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Achievements, Challenges And Perspectives Of Financial Decentralization In Bulgaria

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  • DESISLAVA STOILOVA

    (Faculty of Economics Southwest University “Neofit Rilski”, Bulgaria)

Abstract

The process of gradual administrative and political decentralization in Bulgaria started in 1991, but the real financial decentralization process started in the beginning of 2003 with the adoption of a comparatively clear expenditure assignment and introduction of a transparent and predictable intergovernmental transfer system. Step by step, local governments have been given full control over some of the own-source revenues (local fees, service prices and revenues from municipal asset management) and limited control over the local tax levy. This study is intended to examine and critically analyze the financial decentralization reform in Bulgaria, outlining the key achievements and basic weaknesses of expenditure assignment, local taxation and intergovernmental fiscal relations. The results indicate that local governments gradually became powerful component of the public sector. Although reducing financial resources of the public sector, worldwide economic and financial crisis can turn into an opportunity for some of the local governments in the country to gain financial independence and concentrate the efforts on strengthening local tax capacity.

Suggested Citation

  • Desislava Stoilova, 2010. "Achievements, Challenges And Perspectives Of Financial Decentralization In Bulgaria," Perspectives of Innovation in Economics and Business (PIEB), Prague Development Center, vol. 4(1), pages 32-36, February.
  • Handle: RePEc:pdc:jrpieb:v:4:y:2010:i:1:p:32-36
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    More about this item

    Keywords

    Financial decentralization; local finance; intergovernmental fiscal relations.;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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