Smart-City Fiscal Dynamics in KOREA : Allocation Driven by Need (Aging), Capability (Education), and Scale

• In Event: Reforming and Renovating Local Governments in South Korea

Abstract

This study tests where, why, and according to what logic Korea’s local governments allocate smart-city budgets in the early AGI era. Using a panel of the 17 metropolitan/provincial jurisdictions from 2018–2023, we classify smart-city outlays via a rule-based keyword audit and model the logarithm of per-capita smart-city expenditure as a function of need (elderly population share), capability (college enrollment rate), and scale (log GRDP), with year fixed effects and region-clustered robust errors; two-way fixed effects provide robustness. Contrary to the common “young-city” premise, baseline estimates indicate that both aging and education are positively associated with per-capita smart-city spending, and economic scale also exhibits a positive effect. Substantively, results imply that local smart-city finance in Korea operates less as a growth or branding instrument and more as everyday risk-management infrastructure for aging societies—targeting care, safety, assisted mobility, telehealth, and environmental monitoring—while scaling more readily where human capital and technology acceptance are stronger. We argue that local smart-city investment is best understood as a function of need × capacity rather than pro-innovation preference alone. Policy implications include prioritizing digital inclusion for older adults, pairing technology procurement with human-capital development, and calibrating intergovernmental transfers to demographic risk profiles and absorptive capacity.

Authors

• Jiwon Han, Sungkyunkwan university
  Presenting Author

• Hyung Jun Park, Sungkyunkwan University
  Non-Presenting Co-Author