Using the actual and budgeted expenditure data of 241 South Korean local governments
from 2010 to 2015, we find that budget decreases in the case of underspending are larger
than budget increases in the case of overspending, which is in contrast to the asymmetric
budget ratcheting pattern documented in prior studies. More importantly, we find that budget
increases in the case of overspending are stronger when government officials have greater
bargaining power as proxied by local governments located in the metropolitan area, having …