지방교부세의 인센티브 장치에 관한 연구

The allocation of equalization grants is required to follow a strict formula that guarantees objectivity, fairness and transparency by excluding discretionary influences of lower governments as well as higher governments to take advantage of the decentralized fiscal system. In case of the local share tax, however, the central government intends to guide the local governments' administrative and financial choices in the desirable direction set by itself by affecting the allocation of local share tax through various channels. This paper investigate the structures and effects of various incentive schemes operating in the allocation of local share tax. Using results, we suggest the direction of institutional reform to restore the identity of the ordinary share tax as the representative equalization grant in the Korean local finance system. The ordinary share tax is required to exclude most unnecessary incentives that the grant entity can arbitrarily affect the allocation from the formula. If the central government wants to induce or control local governments' administrative and financial choices in certain directions, it can make active use of the special share tax, which has the nature of a specific-purpose grant.