The Korea Local Administration Review

This study analyses the impact of converting categorical into block grants on local government expenditure. Decentralization revenue sharing system has an important means not only transferring social welfare service from central to the local government but also starting the block grants system on the part of social welfare service. So this paper focused on the effect of the intergovernmental grants such as conditional grants, unconditional grants, block grants on the local government's social welfare expenditures. As a result I found two important things about the local government expenditures regarding the intergovernmental grants. First, block grants and general grants are positive relation to the social welfare expenditures. Second, general grants whether block grants are excluded or not has positive relation to the social service expenditures. It consistently found that if we give more fiscal power to local government, it leads to more social welfare expenditures.