Political Yardstick Competition in Local Public Expenditure Decisions: Evidence from Korean Municipalities

초록

Applying yardstick competition theory, this study examines how the spending decisions of local governments in Korea are influenced by neighboring jurisdictions, particularly in the context of electoral competition. Using spatial regression models with panel data from 151 municipalities between 2009 and 2015, the analysis explores variation in spending behavior by policy type -developmental, redistributive, and allocational. The findings indicate that developmental and redistributive policy expenditures are positively influenced by neighboring governments' spending, especially under conditions of intense electoral competition. In contrast, allocational policy spending shows no evidence of spatial interdependence. These results suggest that yardstick competition is selective and shaped by both political incentives and the nature of policy visibility. The study contributes to understanding local fiscal behavior and the role of interjurisdictional benchmarking in democratic accountability.

키워드