Adoption of a separate capital budget in local governments: Empirical evidence from georgia

Adoption of a separate capital budget in local governments receives little attention in the literature. It is important to look at various capital budgeting practices in local governments since a separate capital budget as different budget format and structure affects budgetary decisions, thus leading to different levels of investment in public infrastructure. This paper examines factors that facilitate or impede adoption of a separate capital budget by using time series data. Results show that local governments are more likely to adopt a separate capital budget in order to reflect local demands such as growth rate in capital spending.