The determinants of government expenditure is a recurring theme both in
government and scientific discourse. Apart from the central government, local
governments are significant in enhancing the community wellbeing and encountering
new challenges due to the changing circumstances in which they operate in. There
exist few studies on this subject in the Sri Lankan context; therefore focus on Sri
Lanka is interesting for several reasons.
This study is mainly conducted with three main objectives, and those can be
specifically stated as follows.
1) To study the major determinants, trends and differences in level of
local government expenditures in Sri Lanka
2) To explain the differences in the level of local government expenditures
by identifying their determinants
3) To propose policy measures based on the models towards promoting
the welfare and comfort of the citizens at the local level
The main theories underlined in this research are the median voter theory and
the utility maximization assumption in the context of the public choice approach. The
proposed model was built upon the general approach to expenditure research.
In terms of research design, the dependant variable in this research is local
government expenditures, and the independent variables stem from socioeconomic
characteristics, political characteristics, and governmental characteristics.