Some countries have certain rules which make it harder or more expensive to get a local domain than a global one. For local search queries sites which match the local domain extension or are hosted on a machine in that country may get a boost in relevancy over global domains. (ie: .uk may rank well in UK, .de may rank well in Germany)
Google can use the increased price of local hosting and/or the rules associated with gaining a local domain extension to assume that locally hosted or locally registered domains may have a greater local relevancy.
Likely due to less spamming incentive, a smaller content base, and a lesser understanding of local language many of the filters that are applied to the global search results may not be applied to some local results.
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