Who will benefit from extended budget participation? An empirical analysis of South Korean participatory budgeting practices

IMPACT

Local governments around the world have implemented various budget participation mechanisms to overcome the drawbacks of representative-directed budget allocation by allowing the public to participate directly in the budget process. How far these budget participation mechanisms influence budget allocation decisions and produce the desired financial outcomes is still under debate. This article explains South Korean local government budget participation practices and reveals that adopting public budget participation mechanisms with greater citizen empowerment and inclusiveness increases expenditures that benefit the majority at the expense of special interest groups. The authors’ findings will be helpful for local government managers and policy-makers who are considering adopting budget participation mechanisms.

ABSTRACT

In this article, the authors investigate how participatory budgeting affects local spending. They test their hypothesis on a large N sample in South Korea that budget institutions with a higher participation level (higher empowerment and inclusiveness) increase their spending on the majority of the public and limit spending for the exclusive interests of the few.

KEYWORDS:

• Budget allocation
• local government budgeting
• participatory budgeting
• public participation
• South Korea

Acknowledgement

This work was supported by the 2021 Research Fund of Myongji University.

Disclosure Statement

No potential conflict of interest was reported by the author(s).