| Abstrakt: |
This paper investigates how COVID-19 affects Defense Reform (DR) 2.0 in South Korea from a budget perspective. The Korean defense reform, which was launched in 2006, has rarely met its annual budget requirements. Following Korea's budget decision-making process, this paper examines the reasons for the defense budget shortfall. A vector autoregressive (VAR) analysis with annual Korean data shows that both the national debt and government budget significantly influence the defense budget. This result implies that a stable DR 2.0 stance can be maintained by an expansive fiscal policy against COVID-19 in the short term. However, COVID-19 would lead to a lower defense budget due to increasing national debt in the midterm, which limits implementation of DR 2.0. This paper's findings can help policymakers design new strategies for securing the defense budget after the pandemic. [ABSTRACT FROM AUTHOR] |
