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Determinanty zadĺženosti miestnych samospráv Slovenskej republiky
[Determinants of the Municipal Indebtedness in the Slovakia]

Author

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  • Lenka Maličká

Abstract

Municipalities in the Slovakia as part of public sector have to finance their needs in accord of legally set municipal budgeting principles. The general basic rule mentions that current needs have to be financed from current budget. Capital or investment expenditure can be financed by returnable resources. Using returnable finance resources induces the indebtedness. Although the state level of government is not responsible for the indebtedness incurred on municipal level, usually limits the municipal indebtedness by law and monitors the total municipal debt and debt service. The paper deals with municipal indebtedness in the SR, where total municipal debt is involved to econometric investigation in aim to identify its determinants. Estimated GMM dynamic panel model includes time effects and reveals significant positive influence of capital revenues, debt service and lagged debt. Significant is negative impact of unemployment rate and financial autonomy. Time effects are significant in period of 2003-2004 (extensive indebtedness of certain cities), 2008-2010 (effects of public sector reform and previous economic expansion) 2011(delayed impact of financial crisis) and 2012-2014 (economic recovery).

Suggested Citation

  • Lenka Maličká, 2017. "Determinanty zadĺženosti miestnych samospráv Slovenskej republiky [Determinants of the Municipal Indebtedness in the Slovakia]," Politická ekonomie, Prague University of Economics and Business, vol. 2017(3), pages 301-315.
    • Handle: RePEc:prg:jnlpol:v:2017:y:2017:i:3:id:1145:p:301-315
    DOI: 10.18267/j.polek.1145
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    More about this item

    Keywords

    municipal indebtedness; municipal debt; debt service; municipal capital expenditure; dynamic panel model;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

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