This paper tries to show the efficiency of water financing between central and local governments. From the year of 2017, the operation and maintenance costs for change water pipes has been provided by central government as block grants system(RDSA: Regional Development Special Account). Even though the water financing is responsible for local government, water drought and high production cost in poor area affects the quality of life nowadays. Then, fiscal transfer through block grant for water financing has been decided to invest regional SOC. The purpose of the paper sheds light on the function of the block grant for public provision by water financing. The firstly tried empirical results are based on the survey from local governments and ministry of environments. The point of the empirical analysis shows that the local governments does not have proper measurement for unexpected water leakage and termination until now. In a policy manner, the paper raises the issues about benefit principle for water users by the increase of tariffs. In order to do so, the paper investigates the relationship between the water provision and fiscal status of each local governments.

This study proposed the introduction of the block grant in agriculture, forestry, and fishery sectors so that the local governments get greater autonomy in agricultural policy. First of all, theoretical background on block grant was reviewed and present situation in Korea regarding block grant was examined. Four criteria were set to evaluate the eligibility for the block grant. Four criteria imply that block grant is more appropriate with small-scaled similar projects, high locality projects, easily evaluated projects, and easily formula-applied projects. Applying these criteria to the projects subsidized by the national government, appropriate projects as the block grant were selected. Finally, specific operation scheme of the block grant was proposed.