地方經費의 諸形態와 事業效果 1951-1960 = Local Expenditures and Community Benefits The Korean Case, 1950's

다국어 초록 (Multilingual Abstract)

During 1950's Korea experienced violent changes in every aspects of social life, in which those changes occured in economic and social sectors were more remarkable than at has been at any time in Korean history.
The national efforts were devoted to attainment of diverse objectives such as defence, rehabilitation of war damages and economic and social development in relation to stages of transition in 1950's. All of these efforts carried the levels of many governmental activities on at higher levels, leading to greater expenditures both for the central government and various levels of local governments.
This paper is concerned with the process of increase in local expenditures, taking into consideration the benefits from the various activities of local governments. It consists of four sections: The first section examines the growth in local expenditures by sector and by level of local governments. The second section attempts to show both the causes of the increase in local expenditures and accomplishments of local expenditure programs, in detail. The discussion is however, confined within general services provided by local governments. The third section argues local expenditures and their benefits in relation to the special activities which were designed to increase the economic well-being of certain groups in the economy. Finally, the fourth section deals with the growth of educational services provided by local governments.
Ⅰ. Growth in local government expenditures and changes in local expenditure patterns
There are three primary measures for evaluation of growth in public sector: the ratio of government purchases of goods and services to gross national product, the ratio of income originating in the governmental sector to total national income, the ratio of total government expenditures to gross national product. While each measure has its particular usefulness, the last one is used in this paper to measure the relative importance of local government sector in the national economy as shown in table 1.
Table 1. Government expenditures for the central and local governments.
(At current prices, Selected years, 1943-1960) In 100 million won
Year Central gov't Local gov't Ratio to G.N.P.(2)
expenditures(1) expenditures(1) (per cent)
A B A B
1943 16.7 41.6 41.5 11.4
1946 80.1 10.2 - -
1951 6.2 1.0 11.3 1.8
1953 60.7 7.5 13.8 1.7
1954(3) 142.4 25.3 15.9 2.8
1957 350.0 82.5 21.5 5.1
1959 400.0 121.4 21.6 6.5
1960 420.2 131.6 19.9 6.2
Note:
(1) Expenditures of general government sectors. Expenditures of FY1943 and FY1946 are estimates.
(2) Figures for 1943 and 1951 are estimatimates.
G.N.P. since 1953 are based on figures before revision.
(3) 15 months.
Source: The Bank of Korea, Annual Economic Review, 1948;
E.P.B., 1962 data; Ministry of Home Affairs, 1963 data.
The government expenditures shown in table 1 does not include some forms of expenditures, such as expenditures of special account sector and educational service sector. But the ratio shown in the table does measure trends of the influence of governmental activities, because the general government sectors almost represent governmental activities both on the national and local levels.
In 1950's local government expenditures rose much more rapidly than the central government expenditures in terms of the ratio to G.N.P. During the war-time, government expenditures for all levels of government rose tremendously. After the truce, the growth of expenditures at the central level slowed down, but the local government expenditures kept on growing. Since 1957 the growth in the government expenditures was held down in keeping pace with the stabilization program. The local government expenditures, however, increased more rapidly than the central government expenditures in ratio terms. Thus the ratio of local government expenditures to G.N.P. rose 1.8 per cent in 1951 to 6.2 per cent in 1960. Even if the absolute figures of government expenditures are adjusted for price level changes, the growth of expenditures at local level has been phenomenal. While the whole-sale price index (Seoul City) rose from 271 (base year: 1951=100) in 1953 to 1,164 in 1960, the index of the central government expenditures increase 979 (base year: 1951=100) in 1953 to 6,774 in 1960, and the index of the local government expenditures rose from 781 in 1953 to 13,774 in 1960.
Because local government sector consists of general government sector, special service sector and educational service sector, it is necessary to examine the trends of expenditures for each sector as a whole in order to measure the trends of local expenditures. However, completely accurate data of expenditures related to special service sector and educational sector are not available before 1957. Accordingly, the combined expenditures of all levels of local governments by function since 1957 are shown in table 2.
Table 2. Combined local expenditures of all levels of local government
by major function In billion won
Year Total General account Special account School district
1957 12.3 8.3 1.2 2.8
1958 15.4 10.0 1.5 3.9
1959 19.4 11.9 2.1 5.5
1960 21.1 13.2 2.1 5.8
Source: E.P.B., Korea Statistical Yearbook, 1961.
Between 1957-1960, local expenditure as a whole increased approximately 72 per cent. This change is attributable largely to the increase in expenditures of general government sector and school district. However, the relative importance of the special service sector rose gradually over the year. For instance the ratio of expenditures for special services to that of the general government sector was 14.5 per cent in 1957, but it rose to 17.6 per cent in 1959 and declined to 15.9 per cent in 1960.
The special service sector of local government consisted of a complex of services which were designed to increase the social benefit of certain groups in the local society. The provincial government provided the educational service at the level of middle and high school. Each city provided many services such as water supply, transportation, construction of site and dwellings, fire protection, and city planning. Besides, several cities operates hospitals, public halls and libraries, pawnshops and so on. Rural governments, ub and myon, provided the same services such as water supply, fire protection, transportation, machine work, land reclamation, loans advanced by grains and so on, though the services provided were not universal and the levels of expenditures in the special service sector were not relatively high.
In contrast with the special service sector, the expenditures of school district have grown tremendously in 1950's. The increase of school district expenditures in this decade was associated with a complex of factors such as compulsory education system, introduction of self-governing body in the field of educational administration and expansion of educational facilities based on the 6 year program for accomplishment of compulsory education which was started in 1954.
As table 2 shows, expenditures of school district amounted to 22.8 per cent of combined local expenditures in 1957, but its relative importance rose to 43.9 per cent in 1960.
Thus local governments spent more money in 1960 than they did at the beginning of 1950's. The expenditure of the general government sector (whose relative importance accounted for approximately 63.5 per cent in total local expenditures in this decade,) in current price increased about 138 times between 1951 and 1960. Such a remarkable increase of local expenditures in the general government sector was mainly attributed to greater increase of transfer expenditures inclusive of educational grants, spending for general administration and expenditures for community services during the period. However, major cause of the increase in local expenditures of the general government sector was different before and after 1953 when the armistice was realized. During the Korean War 1951-1953, the most important single factor, caused the increase of local expenditure, was the rise of cost for general administration associates with conducting war. However, after truce, the increase of transfer expenditures and cost of rehabilitation led the local expenditures to higher levels. Even since 1957, the increase of transfer expenditures were far greater than before, but the introduction of the various welfare programs carried the level of expenditures for social service on at higher levels in contrast with declining trends of relative importance in expenditures for community services and economic services.
Following the increase in local expenditures, the structure of local government expenditures was naturally changed as shown in the table 3.
Table 3. Local expenditures by major purposes
(Selected years, 1940-1960) Per cent
Total expenditures 1940 1951 1960
(million won) 189(1) 96 13,166
General administration 30.0 54.2 26.9
Community service 28.0 4.2 9.1
Economic service 7.2 18.7 2.9
Social service 8.8 5.2 6.1
Transfer expenditure 26.0 17.7 55.0
Total 100.0 100.0 100.0
Note (1) Japanese yen.
Source: Ministry of Home Affairs, Summary of Settled Budget for FY1962.
In FY1951, expenditures for general administration accounted for 54.2 per cent of the total in the general government sector of local governments. The economic service, which accounted for 18.7 per cent, was next in importance, followed by transfer expences (17.7 per cent) and social service (5.2 per cent). In comparison with the expenditure pattern of 1940, when Japan entered the World War Ⅱ, a substantially different picture of the relative activities of the local governments is given. Both expenditures for general administration and transfer activities were relatively at high levels, but the relative importance of community service and social service declined considerably. However, the relative importance of economic service rose sharply in 1951. Such a change in local expenditure pattern in 1951 is largely due to difference of social and economic circumstances between 1940 and 1951. (In 1940 Japanese colonial government concentrated its efforts on preparation for conducting the World War Ⅱ, but in 1951 severe fighting was conducted inland of Korea.)
Local expenditure pattern, however, varied markedly in 1960. While spending for general service and transfer activity usually dominated the local expenditure picture, their relative magnitudes changed significantly. The relative importance of the spending for general service declined to less than one half that of 1951. In contrast, over half of all local government expenditures in general government sector was made for purposes related to transfer activity in 1960, though it accounts for 17.7 per cent of the total in 1951. On the other hand, spending for economic service increased in the absolute terms, its relative magnitude declined from 18.7 per cent in 1951 to 2.6 per cent in 1960.
Following the growth in local government expenditures and changes in expenditure pattern, a major change has occured in the relative magnitudes of the expenditures of various levels of local government. In the general government sector, the provincial expenditure, accounted for 40 per cent of the total in 1946, rose most rapidly over the year, and in 1960, outranked the others with 77.1 per cent, compared to 7.3 per cent for city expenditures, 2.1 per cent for ub (small city) expenditures and 13.5 per cent for myon (rural community) expenditures, including inter-governmental grants. Even in the special service sector, the same trends were indicated. Thus the financial role of the provincial government became predominant at the end of 1950's.
Ⅱ. Expenditures of general government sector
As it was shown in the previous section, the causes of the increase in local expenditures for general government sector were due to expansion of general services during the Korean War, expansion of community services related to rehabilitation after the war and growth of transfer activity during and after the war.
The growth in spending for general administration was the direct product of the war. During the war period government expenditures were concentrated for a relatively few purposes such as mobilization of armed forces personnel, relief services, grain collection, encouragement of agricultural production, repair and maintenance of highways, bond selling campaign, tax collection and so on. These increased governmental activities, naturally, led to high general administration cost of local governments. In addition, the land reform service and the constitution of local assembly extended local government activities, too.
The phenomenal growth of operating cost of local governments is indicated in the figure of local government employees. Between 1949 and 1952, the local government employees inclusive of employees appointed by the central government increased from 29,897, though national government employees were decreased at the same period.
The second major cause of the increase in local expenditures consists of a complex of factors which led to the introduction of the various post-war reconstruction programs.
The war brought disastrous damages on economic and social facilities. An official announcement, in 1953, estimated war damages in public work sector: During the war period 36.3 per cent of national roads, 15.5 per cent of local roads and 26.2 per cent of existing bridges were destroyed respectively. Besides, damages in drainage facilities reached 233km and water supply facilities of 72 cities were required urgent recovery.
The Ministry of Home Affairs, therefore, set up the rehabilitation programs in relation to roads, city planning, water supply and river development and so on, in order to meet urgent requirement for post-war recovery from damages and to enlarge social infra-structure.
During 1953-1960 period the central government spent 2.7 billion won for road construction projects, of which about 101 billion won were transfered to local governments, at the same period the total length of newly constructed and repaired roads(national and local) reached 216km, paved roads, 498km respectively. Besides, the total length of rehabilitated and newly constructed bridges amounted to 44km.
In fact these accomplishments were far below the estimates in the plan, but the post-war public construction works increased local financial burdens considerably on account of insufficient grants-in-aid.
In connection with the post-war rehabilitation works, the central government spent 14.7 billion won for flood control until 1959, of which about one half was transfered to local governments. But it was also the proportional grants and covered approximately 80 per cent of the local governments spent 12.6 billion won during 1953-1960 period for rehabilitation for rehabilitation and construction of city facilities inclusive road and bridge, drainage and so on.
As the accomplishments of road construction project were far from the planned target, both flood control projects and city planning projects could not attain the goals, too. The ratios of accomplishments in both projects to the targets were about 30-40 per cent on the average.
In keeping with the rehabilitation programs in the sector of public works, a series of programs were also set up in the agricultural sector. It was estimated that the total war damage in the agricultural sector amounted to 10.5 billion hwan at the price of July 1953. Therefore, the Ministry of Agriculture and Forestry set up five-year plans in relation to agricultural production, live stocks, afforestation, forest erosion control works and so on.
In the five-year plan for increasing farm products, it was expected that the output of rice would be increased by 30.7 per cent and that of barley, 91.3 per cent during the plan period, 1953-1957 (grain year), taking advantage of irrigation and land reclamation. the intensified use of arable land, the improvement of seed, appropriate fertilization and so on.
The five-year plan for increasing farm products brought about satisfying results. At the target year 1957, the output of rice increased about 1.9 million suk and that of barley, about 700 thousand suk as compared with the base year, 1953. However, the outputs of rice and barley in 1957 grain year could not reach the target by 15.6 per cent and 38.6 per cent and 38.6 per cent respectively. Nevertheless, in the second five year plan which was started in 1958 grain year, the annual ratio of performance went beyond the target.
In connection with the plan for increasing farm products, about 1 3 million chong-bo (one chong-bo=2.45 acres) were brought in under cultivation or favored by land reclamation and irrigation projects during 1953-1960 period, and a total sum of 11.4 billion won was invested or loaned out by the central government, of which approximately 6 billion won was subsidized to local governments and private sector. It was, however, noteworthy that the small scale irrigation works were started since 1957, in order to achieve investment effect in the short period.
On the other hand, many governmental services were expanded to increase farm production. It is almost impossible to list all of them. However, it should be noted that over the years, such activities as improvement of seed, encouragement of farm production, fertilizer and use of farming machine, use of insecticides, extension service were important ones to lead greater expenditures, most of these governmental activities were in part financed by the central government through grants-in-aid, which increased the burden of local government.
Besides the five-year plan for increasing farm products, afforestation projects and forest erosion control projects kept development of the agricultural sector. Though afforestation plan was revised several times since 1949, the nation-wide program for afforestation was positively carried and under the financial support by the foreign aids since 1955. During 1954-1960 period, a sum of 660 million won was spent for afforestation of private sector, and the area of afforestation under taken came up to 695 thousand chong-bo. But this accomplishment was nothing but less than 70 per cent as compared with the plan target.
Immediately after the government was set up, the government attempted to undertake erosion control works under the ten-year plan. But the plan was in vain on account of the Korean War. In 1953 a new program was set up, but it was replaced by the other plan in 1957. The 1957 plan was also revised in 1959 once more. Thus the erosion control projects were revised twice even after the war. Although the plan was revised to raise the effect of project, achievements were very poor until 1967. For instance, the revised plan for forest erosion control in mountain was completed only 11 per cent as compared with the target until 1957. Even the erosion control in seaside completed 39 per cent of the target by the same time. In and after 1958, when the third revised plan was carried and, the ratio of completion to the target rose sharply. It was, in part, due to the increase of foreign aid.
During 1953-1960 period the central government financed 1.4 billion won most of it transfered to local governments and caused the proportional increase of local expenditures.
Growth of local expenditures in connection with the cost of the agricultural service, in part, attributable to expansion of service for increasing live stock production. As it was mentioned, immediately after the war the five-year plan for increasing live stock production was carried out, which led to greater expenditures related to service for love stocks.
Expenditures for economic service of local governments consisted of expenditures related to agriculture, forestry, fishery, commerce and industry. However, the relative importance of the expenditure for non-agricultural sector was very low. The relative magnitude of expenditures for commerce and industry inclusive of fishery was nothing but 3.6 per cent in 1951, and it rose to 8.9 per cent in 1960.
In 1950's various local social services were introduced. Even before the government was set up, the local communities were providing many social services related to hospital, relief, public health and so on within the limit of financial support.
During the war and the post-war period, the needs for public health service and welfare service were critical, in 1951 the number of persons who needed urgent relief was estimated to be 7.8 million, inclusive of war-refugees, war orphans and war-widows and their dependants. Over the years, the number decreased gradually, but in turn the services for war veterans and their dependants expanded. War veteran benefits were financed by the central government. But local governments extended the services for the aged distressed women, vocational and employment guidance, accommodation of physically handicapped or vagrant children and so on. At the same time, activities related to public health were expanded, too. For instance, 80 local health centres were set up until 1960 and medical services were extended to towns and villages without physician. It is, however, undeniable that development of local social services were in fact restricted on account of financial strain in part. Thus the local expenditures for social service exclusive of education, increased almost parallel with total local expenditures, though the need for social services was critical.
It was the transfer expenditures of local government that brought in remarkable change in the structure of local government expenditure. As it was shown its relative importance in local government expenditures rose from 18.7 per cent in 1951 to 55.8 per cent in 1960.
Considering that grant-in-aid occupied about 70-80 per cent if transfer expenditure on the average, the change occured in the local expenditure pattern meant centralization of functions into provincial governments. In fact, expenditure pattern of the provincial government changed remarkably during 1950's. In 1951, 31.7 per cent of the total provincial expenditures was spent for economic service, and 32.7 per cent of the total for transfer activities. But in 1960 the relative importance of transfer expenditure rose to 71.6 per cent of the total. In contrast, transfer expenditures of city government rose from 2 million won 1951 to 75 million won in 1960. Its relative importance changed from 1.8 per cent to 7.8 per cent at the same period. Both in ub and myon the transfer expenditures were almost negligible. It is, therefore, clear that rise of the relative importance of transfer expenditures in provincial governments accounts for trend of centralizing functions into the upper levels of governments.
Ⅲ. Expenditures for special service sector
The process of expansion in the field of special services of local governments Table 4. Special account (S/A) expenditures of Seoul City
By Account 1946 1948 1954 1955 1960
Education 125 955 91.7 243.3 697.3
Water supply 99 146 37.7 145.0 374.4
Public hall - 14 13.7 9.4 3.6
Transportation - - 8.2 18.5 1.1
Pawnshop - - 5.4 1.7 1.8
Housing - - - 61.0 41.2
City planning 7 - 1.3 0.9 13.5
Construction of site 2 7 0.1 0.1 13.2
Others 142 354 4.5 58.8 52.7
Total 375 1,476 162.6 538.7 1,198.8
Ratio of S/A expenditure to
cost of general government 209.5 140.7 88.3 87.9 94.3
(per cent)
Note: (1) Japanes yen.
(2) In 1946, inclusive of relief goods, fire-protection S/A etc.; in 1948, inclusive of relief goods, public restraunts S/A etc.
Source: Annual Report of Seoul City, 1948, 1950.
Summary of Settled Budget, 1954, 1955, 1960.
is clearly shown in the case of Seoul City. (table 4)
As it was already mentioned, the provincial level of governments provided the educational service at the level of middle and high school, but their activities in this field of special service were rather limited. Most of special services designed to benefit special groups in the community was performed by city levels of government. Indeed city governments, as shown in the case of Seoul City, provided various special services. One of the representative services was water supply. In the end of 1949, 18 cities out of 19 provided water supply service and until 1960 it increased to 28 cities. Moreover, since 1955 housing service added to the list as the most important one. It is noted that ub and myon governments also provided a few special services such as fire-protection, housing, city planning, transportation and so on, but their relative magnitudes were rather small.
In 1959 the local expenditures for special service sector amounted to 2.1 billion won, of which 47.2 per cent was spent for middle education, 29.2 per cent for water supply, 5.9 per cent for housing, and the rest for various special services, respectively.
Ⅳ. Development of local educational service and its expenditure
Though educational service of local government has an old history, it was 1950's when the foundation of its development has established.
As of December 1948, there were 3,536 primary schools, of which 3,507 schools were public. But the ratio of school attendance was nothing but 74.8 per cent. The government tried to expand the facilities of primary school through the promotion of compulsory education, but in vain on account of the Korean War, which decreased the ratio of school attendance to 69.8 per cent and destroyed about 70 per cent of the existing class-rooms.
In face of such a critical condition, the government set up the six-year plan for completion of compulsory education in 1953, and concentrated efforts to raise the school attendance ratio and expansion of school facilities.
The plan, started in 1954, expected to raise the ratio of school attendance to 96.1 per cent until 1959, and to clean off the problem of class-room.
During the plan period, a total sum of 15 billion won was spent for the primary school, exclusive of special assessment on beneficiaries, of which 13 billion won by the central government and 2 billion won by local government. But 49.4 per cent of the total was made for purpose related to the salary of teachers.
Thus, in consequence of financial strain, the achievements of the six-year plan was unsatisfactory. For instance, number of primary schools increased to 4,620 as of april 1960 but the ratio of school attendance rose to only 82.7 per cent and class-rooms in shortage amounted to 24,953.
The difference between the plan targets and accomplishment was largely attributable to under-evaluation of the number of natural increase in children of school age, and incomplete financial program.
Educational facilities at the level of middle and high school also expanded rapidly. As of December 1947 the number of public middle school was 280. But in 1960 it increased to 945. Such a rapid expansion obviously resulted in several undesirable problems: not only increased the financial strain of local governments, but also forced heavy burdens upon beneficiaries. At the same time, insufficient financial condition caused unsatisfactory operation of schools. For instance, it was announced that the number of teachers both in the middle and high schools, as of April 1960, was approximately one half that of required.
However, local expenditure for educational service rapidly increased over the year, in 1948 the expenditure for the primary school was a little over 2 million won, but in 1960 it reached to 53 billion won. On the other hand, the expenditures for middle school was 8 million won in 1951, but it rose to 1.1 billion won in 1960. indeed the increase in expenditure for educational service was remarkable. But over 50-60 per cent of the total expenditures was made for current expenses in 1953, and its ratio rose up to over 80 per cent in 1960. Thus it is clear that most of school expenditures was appropriated for teacher's salary and administration cost and so on.
Ⅴ. Summary and conclusion
It is clear that local government activities has been significantly expanded in 1950's but their self-governing activities were rather restricted. It is ascertained in revenue side, too. The relative importance of local governments own revenue, inclusive of local tax decreased from 41.8 per cent in to 28.4 per cent in 1960. In contrast, that of grants-in-and rose fron 58.2 per cent in 1951 to 75.6 per cent in 1960.
Although grants-in-aid give various advantages to local governments, they, in fact, have possibility to centralize governmental functions, as it was examined in the trends of local expenditure pattern. Thus, the fundamental issue, whether local autonomy is compatible with administrative efficiency. is presented in 1950's, but no clear solution was given at the decade.
On the other hand local governments took part in various development projects, but their achievements were almost unsatisfactory. It was largely due to incompleteness of planning itself, but, in part, insufficient financial casures by the central government. Furthermore the political condition did not allow the faithful local representatives to be elected for local assembly and local opinions to be reflected to the central government in 1950's.

목차 (Table of Contents)

• Ⅰ. 序 言
• Ⅱ. 地方經費의 膨脹과 支出構成의 變化
• 1. 支出規模
• 2. 支出構成의 變化
• 3. 團體別支出規模와 그 構成
• Ⅲ. 一般事業部門의 歲出
• 1. 戰時行政과 地方經費
• 2. 戰後再建과 公益事業部門의 擴張
• 3. 經濟事業部門의 推移
• Ⅳ. 特定事業部門의 歲出
• 1. 社會「서비스」의 內譯
• 2. 轉充用諸費의 增加와 그 意義
• 3. 團體別 一般事業部門의 歲出
• Ⅴ. 敎育事業部門의 歲出
• 1. 義務敎育機關의 擴張
• 2. 中等敎育機關의 擴張
• 3. 敎育事業部門歲出의 推移
• Ⅵ. 結 語