This entry aims to enhance the legislative cost estimation system in South Korea by conducting a comparative analysis with the Congressional Budget Office (CBO) in the United States. The analysis reveals significant structural divergences between the two systems. First, the US system operates under binding fiscal rules like PAYGO, whereas the South Korean system functions primarily as an informational tool. Second, a severe workload imbalance exists; South Korean analysts at the National Assembly Budget Office (NABO) handle approximately 12.7 times more estimates annually than their US counterparts, placing a substantial burden on personnel. Third, unlike the US, South Korea lacks institutional mechanisms to alleviate this workload or enforce the utilization of cost estimates. The findings suggest that expanding NABO’s analytical workforce and institutionalizing the linkage between cost estimates and legislative decision-making are essential for improving fiscal efficiency.
Legislative cost estimation serves as a critical preventive mechanism against fiscally irresponsible legislation [
1,
2], promoting responsible policymaking and government accountability [
3,
4]. Ultimately, it ensures the efficient and rational management of government funds [
2,
5]. Ideally, accurate cost estimates enable legislators to weigh the financial implications of bills before enactment, thereby reinforcing fiscal discipline.
South Korea introduced its cost estimation system in 1973, incorporating it into the legislative process [
5,
6]. However, the system’s early implementation was limited; historically, less than 5 per cent of bills included cost documentation, and the quality of cost estimation reports has been criticized for lacking objectivity and accuracy [
7,
8]. Since the establishment of the National Assembly Budget Office (NABO) during the 16th National Assembly, the volume of budget-related bills has surged, reaching 8341 in the 21st National Assembly. Despite this quantitative expansion and institutional development, South Korea’s cost estimation system has remained largely unchanged in its operational framework.
The sharp increase in budget-related legislation has significantly expanded NABO’s workload, limiting the system’s effectiveness in achieving its original objectives [
9]. A fundamental issue lies in the nature of the system: unlike the United States (US), where cost estimation strengthens the federal legislature’s budgetary authority through binding mechanisms, South Korea’s system functions primarily as an informational tool for lawmakers. Consequently, despite the exponential rise in budget-related bills, the cost estimation system is underutilized due to a lack of institutional mechanisms that mandate the integration of cost estimates into the legislative decision-making process.
By contrast, the US has developed robust institutional mechanisms that facilitate the practical application of cost information. For instance, the Pay-As-You-Go (PAYGO) system and mandatory fiscal impact assessments ensure that cost information is systematically utilized, thereby enhancing its practical relevance in the policymaking process [
2,
5].
This entry aims to conduct a comparative analysis of the legislative cost estimation systems in South Korea and the US, focusing on their institutional background, operational mechanisms, and practical utilization. Specifically, it examines how the system functions in each country, including the scope of cost estimation, workload distribution among dedicated personnel, and the structural differences in applying cost estimates to the budget process. By highlighting the operational divergence between NABO and the Congressional Budget Office (CBO), this entry seeks to provide policy implications for enhancing the effectiveness of fiscal scrutiny in South Korea.
This entry is adapted from the peer-reviewed paper 10.3390/encyclopedia6010021
