Ideology, intergovernmental transfers, and public health spending: Evidence from South Korea

Youngho Kang, Dongwon Lee and Sujin Min

Regional Science and Urban Economics, 2025, vol. 110, issue C

Abstract: This paper asks whether political ideology affects local government policies through intergovernmental transfers. When local governments depend on intergovernmental transfers, and the upper-tier grantor government has a limited ability to target resources at the local level, the grantor government may use transfers to indirectly promote local public goods that reflect its political ideology. Using data from 226 South Korean municipalities within 15 regions, we show that municipalities located in regions with left-wing regional governments receive significantly more health subsidies from the regional government than those located in regions with right-wing regional governments. The increase in health subsidies leads to greater municipal health spending. Our findings are consistent with the view that party and ideology influence local government policies.

Keywords: Government ideology; Public health policy; Local government policy; Intergovernmental transfers (search for similar items in EconPapers)
JEL-codes: D70 H71 I18 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:110:y:2025:i:c:s0166046224001054

DOI: 10.1016/j.regsciurbeco.2024.104074

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