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Financing local government in Slovenia

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  • Zan Oplotnik
  • Bostjan Brezovnik

Abstract

Financial resources are of essential importance for optimal local government functioning. Without a sufficient level of autonomy and resources, fiscal federalism is nothing more than an external appearance. With only one lower tier of government (municipalities), Slovenia is among the countries with a relatively low degree of decentralisation. The share of local finance amounts to around 5% of GDP (EU around 12%). Although the law allows creation of more lower tiers, no such units have been created yet. There are currently 193 municipalities, varying greatly in terms of population. Most of the local financial model discrepancies derive from: a) an inappropriate vertical tax structure and low level of local fiscal autonomy, b) an inadequate system of financial equalisation that is a strong disincentive to revenue mobilisation, c) absence of correlation between normative and actual expenditure/revenue, disregarding local characteristics, wealth and tax base, d) politically enforced decisions to found some 'fictitious' units, consequently reducing the role of local officials in political bargaining and lobbying.

Suggested Citation

  • Zan Oplotnik & Bostjan Brezovnik, 2004. "Financing local government in Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 16(4), pages 483-496.
    • Handle: RePEc:taf:pocoec:v:16:y:2004:i:4:p:483-496
    DOI: 10.1080/1463137042000309575
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    References listed on IDEAS

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    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    2. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    3. James M. Buchanan & Richard A. Musgrave, 1999. "Public Finance and Public Choice: Two Contrasting Visions of the State," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024624, April.
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    Cited by:

    1. Turk, Tomaž & Trkman, Peter, 2012. "Bass model estimates for broadband diffusion in European countries," Technological Forecasting and Social Change, Elsevier, vol. 79(1), pages 85-96.

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