A Study on the Factors Influencing the Size of Budget Slacks in Local Governments: Focused on the Use of Budget Execution Rate in Local Fiscal Analysis

This study aims to identify the causes and influencing factors of budget slacks in local governments analyzing unexecuted budgets. This study conducts an empirical analysis to explore the factors affecting size of budget slacks in local governments, utilizing variables such as socio-economic conditions, administrative capacity, fiscal characteristics, and political factors. Analytical results show that various factors including socio-economic conditions, administrative capacity, fiscal capacity, and political environmental pressures influence the budget execution rates of local governments. As anticipated, variables such as population size, income level, administrative capacity, fiscal health, and political cycles play significant roles of determining the degree of budgetary slacks. This study provides some implications. Budgetary slack is not only a product of internal administrative dynamics but is also shaped by broader structural and political conditions. However, this study also has several limitations regarding to restricting the period of data. It employs a limited set of explanatory variables and cannot fully establish causal relationships between the determinants and budgetary slack. Despite the above limitations, this study reveals that policymakers and public administrators should proactively consider these contextual factors such as fiscal dependency, investment structures, and election timing when formulating and implementing public budgets.