Politicians’ Remuneration and Budgetary Behaviour in Czech Municipalities
Politicians’ Remuneration and Budgetary Behaviour in Czech Municipalities

Summary/Abstract: This paper aims to bridge a gap in public finance research by investigating the impact of remuneration increases for local politicians on various budgetary indicators in Czech municipalities using the regression discontinuity design method. Building on prior studies from Italy and the Netherlands, this research examines how remuneration influences budgetary behaviour. Focusing on municipalities with populations ranging from 5 to 20 thousand inhabitants, divided by a threshold of 10 thousand, where remuneration increases occur automatically, the analysis reveals significant effects on budget allocations. Particularly notable are increases in current and total expenditures, alongside a decrease in investment expenditures. The study also explores resource allocation across different sectors, highlighting the influence of remuneration on areas such as culture and public administration.

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