In search of decentralization and deconcentration: Local autonomy and fiscal reform in Korea

Decentralization initiatives that focus mainly on electoral and political processes without considering the fiscal and institutional dimensions can not be sustainable. Political decentralization is associated with the devolution of power to subnational political entities. If decentralized institutions in Korea are to perform the responsibilities devolved to them, they will need an appropriate level of fiscal resources to cover the costs of providing local public goods and services. The fiscal risks from decentralization are greater under an unbalanced financing strategy that creates large windfall gains and losses.