Fiscal Autonomy and Climate-Responsive Budgeting in Kurigram Paurashava: An Econometric and Policy Analysis (FY2020-FY2025)

Abstract

How does extreme dependency on intergovernmental grants shape the ability of local governments to manage climate risks? This study addresses this central question by evaluating the fiscal trajectory and climate-responsive budgeting of Kurigram Paurashava, an A-class municipality in Bangladesh, from FY2020 to FY2025. Utilizing an explanatory mixed-methods research design, the study integrates quantitative time-series regression and hierarchical cluster analysis of budget documents (Form-A) with qualitative insights from Key Informant Interviews (KIIs) with municipal officials. The findings reveal a profound “governance-finance-resilience trilemma”. While total expenditure grew at a CAGR of 7.46%, own-source revenue (OSR) mobilization remained stagnant at 1.28%, leading to an average intergovernmental dependency of 75.7%. Econometric modeling confirms a “flypaper effect,” where external grants displacement local revenue effort, while climate spending exhibits a pro-cyclical “boom-bust” pattern, spiking to 99.7% in grant-heavy years but receding sharply in their absence. These dynamics create a “maintenance trap,” where new resilient infrastructure risks decay without stable local funding for operations. The study concludes that building urban resilience requires a paradigm shift toward subsidiarity, recommending performance-based grants and digitized, GIS-based property tax mapping to foster genuine fiscal autonomy.