KLRI : KOREA LEGISLATION RESEARCH INSTITUTE

I. Background and Purpose of Research

○ Need to strengthen the responsibility of local government heads due to the expansion of autonomy and decentralization

- Previous governments have promoted decentralization policies, and the Yoon Seok-yeol government has also set a national goal of ‘a local era where people can live anywhere in Korea’ and is promoting related policies

- Over the past 30 years since the implementation of the local autonomy system, the authority of local government heads has expanded due to the expansion of autonomy and decentralization

- In particular, in 2020, the Local Government Devolution Act was enacted to transfer 400 national affairs of 16 ministries to local government affairs, and in 2021, the Local Government Act was comprehensively revised to diversify the composition of institutions, introduce special cities and special local governments, establish a central-local cooperation council, introduce a resident ordinance proposal system, strengthen resident autonomy, establish the authority of the speaker of the local council to appoint local council staff, and expand the local consumption tax rate by revising the Local Tax Act, thereby expanding the authority of local government heads. 

- In 2024, the ‘Regulations on Administrative Organizations and Staffing Standards of Local Governments’ was revised to rationalize the requirements for establishing organizations and expand the authority of local government heads in personnel and organization by establishing the standards for establishing local government organizations by ordinance. 

- In response to the expansion of the authority of local government heads due to the expansion of autonomy and local decentralization, it is urgent to devise measures to secure the accountability of local government heads.

○ Due to the diversification of the hierarchical structure of local governments need to strengthen the responsibility of local government heads

- Metropolitan local governments are divided into special cities, metropolitan cities, provinces, special self-governing provinces, and special self-governing cities

- Special cities and metropolitan cities have a two-tiered structure of cities and districts. The local autonomy system is operated in a diversified form with a three-tier structure of city, county, and district, Jeju Special Self-Governing Province and Sejong Special Self-Governing City as a single-tier structure, and Gangwon Special Self-Governing Province and Jeonju Special Self-Governing Province as a three-tier structure of city, county, and district.

- Discussion on strengthening the accountability of heads of special local governments due to the absence of a resident recall system for special local governments

- Discussion on strengthening accountability due to the excessive authority of heads of local governments with a single-tier structure

○ Strengthening the accountability of heads of local governments in response to population decline and regional extinction due to low birth rate and aging population

- The region is facing a crisis of regional extinction due to low birth rate and aging population, changes in population structure, and concentration of population in cities and metropolitan areas.

- 89 regions with population decline and 18 regions of concern for population decline have been designated, and in the case of regions with population decline, local financial independence is low, so efficient and economical local financial management responsibility is required from heads of local governments

- Local government heads must be held accountable for ensuring that their authority is in line with local conditions and the needs of residents, and for ensuring the efficiency, effectiveness, and soundness of financial management.

 

Ⅱ. Contents

▶ Need for changes in the local autonomy environment and strengthening of responsibility

○  Current status of changes in the local autonomy environment

- The 2021 fully revised Local Autonomy Act strengthens local legislative powers so that matters delegated by law to be determined by ordinance cannot be restricted or directly regulated by law, and also strengthens resident autonomy. In addition, the same Act stipulates the introduction of a resident ordinance proposal system, special local autonomous entities, and special cities, and the establishment of a central-local cooperation council, while the Regional Balanced Local Decentralization Act stipulates the formation of resident autonomy councils.

- From the Kim Dae-jung administration to the Yoon Seok-yeol administration, previous governments have established legislation to strengthen local decentralization and autonomy.

- In particular, the Yoon Seok-yeol government is promoting related laws and policies by reflecting local opinions through the Central-Local Cooperation Council, and is attempting to set goals based on fiscal autonomy, expand autonomous financial resources, improve the balanced development special account and national treasury subsidy system, and improve the local financial crisis management system. However, compared to previous governments, the policies and institutional improvements for fiscal decentralization and strengthening autonomy are insufficient.

- 139 out of 228 basic local governments (57%) are at risk of regional extinction, the female population in their 20s and 30s is less than 1/5 of the elderly population over 65 years old, and local finances such as local financial independence are worsening.

-  In order to respond to population decline and regional extinction through large-scale regional development and economies of scale, the Busan-Ulsan-Gyeongnam Special Local Government and the Daegu-Gyeongbuk Administrative System Integration were promoted, but they fell through due to conflicts of interest among local government heads. However, the Busan-Ulsan-Gyeongnam Super-Wide Economic Alliance and the Chungcheong Local Government Alliance are promoting special local governments.

- Starting with the decentralized state model of Jeju Special Self-Governing Province, Gangwon Special Self-Governing Province and Jeonbuk Special Self-Governing Province were created, forming autonomy that takes into account regional characteristics.

- Special cities such as Changwon and Suwon are being launched to improve legal and institutional systems.

▶ In response to changes in the local autonomy environment Strengthening the accountability of local governments

○ Responsibility of local government heads

- Local government heads have comprehensive authority over local government affairs, including the right to oversee affairs, inherent authority delegated by law, the right to perform state affairs, the right to delegate affairs, the right to appoint and dismiss employees, the right to request reconsideration of local council resolutions and the right to file a lawsuit, the right to prepare budgets, and the right to preemptively dispose of matters. They coordinate regional interests and, as servants of the people, have legal and political responsibilities as stipulated in the Local Autonomy Act and individual laws and regulations.

○ Legislation to secure the accountability of local government heads

- As servants of the people under the Constitution, ethical and political responsibilities, state compensation responsibilities, and political accountability systems through public elections are established.

- The accountability of local government heads can be secured through the right to vote by residents under the Local Autonomy Act, the right to request audits and resident lawsuits, and the right to recall residents, and the right to vote on budgets by local councils, the right to approve budgets, the right to personnel hearings, the obligation to submit local council data, reporting on matters to be processed, and Q&A. Securing the responsibility of local government heads through obligations - Soundness and efficiency of local finances under the Local Finance Act. To ensure economic feasibility and planning, the responsibility of local government heads is secured through medium-term local finance plans, performance-based local finance management, restrictions on local bond issuance, regulations on guaranteed debt obligations, local finance impact assessments, investment reviews, feasibility studies, restrictions on local bond issuance by heads of financial crisis-designated organizations, and establishment of emergency finance management plans.

- The responsibility of local government heads is secured through the obligation to establish and implement population reduction area response plans and implementation plans under the Population Decrease Area Support Act, the obligation to cooperate by concluding regional investment cooperation agreements, and the responsibility for administrative and financial support for population reduction area management.

▶ Measures to strengthen the responsibility of local governments in response to changes in the local government environment

○ Personnel authority and personnel hearings

- Personnel authority is recognized as an inherent authority of local government heads and is subject to restrictions as prescribed by law, and personnel hearings are recognized for vice-chairmen, etc., but, as in the case of Japanese legislation, it is an independent agreement system with local government heads. Since there is no personnel committee as an institution, the personnel committee should be established as an independent institution, and the personnel committee should be allowed to establish autonomous regulations within the scope that does not violate laws and ordinances.

○ Rationalization of the term of office of local government heads

-  Although a three-term consecutive term system is in place for local government heads, most of the metropolitan local government heads are elected from the National Assembly, and in order to prevent corruption through collusion with local forces and to hold them politically accountable based on the principle of effective economy and balance by residents, it is reasonable to establish a two-term consecutive term system for 16 years, as in the legislative examples of the United States and Italy.

○ Strengthening the accountability of local government heads through the local audit office

- In order to hold local governments legally accountable under the Local Autonomy Act, there are duplicate audits such as the National Assembly’s state audit, the Board of Audit and Inspection’s office and accounting audit, local affairs audit by members of the local council, and self-audit by the head of the local government, making it difficult for the head of the local government to actively administer. However, rather than having an auditor independent from the head of the local government like in Japan and the UK, a local audit office independent from the head of the local government should be established from the perspective of decentralization, as in the French legislative example, to strengthen the autonomous audit authority over local government.

○ Metropolitan Strengthening the accountability of special local governments through the establishment of governance

- Since the head of a special local government is not recognized as having the right to request dismissal by a resident recall, the head of the special local government and members of the constituent local council should be directly elected by residents, as in Japan's legislative example, and the right of residents to request an audit and request a change in regulations should be explicitly recognized

○ Measures to secure the accountability of local government heads through strengthening resident participation

- The current Local Autonomy Act adopts the principle of resident audit requests as a necessary prerequisite to resident lawsuits, but does not regulate the legal requirements of resident audit requests by distinguishing between direct requests and resident audit requests, as in Japan's legislative example. However, in order to secure the accountability of local government heads through resident audit requests, the financial accounting activities and office execution of local governments should be distinguished, and the number of resident audit requestors for the execution of local government affairs should be the same as the current number of residents aged 18 or older with the right to vote in the relevant local government. It is reasonable to require a petition for a resident audit of financial accounting activities, and by allowing even one resident aged 18 or older of the local government to file a petition for a resident audit of financial accounting activities with the local audit office, the appropriateness of financial accounting operations, the protection of residents' interests, and the soundness of local finances should be improved.

- The local government recall system under the Local Autonomy Act can hold local government heads accountable for their regional egoism regarding policies, and it is unreasonable to suspend the exercise of  legal authority by local government heads during the recall procedure to hold them politically accountable despite the absence of illegal acts such as violations of laws. Therefore, as in the case of the California legislative example in the United States, the number of signatures of the total number of residents’ recall votes should be 10%, but the number of signatures of voters should be relaxed in reasonable proportion to the population. In addition, if 20% of the total number of residents’ recall voters participate in the referendum, dismissal should be made with the approval of a majority of valid voters.

▶ Measures to enhance the efficiency, accountability, and soundness of local financial management through strengthening fiscal decentralization

○ Expansion of fiscal decentralization and autonomous accountability by local government heads

- The Ministry of Finance has implemented fiscal decentralization by establishing a tax structure centered on acquisition tax, property tax, and registration tax, and newly establishing local consumption tax and local income tax in order to expand fiscal decentralization. However, it is not a 6:4 tax structure that allows local governments to provide collateral based on autonomous responsibility.

-The Yoon Seok-yeol government is trying to realize fiscal decentralization through the head of the Central Cooperation Council, but even in the 1st Local Government Comprehensive Plan (2023-2027) announced by the Local Government Era Committee, fiscal decentralization policies are insufficient compared to previous governments, and the local government financial crisis management system is being improved to secure the soundness and responsibility of local finances.

-Therefore, local government heads should actively apply the flexible tax rate under the Local Tax Act and convert comprehensive real estate tax, transfer income tax, and individual consumption tax from national taxes to local taxes so that the tax structure can be 6:4.

○ Problems and improvement measures of individual local financial management systems

-When establishing a mid-term local financial plan, the lack of linkage between the performance management plan or the annual local financial plan and revenue and expenditure management plan based on the plan causes difficulties in securing local financial soundness, efficiency, and economy, and it is difficult for local government heads to actively establish financial plans.

-As in the case of Germany, annual local government financial plans should be established based on the mid-term local government financial plan to ensure financial soundness, efficiency, and economic feasibility. However, the annual local government financial plans should clearly reflect the principles of local finance soundness, efficiency, and economic feasibility in the performance management plan, and should also be linked to the performance management plan.

-The Local Finance Act does not have legal standards for the necessity of financial investment projects among the financial performance management systems, and in the case of feasibility studies, the scope of exceptions to the feasibility studies of financial investment projects is too large, making it questionable whether the principles of efficiency and economy can be realized through feasibility studies. However, the principles of efficiency and economy The most advantageous relationship between the purpose and the resources used should be pursued by specifying it in the local finance law, and the maximum effect should be achieved by using the minimum resources.

▶ Measures to secure the responsibility of local government heads in response to population decline and regional extinction

○ Establishing livable social infrastructure and cultural infrastructure

-Spain, the UK, and France have different historical and political backgrounds for decentralization and strengthening autonomy, and the degree of local autonomy guaranteed by the constitution is different, but in the process of responding to population decline and extinction, it is necessary to introduce a one-country, multi-system in which the authority of each metropolitan autonomous body is significantly different.

-In particular, regulations should be established so that local government heads can establish livable social infrastructure and cultural infrastructure and provide familiar administrative services to residents, and special local governments or administrative system reforms should be rationally implemented.

○ Establishing a tax support system to guarantee residential rights

- In order to ensure stable settlement and mobility for Spanish immigrants, local government heads should proactively design public incentives (settlement subsidies, income tax reductions, etc.) and actively provide administrative and financial support.

○ Incorporate the principle of solidarity into the Constitution

-Our country's legislative system does not provide for the principle of solidarity, but in order to effectively respond to population decline and regional extinction, the principle of ensuring solidarity should be stipulated in the Constitution.

 

Ⅲ. Expected Effects

▶ Establishing a legal system for the accountability of local government heads in response to the diversification of local autonomy

○ Improving the legal system related to the accountability of local government heads in response to changes in the local autonomy environment

-Previous studies focused on strengthening local autonomy accountability in response to the expansion of local autonomy and decentralization, but considering the maturity of local autonomy, expansion of local autonomy authority, flexibility in the structure of local government systems, population decline, and regional extinction, we are preparing legislative improvement measures to secure administrative and financial accountability of local government heads.

○ Promoting follow-up research on strengthening the accountability of local government heads in response to changes in the local autonomy environment

-There is no research on the system for securing the accountability of local government heads in response to changes in the local autonomy environment, domestically or internationally, but this report can promote follow-up academic research.

○ Proposing guidelines for the judiciary related to the accountability of local government heads in response to changes in the local autonomy environment

-Clearly presents legal standards for securing the responsibility of local government heads in response to changes in the local government environment.