The Supplementary Budget in South Korea: Characteristics and Policy Implications

The government's supplementary budget, unlike the main budget, represents funding granted for emergency circumstances throughout the year. This study uses a rich dataset from South Korea to examine the characteristics of the supplementary budget compared to the main budget with regard to its formulation and execution. The analysis indicates that, first, projects that change during parliamentary deliberation on the main budget from the previous year tend to be reorganized into the supplementary budget. Second, the supplementary budget has a significant impact on the amount of unused budget. Third, the supplementary budget's level of year-round volatility is high, and it has a rapid rate of execution. While these results do not provide exhaustive evidence for evaluating the rationality of the supplementary budget, they do suggest the necessity of maintaining reasonability in the supplementary budget, considering the restrictive environment that the supplementary budget faces and its possible consequences.