S-Space Graduate School of Public Administration (행정대학원) Dept. of Public Administration (행정학과) Korean Journal of Policy Studies (정책논총) Korean Journal of Policy Studies (정책논총) vol.30 no.1/3 (2015)
Corruption and Financial Management: Evidence from Korean Local Governments
- Kim, Eunji; Kim, Sangheon
- Issue Date
- Korean Journal of Policy Studies, Vol.30 No.2, pp. 177-192
- Academic researchers have paid lots of attention to corruption and there have been therefore numerous studies on the subject. Withal the rich literature on corruption, it is hard to find studies trying to investigate the effects of corruption on financial management of local governments. This article empirically tests the argument that corruption undermines local governments incentives for good financial management and increases the debt level with a unique Korean index of corruption, Integrity Scores published by Anti-Corruption & Civil Right Commission of Korea. According to OLS analyses, integrity has a negative and significant effect on the debt ratio. This supports the idea that the more local governments are corrupted, the less incentive they have to maintain a sound financial condition.