method and delivery system should be constructed. The increase in welfare spending has expanded the size of local finances in the form of Government Subsidy Programs, which has, as a type of specific grants, the problem of fiscal inefficiency stemming from Common Pool and budget partitioning.
This study aims to analyze the current status and problems of Korea's fiscal decentralization, focusing on the state subsidy system and welfare subsidy programs, and to derive institutional reform strategies to reestablish intergovernmental fiscal relations. Specifically, this study proposes the introduction of a “sectoral comprehensive subsidy” system incorporating a fiscal decentralization factor into the existing government subsidy programs. In addition, reform schemes are proposed, based on a fiscal decentralization platform according to the object and nature of the welfare expenditures, in order to reorganize the central and local government's welfare project sharing system.
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