Legislative, Organisational, and Economic Factors of Debt Level of Municipalities in Slovenia

  • Tatjana Horvat University of Primorska, Faculty of Management
  • Marjanca Vidmar Municipality of Postojna
  • Gorazd Justinek New University, Faculty of Government and European Studies
  • Vito Bobek University of Applied Sciences FH Joanneum
Keywords: municipality, financing, ravenue, debt, total expenditures

Abstract

Municipalities are self-governing local governments established for the purpose of providing and improving social and economic life. However, the financial resources of the municipalities are limited, which is why they provide additional funds for the implementation of investments, among other things by taking out loans. The debt level of municipalities can be influenced by a variety of factors. In this paper, the authors limit themselves to a selection of factors, which have been divided into three areas - legislation, organisation and economy. As far as the legislative factor is concerned, we provide an insight into whether the total debt of municipalities has decreased with the adoption of the Constitutional Act amending Article 148 of the Constitution of the Republic of Slovenia (UZ148) and how this affects investment. With regard to the organisational factor, the authors try to find out, on the basis of correlation analysis, how the size of municipalities, divided into three classes according to the number of inhabitants, affects debt, current expenditure and total expenditure. With regard to the economic factor, the authors examine the impact of the municipalities' own revenues on their debt.

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Published
2020-10-29
Section
Article