Does the size of local government debt affect the level of debt of off-budget entities? The case of local government in Korea
By: Jeong, Secong-ho
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Material type: 
BookPublisher: International Review of Administrative Sciences Description: 86(2), Jun, 2020: p.333-348.Subject(s): Budgetary constraints, Fiscal illusion, Korean local government, Off-budget debt, On-budget debt
In:
International Review of Administrative SciencesSummary: The rapid growth of debt of off-budget entities is the result of budgetary constraints. When local governments face fiscal stress, with rising debt, they tend to rely on local public enterprise debt to minimize debt limits and budgetary constraints. This study tests how the debt level of local governments affects the debt level of off-budget entities in 16 Korean metropolitan cities and provinces from 2008 to 2013, applying panel regressions. The results assert that as the debt of a local government increases, public enterprise debt increases accordingly. The findings confirm that public enterprises are used to lessen budget pressure by increasing the total public debt. This practice is like concealing local government debt by using off-budget entities, which eventually creates a fiscal illusion. – Reproduced
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 86(2), Jun, 2020: p.333-348 | Available | AR124112 |
The rapid growth of debt of off-budget entities is the result of budgetary constraints. When local governments face fiscal stress, with rising debt, they tend to rely on local public enterprise debt to minimize debt limits and budgetary constraints. This study tests how the debt level of local governments affects the debt level of off-budget entities in 16 Korean metropolitan cities and provinces from 2008 to 2013, applying panel regressions. The results assert that as the debt of a local government increases, public enterprise debt increases accordingly. The findings confirm that public enterprises are used to lessen budget pressure by increasing the total public debt. This practice is like concealing local government debt by using off-budget entities, which eventually creates a fiscal illusion. – Reproduced
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