System of Czech local government financing as a framework for local development : 12 years of trial and error approach

Abstract

The paper deals with the problems of setting op a system of local government financing in the Czech Republic. It starts with discussion of reasons for a decade of unsuccessful efforts in reforming local finances, then development of the system of local finances is elaborated, but core of the paper is devoted to analysis of current system of municipal financing. The article concludes that the new model of financing suffers not only from problems of a technical nature (eg. the issue of coefficients used for distribution of shared taxes among municipalities of different sizes) but of much more conceptual problems. Finally, consequences of existing system of financing for local development are provided