Determinants of Strategic Spending Behavior in Local Governments: Focusing on Fund Execution and Local Matching under the Local Depopulation Response Fund

Key Points

• The aim is to empirically analyze the spending behavior of local governments under the Local Depopulation Response Fund.
• Conducted a fixed-effects panel regression analysis on 107 local governments from 2022 to 2024.
• Focused on the influence of budget autonomy and population decline on fund execution and local matching rates.
• Applied 2nd generation fiscal federalism theory and planned behavior theory as frameworks.
• Higher budget autonomy and greater population decline were associated with lower fund execution and local matching rates.
• An increase in direct project proportion from higher-level governments positively influenced fund execution and local matching rates.
• Indicates that lower constraints on resource use foster strategic spending behavior in local governments.

Abstract