Abstract
Local governments are closer to the people especially in the context of democratic governance than other units of governments. ‘Determinants of government expenditure’ is therefore a recurring theme both in government and scientific discourse. This study intends to develop and test a comprehensive and systematic model on the allocation of government expenditures in urban councils in Sri Lanka to identify the key determinants of local government expenditure decisions. Therefore, the study considers three major perspectives, socio-economic, political and governmental and justifies the relevancy of models of expenditure determinant research. This is a research. The first premise is that local government expenditure varies on the mixture of socio-economic, political and governmental factors. More socio-economic variables in the model indicate a demand driven aspect in local government resource allocation. Local government’s tax effort is a significant fact together with financial transfers from the central government in expenditure decision-making. As policy implications participatory budgeting system and strengthening of the local revenue base are proposed. Sri Lanka Journal of Development Administration, Vol. 5, pp. 93-108, 2015
Highlights
Local governments are closer to the people especially in the context of democratic governance than other units of governments
In the light of the said explanation this study intends to develop and test a comprehensive and systematic model on the allocation of government expenditures in urban councils in Sri Lanka to identify the key determinants of local government expenditure decisions
Considering the explanatory variables used in the abovementioned models, population density, education and the health conditions of the local population and the level of commercialisation of the locality were considered in explaining the socio-economic aspect of the model relevant to the Sri Lanka
Summary
Local governments are closer to the people especially in the context of democratic governance than other units of governments. In a broader sense this empirical research intends to explain the socio-economic, political dichotomy of the existing literature by integrating governmental perspective in modelling the expenditure decisions of the urban councils of Sri Lanka. The following literature review explains the determinants of socio-economic, political and governmental factors affecting local government decision making in general.
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