Read the following passage carefully:
"In evaluating the post-crisis performance of local expenditure frameworks, institutional economists frequently scrutinize the phenomenon of administrative sclerosis. Rather than denoting a literal medical degeneration of bodily tissue, the term in this fiscal context designates the progressive rigidity of bureaucratic organs under the accumulation of entrenched interest group demands and procedural inertia. As regulatory layers multiply over successive legislative cycles, local authorities become increasingly incapable of reallocating budgetary resources to emergent socio-economic priorities. Consequently, what appears on the surface as mere fiscal inefficiency is, at root, a structural decay of administrative adaptability, where procedural compliance completely eclipses substantive public policy outcomes."
Based on the passage, complete the statement below by identifying the exact contextual meaning of the term sclerosis.