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Fiscal savings of Czech municipalities: Precaution or inaction of their administration?

Author

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  • Sedmihradská Lucie

    (1 Prague University of Economics and Business, Prague, Czech Republic)

Abstract

Czech municipalities keep a substantial and growing volume of bank deposits. An analysis of determinants of unreserved deposits in 2021 suggests that municipalities are precautionary and accumulate fiscal reserves if they can and do so to stabilize their budget management. Signs of low activity of municipal administration such as low creation of new assets and low execution of the approved budget were not related to the volume of unreserved deposits in 2021. The change in the impact of the municipal debt on fiscal savings from strongly negative to weakly positive between 2016 and 2021 calls for more research on the impact of the introduction of new local debt regulation.

Suggested Citation

  • Sedmihradská Lucie, 2023. "Fiscal savings of Czech municipalities: Precaution or inaction of their administration?," Review of Economic Perspectives, Sciendo, vol. 23(3), pages 203-216, September.
    • Handle: RePEc:vrs:reoecp:v:23:y:2023:i:3:p:203-216:n:2
    DOI: 10.2478/revecp-2023-0007
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    References listed on IDEAS

    as
    1. Muhammad Nurul Hoque & Md. Borhan Uddin Bhuiyan & Takumi Nomura & Tony van Zijl, 2022. "Determinants of cash holdings—evidence from New Zealand local councils," Public Money & Management, Taylor & Francis Journals, vol. 42(8), pages 605-615, November.
    2. Min Su & W. Bartley Hildreth, 2018. "Does Financial Slack Reduce Municipal Short†Term Borrowing?," Public Budgeting & Finance, Wiley Blackwell, vol. 38(1), pages 95-113, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    bank deposits; Czech Republic; fiscal reserves; local government;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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