Indebtedness of Local Government Authorities in the Czech Republic

conference paper

English

Purpose of the article. One of the first reforms after 1990 was the reform of public administration: that year municipalities were established as the basic element of local government, establishment of regions as higher ter-ritorial self-governing units took place after 2000. Municipalities and regions are public corporations, they have their own assets and manage them individually according to their annually approved budgets. The tax jurisdicti-on of municipalities and regions is not too vast. Indebtedness of municipalities and regions in the Czech Repub-lic has not been systematicaly analysed. Methodology. Given the nature of the researched area, only secondary data from official statistics can be used. Data on indebtedness of municipalities and regions are taken from the Ministry of Finance of the Czech Repub-lic, other data from statistical yearbooks of the Czech Statistical Office. These secondary data were processed using standard methods of descriptive statistics and correlation analysis. Scientific aim. The aim of the present paper is to summarize the development of indebtedness of municipalities and regions and also to research whether any dependence between the indebtedness and selected factors (population, number of municipalities, tranfers and established allowance organizations) - can be considered. Findings. The largest part of the total debt of municipalities consists of debts of the four largest cities (Prague, Brno, Ostrava and Plzeň). Of the regions, the Central Bohemian and Olomouc Regions have the highest debts in absolute terms, and the Karlovy Vary and Olomouc Regions when converted per capita. Of interest is the indica-tion of the connection between the debt of regions with their populations and the number of established allow-ance organisations: the values of the calculated correlation coefficients in these cases suggest a moderate direct linear dependence. Conclusion. We can conclude that development of indebtedness of municipalities and regions in the Czech Re-public is generally prudent and stable, however, some municipalities fulfil their obligations only with great diffi-culties.

indebtedness, local budgets, local government, municipalities, regions

LAJTKEPOVÁ, E.

23. 11. 2015

BUT, Faculty of Business and Management

Brno

978-80-214-5227-5

Perspectives of Business and Entrepreneurship Development

15

120

127

8

http://www.konference.fbm.vutbr.cz/ic/