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The fourth-level budget is a vital instrument for rural development; however, Kazakhstan’s current legal framework is insufficient for rural akims to perform their functions effectively. The absence of a specialized regulatory framework governing local self-government (LSG) budget management remains a significant institutional challenge. This article examines the regulatory and institutional sustainability of the fourth-level budget, focusing on the Turkestan Region. As the region with the highest number of rural settlements and the largest rural population share in Kazakhstan, it represents a strategically vital case for fiscal management research. The study aims to evaluate the effectiveness of the institutional mechanism using correlation analysis of executed budget data from 2019–2024. The findings reveal an “institutional dependency trap”: a near-perfect correlation coefficient between total revenues and received transfers ($r = 0.99$) confirms that the management mechanism remains estimate-based and passive. In this model, rural akimats function merely as transit fund distributors. Conversely, a strong significant correlation between tax revenues and asset management ($r = 0.89$) identifies a crucial hidden driver for fiscal autonomy and self-development. To modernize this mechanism, the authors propose: resolving “institutional dualism” by redefining the Akim as the “CEO of the local community,” accountable primarily to the Kenes (Local Council) rather than the executive vertical; implementing a “Retention Bonus” model, allowing districts to retain 100% of surplus tax revenues without a subsequent reduction in transfers; enhancing public participation via mandatory e-voting on the “Open Budgets” portal for projects exceeding specific value thresholds. The practical significance lies in transforming rural administrations into autonomous, robust institutions of local self-government.