The Use of Financial Information for Budget Cuts under Unprecedented Fiscal Pressure

Bong Hwan Kim, Jun Hyun Yun and Inkee Jang

Hitotsubashi Journal of Economics, 2025, vol. 66, issue 1, 1-27

Abstract: We investigate the utilization of financial information by the central government and policymakers for budget cuts under unprecedented fiscal pressure caused by COVID-19 in South Korea. Previous research (Helden, 2016; Raudla and Savi, 2015) strongly suggests the possibility that, owing to several reasons including time pressure, constrained analytical capabilities, and the political nature of the budgetary process, financial information might not be used for budget reductions under unprecedented fiscal strain. However, we find that financial information, which is simple but provides useful information to identify the progress of government projects, is utilized for budget cuts even under such fiscal stress.

Keywords: financial information; executed budget; unused budget; budget cuts; budgetary process (search for similar items in EconPapers)
JEL-codes: H5 H6 H8 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitjec:v:66:y:2025:i:1:p:1-27

DOI: 10.15057/hje.2025001

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