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An Analysis of Political Effects on Government Expenditure: From Financial Accountability Perspective

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키워드

주제분류정책학

초록

This paper aims to analyze how political factors affects private transfer expenditures in the local policy-making process. We focus on political competition, partisanship, and the local governor's career as political aspects. These political factors are considered as independent variables and private transfer expenditure as a dependent variable. In addition, we examine the moderating effect of financial dependency on the relationship between political factors and local government expnediture, using threshold analysis based on Hansen's(1996, 1999) sample-splitting method. It is necessary that we analyze the changes in budgeting that depend on fiscal interaction between central and local government because local fiscal dependency implies not only soft budget constraints but also the effect of monitoring and control by the central government. As the literature has shown, there is a political effect on private transfer expenditures. The result of this research shows that each political factor has a different effect on high fiscal dependency. The local government has both a tendency to increase expenditures as a fiscal illusion and to decrease expenditures through monitoring and control by central government. Therefore, it is necessary to consider the different incentive system depending on the financial conditions. Also it is needed to reinforce political accountability in local government for their residents and central government.

Abstract

This paper aims to analyze how political factors affects private transfer expenditures in the local policy-making process. We focus on political competition, partisanship, and the local governor's career as political aspects. These political factors are considered as independent variables and private transfer expenditure as a dependent variable. In addition, we examine the moderating effect of financial dependency on the relationship between political factors and local government expnediture, using threshold analysis based on Hansen's(1996, 1999) sample-splitting method. It is necessary that we analyze the changes in budgeting that depend on fiscal interaction between central and local government because local fiscal dependency implies not only soft budget constraints but also the effect of monitoring and control by the central government. As the literature has shown, there is a political effect on private transfer expenditures. The result of this research shows that each political factor has a different effect on high fiscal dependency. The local government has both a tendency to increase expenditures as a fiscal illusion and to decrease expenditures through monitoring and control by central government. Therefore, it is necessary to consider the different incentive system depending on the financial conditions. Also it is needed to reinforce political accountability in local government for their residents and central government.

참고문헌 (48)

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