On the (Financial) Autonomy of Local Municipalities

Abstract

Local municipalities are part of the state structure and the unified national public administration, thus their existence is an unquestionable element of state organism. The regulation of local municipalities, however, cannot remain unchanged in a dynamically developing environment, therefore, it can be stated that the legal regulation of local municipalities’ organisation and operation is in permanent change. The change of the economic environment makes it necessary to pay attention to the scope of action that local municipalities have and its potential supervision or modification. We can say that the legal environment affecting local municipalities’ financial scope for action has gone through fundamental changes in recent years. The most characteristic features of these changes were the institutionalisation of the task financing system and the state limitation of local municipalities’ opportunities to take out loans. The current study discusses this topic, in which it also includes some theoretical and practical issues of local municipality management based on the effective regulation.