Author ORCID Identifier

https://orcid.org/0000-0002-4670-5511

Year of Publication

2021

Degree Name

Doctor of Philosophy (PhD)

Document Type

Doctoral Dissertation

College

Graduate School

Department

Public Policy and Administration

First Advisor

Dr. J. S. Butler

Second Advisor

Dr. Merl Hackbart

Abstract

Over the past decades, there have been efforts across the globe to break the grip of the centralized power of government and devolve authority to lower-level actors. The devolution of authority in the governance system can take place in various ways: the central government can devolve authority, responsibility, and functions to local governments; or a local government can delegate its authority to make policy decisions to the citizenry, for example, as a form of public participation. In a broad sense, we can group all these government activities to devolve power to lower-level actors and call it “decentralization.” This dissertation attempts to advance our understanding of the devolution of fiscal authority to lower-level actors, focusing on the two fiscal devolution mechanisms—participatory budgeting and fiscal decentralization.

This dissertation consists of two essays. Chapter 2 focuses on the topic of participatory budgeting—a mechanism that devolves fiscal authority from local governments to the public. Specifically, this dissertation poses a research question that has not previously received much attention from scholars: does participatory budgeting affect the fiscal outcomes of local governments? By analyzing participatory budgeting data on South Korean local governments over the period 2012–2018, the first essay finds that participation and deliberation of citizens in the participatory budgeting process have positive effects on the fiscal outcomes of local governments. I attribute this positive impact to increased municipal budget transparency and improved budget literacy of citizens that resulted from reduced information asymmetry between citizens and government officials in the participatory budgeting process.

Chapter 3 focuses on the fiscal devolution occurring between different tiers of governments—the central government and local governments. This study investigates the effects of fiscal decentralization in South Korea on the composition of local government expenditures. The findings indicate that fiscal decentralization leads to strategic behaviors of local governments by adjusting the composition of expenditures in each functional category. Overall, the findings confirm the earlier argument that local governments strategically make spending decisions to influence the location of households and capital. These strategic spending decisions can ultimately have a positive impact on economic growth but the finding also warns that fiscal decentralization can lead to a systemic distortion of local spending if the local governments make fiscal decisions in isolation without corrective measures applied in the decentralization process.

Digital Object Identifier (DOI)

https://doi.org/10.13023/etd.2021.029

Available for download on Wednesday, March 30, 2022

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