Fiscal decentralization and rural ecotourism: Assessing the capacity of local budgets to improve life quality in Kazakhstan

Type of the article: Research ArticleAbstractThis paper aims to quantitatively assess the functional capacity of local self-government (LSG) budgets to implement green economy strategies. This study uses longitudinal budget data from Turkestan, an administrative region of Kazakhstan (2019–2024), applying correlation and regression modeling. Four econometric models were constructed to define the dependencies between total revenues, transfers, tax yields, and expenditures of rural administrations.The empirical analysis identifies a critical level of vertical fiscal imbalance: the correlation between aggregate revenue (D01) and external transfers (TR-P) reached r = 0.991 (p lt; 0.01). Regression diagnostics confirm that 98.1% of revenue variance and 98.4% of expenditure variance are dictated by centralized subventions. The study uncovers a state of “budgetary mirroring” (a coefficient of 0.9938 in the expenditure-to-revenue model), in which approximately 99.4% of every tenge received is immediately absorbed by operational costs, effectively neutralizing long-term investment in ecotourism infrastructure. Conversely, an endogenous growth lever was detected: a strong correlation (r = 0.898) between tax yields and the sale of fixed assets. A second-order polynomial model (R² = 0.933) reveals a compounding acceleration in local tax generation, suggesting that the region has reached a fiscal inflection point with the potential to transition toward a self-sustaining development model.To transform ecotourism into a sustainable economic driver, rural governance must shift from a “survivalist” management model to one of active asset stewardship. We recommend reforming transfer architectures to include performance-based grants specifically earmarked for green infrastructure and the commercialization of municipal property.