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How does the financial health of urban, suburban, and rural semi-peripheral and peripheral municipalities differ?

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  • Jan KubeÅ¡
  • Irena Szarowská
  • Jan Pokorný

Abstract

The aim of the article is to identify and explain differences in the municipal financial health with different population size, settlement-regional role, peripherality, and other place-based characteristics. The study area includes almost 130 municipalities in the Karlovy Vary Region (Czechia). Ten indicators of the municipal financial health analyze operational and fiscal stability, expenditure and investment structure, and debt burden. The results show that medium-sized and suburban municipalities have the most favorable fiscal profile. In contrast, the smallest municipalities show fiscal fragility associated with limited internal resources, high fixed costs per capita and limited investment capacity, while towns face fiscal pressure associated with responsibility for services for both their residents and commuters from the surrounding area. Peripheral municipalities have low debt, but this reflects their limited development capacity rather than fiscal strength. The findings show that the municipal financial health is influenced not only by population size, but also by their settlement-regional role, peripherality, and other local characteristics. The article includes several measures to improve the financial health of the studied types of municipalities.

Suggested Citation

  • Jan KubeÅ¡ & Irena Szarowská & Jan Pokorný, 2026. "How does the financial health of urban, suburban, and rural semi-peripheral and peripheral municipalities differ?," Local Economy, London South Bank University, vol. 40(4), pages 499-516, August.
    • Handle: RePEc:sae:loceco:v:40:y:2026:i:4:p:499-516
    DOI: 10.1177/02690942261456698
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