Changes in Central Government Regulations Affect the Use of Accumulated Funds from Large Local Administrative Organizations to Provide Public Services

Abstract

The current level of accumulated funds of local administrative organizations (LAOs) is high, which is considered a loss of development opportunities for local communities, especially for large local administrative organizations. The Ministry of Interior Regulation B.E. 2547 is a central regulation that defines a redundant, inflexible accumulated fund structure with limited fiscal space. The issuance of the Ministry of Interior Regulations, B.E. 2547 (2004) and its Amendments Prior to B.E. 2561 (2018) and Ministry of Interior Regulations, B.E. 2561 (2018) the structure of the ratio of accumulated fund reserve to 15%, leading to an increase in fiscal space for public services. A statistical test of 30 large local administrative organizations found that the Ministry of Interior Regulation B.E. 2561 contributed to an increase in fiscal space. However, this increase does not guarantee that it is a major factor in promoting local administrative organizations to use more accumulated funds. Most accumulated funds are used for organizational management, which is the use of accumulated funds outside the accumulated fund structure. In addition, there may be other factors beyond the central regulations that are factors driving local administrative organizations to spend accumulated fund.