As I've said before, I can only assume that it is the click-through ratio/user response.
For example, if a user searches for "Isaac Newton" on google.com.au, then there will be no Australian results in the top 10 in "the web" results, as this is more an information, country non-specific search.
However, if a user searches for say "widget insurance" then I can bet that all of the results in the top 10 will be Australian, as the user is likely to be wanting information or even purchase widget insurance, and as we all know, widget insurance differs from country to country.
It didn't always used to be like this, as a couple of years ago, US .com's and .net's dominated the SERPs for regional "the web" results. Over time, more and more local sites came into "the web" results and now for albeit more encyclopedic searches, it is not uncommon to see between 8 and 10 local sites on the first page of "the web" results.
Other theories include:
- links from local sites
- outbound links to local sites
- number of "citations" or mentions on local sites (not necessarily links)
- Google local business center listing