KLRI : KOREA LEGISLATION RESEARCH INSTITUTE

Ⅰ. Background and Purpose of Research

In the National Assembly's discussion on revising the fiscal constitution, Korea is classified as a country that processes budget based on non-legalism, such as Japan. Political advanced countries such as Germany, France, and the United States are classified as budget legalism. We intend to draw improvements to the current budget system by comparing and reviewing the advantages of budget legalism from a fiscal democracy perspective, and examining whether there is a real benefit of the budget legalism debate in Korea. The purpose of this study is to examine whether it is necessary to amend the constitution to budget law, and whether it is possible to draw conclusions consistent with fiscal democracy only by revising the law within the current system without amendments to the constitution.

In addition, the model of budget legalism that has been argued in the National Assembly is the American model, and the important norms on finance are not the fiscal constitutional model that must be stipulated in the Constitution, but the fiscal legalism model that is enacted by law. Since the United States has a structure in which the right to submit legislation is exclusive to the Capitol, some argue that the Capitol has the right to organize the budget because only the Capitol has the right to submit budget legislation. We will also examine whether these arguments are valid.

 

Ⅱ. Contents

The essential content of the budget law can be said to be the realization of an allocative justice that allocates the total amount of income by setting priorities among income for the people. Therefore, meeting the needs of the people is the most essential content. In particular, since the essential meaning of the law is a standard expressed in a document that is “the binding consent of the people's representative,” it should be considered that the essential meaning of budget legalism has already been realized in countries where democracy has been established, including the current constitution of Korea. This means that budget legalism is in line with the accompanying fiscal democracy and fiscal parliamentarism position.

However, adding additional parliamentary opinions, such as explanatory phrases or conditions and deadlines to make it easier for the public to understand, is far from the realization of the most essential purpose of meeting the people's demand, which is close to a means to realizing budget legalism. It is time to avoid discussions centered on debates that deviate from this essence.

In conclusion, the purpose of budget legalism has already been introduced in Korea, where the National Assembly, the representative of democratic legitimacy of the people, is a binding consent to the budget. However, there is a difference in the public's trust in state institutions according to the political situation of each country, and it eventually leads to the problem of the intensity of the parliament's control over the administration based on this. Since this is a natural result of fiscal democracy, the case of US budget law, which only resolves discretionary expenditures, should not be the basis for a legitimate constitutional amendment.

In Korea, the budget has general budget rules expressed in letters like general laws, but the budget below the standard does not include additional comments that can add numerical descriptions, conditions, and deadlines rather than letters. In this respect, it is different from budget laws in advanced countries such as the United States, Germany, and France, and while the laws take effect due to promulgation, promulgation is not a requirement for the effect of the budget.

In the end, Korea's budget has some characteristics of general laws, but it is difficult for the people to understand the number-oriented descriptions that are different from those of advanced fiscal democracies, so efforts should be made to explain them in text to make it easier for the people to understand. It seems that fiscal democracy can be developed by improving the people's right to know through documentation that can be improved without constitutional amendment.

As a financially advanced country, the people's right to know is an important argument for the real benefit of converting to budget legalism. It is expected that the normative power of administration control can be enhanced by realizing the right to know so that the public can understand it well through text-oriented description and establishing budget execution standards by specifying the conditions, deadlines, and methods of expenditure. This means that fiscal democracy cannot be realized only by improving the format of the budget, and true fiscal democracy can only be realized when parliament puts more time and effort into budget deliberation decisions.

Laws are bound to vary depending on situation in the country, and as the oldest legal adage indicating this is “when in Rome, do as the Romans do,” each country has common principles from a ‘Jus Soli’ point of view, but has differences in its own specific situation.

In Korea, the US system, the prototype of the presidential system, is said to be the best model without considering these differences, but most presidential countries around the world do not follow the American system. The Korean budget also does not use the term law in the constitution like Germany, France, or the United States, but it has the same budgeting and parliamentary voting procedures as Germany and France, and is similar to the German and French budget laws with some actual differences. There is also a provision called the Budgetary General Provisions, an important component of the law. It will now be of great help in revising the constitution that contributes to the establishment of a budget system that truly benefits the people from the perspective of fiscal democracy aimed at by budget legalism, away from the abstract, formal debate on budget legalism.

 

Ⅲ. Expected Effects

Through this research, after comprehensively reviewing the proposition for introducing budget law constitutionalism that the Constitutional Advisory Committee under the National Assembly Speaker has continuously raised from 2008 to 2023, we reach the conclusion that fundamental reconsideration is necessary from the perspectives of both theoretical foundation and substantive effectiveness. The current discussion on budget law constitutionalism is evaluated as having deviated from its original purpose of strengthening fiscal democracy, excessively concentrating on formal aspects while overlooking substantive improvement measures that are truly important. In particular, the attempt to apply the American-style budget law constitutionalism model uncritically to Korea's reality is being undertaken without sufficiently considering Korea's specific political and economic characteristics, which is assessed to carry a significant risk of actually causing instability in fiscal governance.

Ultimately, the core of the discussion on amending Korea's fiscal constitution should not be about changing the form of the budget into law, but rather about how to substantively improve the operation of the budget. The essential substance of a budget is the realization of distributive justice by setting priorities among national revenue and allocating the total amount; what is most important is to accurately identify the needs required by the people and effectively fulfill them. Just as the principle of taxation by law implements the principle of "no taxation without representation" from the Glorious Revolution, the essential meaning of budget law constitutionalism is realized through a control mechanism of "no expenditure without binding consent by the people's representatives.

From this perspective, Korea already implements the core of fiscal democracy—controlling the budget through binding parliamentary resolution—and therefore can be evaluated as having substantially achieved the essential intent of budget law constitutionalism.

Consequently, future discussions on fiscal constitutional amendment should move away from formal debate regarding whether to introduce budget law constitutionalism and instead focus on substantive measures to strengthen fiscal democracy, including: guaranteeing the people's right to information, enhancing budget transparency, strengthening the National Assembly's budget deliberation capacity, achieving balanced division of authority between the legislature and executive, and securing fiscal soundness.

In conclusion, we conclude that genuine improvement of the budget system is possible only through continuous development of processes and institutions that accurately identify the people's needs and transparently and responsibly realize them, rather than through the adoption of any particular form. We hope that future discussions on fiscal constitutional amendment will continue based on this research.