Bulgarian Municipalities’ Capacity to Invest and Factors Affecting Local Government Capital Spending for the Period 2003-2017

Presiana Nenkova; Desislava Kalcheva

doi:10.37075/YB.2018.1.08

Authors

Assoc. Prof. Dr Presiana Nenkova Department of Finance, Faculty of Finance and Accounting, UNWE Author
Dr Desislava Kalcheva Bulgarian Credit Rating Agency Author

DOI:

https://doi.org/10.37075/YB.2018.1.08

Keywords:

Municipal investment, Direct investment capacity, Local governments, Fiscal decentralization, Local revenue, Local expenditure

H77, O18, R51

Abstract

Since 2003, the level of local government investment in Bulgaria has increased substantially. On average for the period 2003-2017 local public sector accounted for about one-thirds of total public sector capital spending. However, the contribution of Bulgarian municipalities to the public sector investment shows significant differences as compared to the prevailing EU pattern. It was only in the last few years that the level of local public investment in Bulgaria started approaching the EU average, primarily as a result of resources coming from European funds. The main objective of this article is to overview municipal investment activity during the years 2003 through 2017 and to assess direct investment capacity of local governments in Bulgaria. In addition, key factors affecting the levels and dynamics of local government capital spending are also being examined.

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