South Korea's Budget Waste Reporting System: A Case Study for China

Recently, China’s fiscal reform to improve government fiscal efficiency has taken center stage. Improved fiscal efficiency allows for the development of a virtuous cycle of transparency, public engagement and budget supervision. The budget waste reporting system implemented in South Korea can be used as a case study example for building such a virtuous cycle. In fact, such a system does indeed help Korea achieve budget reductions. Academic studies in China on how to improve fiscal efficiency have so far centered on areas of transparency, public engagement and supervision. The budget waste reporting system implemented by Korea has demonstrated a virtuous cycle relationship among these systems and is thus of great significance. For the Chinese government, first priority to implementing such a system should be given to improving the system of information disclosure. This means that rather than simply disclosing the budget information, the public should be engaged in how to comprehend such disclosures. Not only can the implementation of such a system in China directly achieve budget cuts, it can also play an important role in improving fiscal transparency and household welfare.