The Korea Local Administration Review

This study analyzes the financial impacts of the city-gun consolidation executed in 1994-5. The sample of the study includes 30 consolidated cities and 30 non-consolidated cities as a comparison group. The reduction in personnel cost seems to be obvious as the personnel cost was reduced by 8% in the consolidated cities. The personnel cost in the consolidated cities is smaller than that of the non-consolidated samples by 1.5%. The cost of general administration was reduced by 2% after consolidation. However, this does not mean that the consolidated cities are more efficient than the non-consolidated cities in terms of the cost of general administration. The consolidated cities spend a larger portion of their budget for general administration by 2%. The impact of the city-gun consolidation on financial equalization is felt more in cities than in guns. The results of multiple regression show that per capita administration cost is negatively related with the population size in the consolidated cities, and that the reduction of personnel cost due to consolidation is larger in more urbanized areas.