Fiscal Autonomy and Corruption: Evidence from South Korea
Fiscal Autonomy and Corruption: Evidence from South Korea
Forthcoming, 2026.
Fiscal autonomy constitutes a critical dimension in analyzing corruption in a cross-sectional context. Previous studies suggest that a mismatch between revenue generation and expenditure responsibilities may undermine the anti-corruption benefits of decentralization, such as interjurisdictional competition and enhanced accountability. In this paper, we examine the role of fiscal autonomy in deterring corruption at the ministerial level of the central government, a topic that has received little attention in the empirical literature. Combining South Korean data on public officials convicted of corruption with information on the characteristics of special funds administered by individual ministries, we find that a higher share of earmarked revenues and greater flexibility in expenditure adjustment are associated with lower levels of corruption. These findings suggest that fiscal autonomy can serve as an important institutional mechanism for curbing corruption, even within highly centralized governmental systems.
Fiscal Autonomy and Corruption: Evidence from South Korea
Forthcoming, 2026.
Fiscal autonomy constitutes a critical dimension in analyzing corruption in a cross-sectional context. Previous studies suggest that a mismatch between revenue generation and expenditure responsibilities may undermine the anti-corruption benefits of decentralization, such as interjurisdictional competition and enhanced accountability. In this paper, we examine the role of fiscal autonomy in deterring corruption at the ministerial level of the central government, a topic that has received little attention in the empirical literature. Combining South Korean data on public officials convicted of corruption with information on the characteristics of special funds administered by individual ministries, we find that a higher share of earmarked revenues and greater flexibility in expenditure adjustment are associated with lower levels of corruption. These findings suggest that fiscal autonomy can serve as an important institutional mechanism for curbing corruption, even within highly centralized governmental systems.