Access to Debt Financing - Opportunities for Improvement of the Investment Capacity of Bulgarian Municipalities (for the period 2003-2015)

The activities regarding further improvement of the degree of fiscal decentralization in Bulgaria started in 2003. As a result of initiated reforms, Bulgarian municipalities gradually improved their abilities to generate revenue, obtained new responsibilities regarding expenditures, including these for construction, maintenance and expansion of local public infrastructure, and gradually improve their access to debt markets. This paper presents an examination of the development of debt financing of municipalities in Bulgaria. The aim is to reveal how decentralization opened up opportunities to finance municipal investments through debt, as well as to determine the character of debt financing as regards the increased municipal investment capacity. The period of research is 2003- 2015 because this period ensures more accurate results. The object of analysis is debt financing while the research topic is the changes in the municipal domestic debt in Bulgaria. The main information base includes data about the performance of municipal budgets, statistical data of the Bulgarian National Bank and of the National Statistical Institute, data concerning state debt, published on the official site of the Ministry of Finance, and data from a survey conducted among Bulgarian municipalities. The research methods used are: historical analysis; analysis and synthesis; induction and deduction; descriptive analysis, survey.