Revenues of Municipalities as a Tool of Local Self-Government Development (Comparative Study)

Marta Urbaníková,Viera Papcunová,Jarmila Hudáková,Michaela Štubňová

doi:10.3390/admsci10040101

Marta Urbaníková, Viera Papcunová

Open Access

https://doi.org/10.3390/admsci10040101

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Abstract

A municipality’s budget is a tool that significantly affects the long-term economic potential of the area. In addition, it is an important tool for the management of the municipality, in relation to the effective provision of public services for inhabitants. To ensure them, it uses the revenues that the local self-government receives from various sources. The aim of the paper is to characterize and to compare the mechanism of creating revenues of the local self-government in the Slovak and Czech Republic and, at the same time, to analyze the relationships between individual groups of local revenues in the time period 2009–2018. We analyzed the basic groups of municipal revenues: total revenues, current revenues, and capital revenues. For the analysis, we used selected mathematical–statistical methods (trend lines, correlation coefficient). Although both countries were part of one country, both have a dual model of public administration and have undergone fiscal decentralization; the structure and sources of local self-government revenues are different. However, a common attribute is the dependence of local self-government on state revenues. Tax revenues are the most important part of current budget revenues. Despite fiscal decentralization, local budget revenues are dependent on the state. In the Slovak Republic, share taxes from the state represent 74% of the total tax revenues of municipalities, and in the Czech Republic, 85% of the total tax revenues of municipalities.

Highlights

Local self-government refers to specific institutions or entities created by national constitutions (Brazil, Denmark, France, India, Italy, Japan, Sweden), state constitutions (Australia, USA), ordinary legislation of the higher level of central government (New Zealand, United Kingdom, most countries), provincial or state legislation (Canada, Pakistan) or under executive power (China) to provide a range of specific services in a relatively small geographically defined area
In detail, individual groups of revenues within the current budget as well as within the tax revenues of municipalities. This is due to the fact that current revenues, but especially tax revenues of municipalities, present important factors in the development of municipalities
The same model of public administration is used in both countries, the mechanism of financing local self-government shows certain specifics

Summary

Introduction

Local self-government refers to specific institutions or entities created by national constitutions (Brazil, Denmark, France, India, Italy, Japan, Sweden), state constitutions (Australia, USA), ordinary legislation of the higher level of central government (New Zealand, United Kingdom, most countries), provincial or state legislation (Canada, Pakistan) or under executive power (China) to provide a range of specific services in a relatively small geographically defined area. Local governance is a broader concept and is defined as the formulation and implementation of collective action at the local level. It includes the direct and indirect roles of formal local self-government institutions and government hierarchies, as well as the roles of informal norms, networks, community organizations, and associations of neighboring countries in carrying out collective action by defining a inhabitant–inhabitant framework and inhabitant–state interactions, collective decision-making, and provision of local public services (Boadway and Shah 2009). European Union (EU) countries are far from having a same territorial organizational structure, so the decision on a system of local action, including levels of governance, is left to the national level. Fandel et al (2019) states that, for example, in the Slovak Republic

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