A Preliminary Study for Improvement of Local Finance Adjustment System for a Unified Korea - A Case of Germany -

In this study, the author examined the basic structure of the German local treasury appropriation system and its management in practice after the unification. Germany maintained the institutional apparatus that would allow the local governments in the former West German region to participate in the financial aid to the local governments in the former East German region, in particular, through the horizontal financing system. If Germany was only adopting a vertical financing system, it would have put added burdens on the federal government in financing the reconstruction of the East Germany. Given that the German federal government engages in consultation and coordination, rather than exercising unilateral directive and control in the case of collaborative works carried out jointly by the federal and state governments, it still gives us a compelling case even after considering the characteristics of the federalism.