지방정부의 세입 과소추계가 예산초과 재정지출에 미치는 영향

This study analyzes the impact of revenue underestimation on the over-expenditure exceeding the budgeted amount, focusing on whether fiscal conditions, political factors, or fiscal management capacities of local governments moderate that impact. The results of panel data analysis of 17 Korean local governments (KLGs) from 2014 to 2023 show that as revenue underestimation increases, the over-expenditure increases. This suggests that KLGs are achieving political effect of expanding public services without damaging the original fiscal balance target, which is possible by using windfall revenue resulted from the revenue underestimation. The impact of revenue underestimation on the over-expenditure is weakened when the debt ratio is high, fiscal autonomy is high, and the head of the local government is from the majority party in the local assembly. This suggests that debt management is properly performed, and local governments with solid foundation in fiscal and political point are less likely to use windfall revenue as an excuse for over-expenditure. Meanwhile, the impact of revenue underestimation on the over-expenditure is strengthened in the year immediately before the local elections, indicating that windfall revenue is being used as part of an election strategy. In addition, the tendency to increase the over-expenditure using windfall revenues becomes stronger in the large-sized local governments. The results of this study reveal that local government budget planning and execution can be affected by factors such as financial conditions, political factors and fiscal management capacities, thereby first calling attention to the need for institutional and technical improvement to reduce the revenue underestimation and second, the need to establish fiscal rules and more stringent deliberation of local councils for the use of windfall revenue.