Empirical Analysis of Local Government Financial Capacity: Focusing on Financial Index Analysis

Abstract

This research explores the financial status of local government, analyzing 234 local governments using 10 budget-related financial analysis indices published by the Korean Ministry of Government Administration and Home Affairs. This paper makes a correlation analysis of the index of local governments and measures the financial capacity of local government, looking for the developmental plan of financial capacity through a regression analysis for finding out factors affecting the resulting value. The results shows there was statistical significance in the entire score, such as the number of public officials, the number of civic groups, population, and local tax per capita. Local tax per capital was found to be most influential, followed by population.