Municipalne obveznice kao instrument za unapređenje lokalnog ekonomskog razvoja u Republici Srbiji
Municipal Bonds As New Instrument For Enhancing Local Economic Development In Republic Of Serbia

Summary/Abstract: In 2007 local economic development became a new function of Serbian local governments. According to Article 20 (paragraph 1, item 9) of the Local Government Act ("Official Gazette of RS", no. 129/2007) which defines the self-governed competences of Serbian decentralized units, local self-governments, in accordance with the Constitution and the special Acts: "adopt programs and projects of local economic development and ensure an improvement of the overall framework for economic activity in local government unit." This Act shifted paradigm of local government from a socially-oriented concept of local government to the economically oriented local government whose task is to promote local economic development and create a favourable and enabling environment for investments. One of the local economic development instruments, fully neglected until recently, is municipal bonds. The authors examine recent changes in the legal regime of municipal bonds and practical possibility for the use of this instrument in Serbia. The paper gives a contemporary analysis of the notion and characteristics of municipal bonds, and also of a process of issuing, legal framework and economic feasibility of their use in the Republic of Serbia. The authors examine the problem of rating this type of debt securities and, based on the research, identify what would be the optimum yield of this type of securities in the Serbian market.

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