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Date Available
6-22-2026
Year of Publication
2026
Document Type
Graduate Capstone Project
Degree Name
Master of Public Administration
College
Graduate School
Department/School/Program
Public Administration
Faculty
JS Butler
Committee Member
Caroline Weber
Faculty
Joe Benitez
Abstract
This capstone examines strategies for managing government expenditures to secure long-term fiscal sustainability in South Korea. Although South Korea currently maintains a relatively low public debt-to-GDP ratio compared with other OECD countries, rapid population aging, slowing economic growth, and the continued expansion of mandatory expenditures pose significant long-term fiscal risks. Given the political and economic constraints associated with tax increases and growth-led debt management, this study focuses on expenditure management as a primary and feasible policy instrument for sustaining fiscal soundness.
The research combines empirical analysis with comparative case studies. First, the study examines the relationship between government debt and market-based indicators of fiscal risk—sovereign credit ratings and long-term government bond yields—using data from South Korea, the United States, France, and selected Southern European economies. The results suggest that public debt accumulation tends to be reflected more consistently in sovereign credit ratings than in long-term interest rates, particularly when debt levels become high and persistent. Second, the study analyzes expenditure management practices and fiscal adjustment experiences in several advanced economies, including the United States, France, Southern European countries, and Taiwan.
Based on these findings, the study proposes policy directions for South Korea, including strengthening fiscal discipline through the introduction of fiscal rules, enhancing ex-ante control over mandatory expenditures, establishing an early warning system for fiscal risks, and reforming fiscal governance through strategic expenditure and organizational reviews within ministries. The study also suggests adopting artificial intelligence–assisted zero-based budgeting (ZBB) to improve the effectiveness and efficiency of expenditure management. These reforms are essential for maintaining fiscal sustainability in the face of demographic and structural economic challenges.
Recommended Citation
Ryu, Jaehyun, "Expenditure Management Strategies for Long-Term Fiscal Sustainability in South Korea" (2026). MPA/MPP/MPFM Capstone Projects. 479.
https://uknowledge.uky.edu/mpampp_etds/479
