Korean Defense Reform 2.0 after COVID-19: A Budget Perspective
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This paper investigates how COVID-19 affects Defense Reform (DR) 2.0 in SouthKorea from a budget perspective. The Korean defense reform, which was launchedin 2006, has rarely met its annual budget requirements. Following Korea’s budgetdecision-making process, this paper examines the reasons for the defense budgetshortfall. A vector autoregressive (VAR) analysis with annual Korean data showsthat both the national debt and government budget significantly influence thedefense budget. This result implies that a stable DR 2.0 stance can be maintainedby an expansive fiscal policy against COVID-19 in the short term. However,COVID-19 would lead to a lower defense budget due to increasing national debtin the midterm, which limits implementation of DR 2.0. This paper’s findings canhelp policymakers design new strategies for securing the defense budget after thepandemic.
Abstract
This paper investigates how COVID-19 affects Defense Reform (DR) 2.0 in SouthKorea from a budget perspective. The Korean defense reform, which was launchedin 2006, has rarely met its annual budget requirements. Following Korea’s budgetdecision-making process, this paper examines the reasons for the defense budgetshortfall. A vector autoregressive (VAR) analysis with annual Korean data showsthat both the national debt and government budget significantly influence thedefense budget. This result implies that a stable DR 2.0 stance can be maintainedby an expansive fiscal policy against COVID-19 in the short term. However,COVID-19 would lead to a lower defense budget due to increasing national debtin the midterm, which limits implementation of DR 2.0. This paper’s findings canhelp policymakers design new strategies for securing the defense budget after thepandemic.
참고문헌 (24)
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