In a meeting with her senior secretaries last week, President Park Geun-hye emphasized the need to make public the details of local public finance. She said residents should be allowed to look into specific expenditures by their municipal governments and due attention should be paid to their opinions.

Her remarks echoed increasing public concern about the moral laxity of local governments that have been piling up debt through reckless spending subject to little effective oversight.

Officials at the Ministry of Security and Public Administration say the debt owed by provincial governments is estimated to reach 40 trillion won ($35.4 billion), based on stricter accounting rules it adopted this year. Counting in borrowings by regional public corporations, the local public sector’s debt is tallied at more than 100 trillion won.

In a move that should put local officials on alert, the ministry plans to disclose each municipal government’s debt calculated on a stricter basis in October. It is hoped that the measure will help enhance the soundness of local finance and strengthen its self-purification function through comparison between regional administrations.

The ministry is preparing to take other moves to reveal more information on the executives and operations of local public corporations and oblige municipal governments to make public the entire process of projects placed by them. It will also help residents with their monitoring work by disclosing the costs of events and festivities organized by local governments.

In order to further enhance the transparency and accountability of local finance, consideration should be given to the question of increasing autonomy from the central government. According to figures from the Public Administration Ministry, the average fiscal self-reliance ratio of regional governments in Korea has continued to decrease in recent years ― from 53.9 percent in 2008 to 52.2 percent in 2010 and further down to 51.1 percent this year.

Excluding expenditures on education, last year’s fiscal spending was nearly equally split between the central government and local administrations with 42.8 percent and 42.2 percent, respectively. But only 20.7 percent of the 2012 tax revenues were collected by provincial administrations, meaning they rely on the central government for about half of their spending. The proportion is far lower than 50.4 percent in the U.S., 48.1 percent in Germany and 44.9 percent in Japan.

Measures should be strengthened to enhance the transparency and efficiency of local finance by placing it under tighter public scrutiny. But the fundamental improvement will come with the resolution of the structural problems of the local finance system. The overreliance on support from the central government will continue to encourage irresponsibility at local administrations and weaken their will to establish fiscal autonomy.

It may be necessary to form a commission comprising private experts, representatives from public organizations as well as central and local administration officials to work toward local finance reforms. The combination of more tax revenues collected by regional governments and stricter monitoring by residents, such as around-the-clock checks on specific fiscal information on the Internet ― could be an efficient solution.