The Effect of Decentralization on Economic Growth in Korea: The Role of the Implementation of Local Autonomy

  • Kwang Bin Bae Dongguk University, Department of Public Administration
  • Sangheon Kim Seoul National University, Graduate School of Public Administration; Korean Institute of Public Affairs
Keywords: decentralization, economic growth, local autonomy


This study examined the effect of decentralization on economic growth and, unlike previous studies, it also empirically analyzed how the implementation of local autonomy affects economic growth. Our analysis of government data from 16 metropolitan areas, covering the 1989-2012 period, indicated that decentralization has consistent positive effects on both the real and nominal gross regional domestic product (GRDP) growth rate. These results imply that regional decentralization improves the efficiency of resource allocation in the public sector and thus contributes to economic growth.


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