Local Government Debt and Fiscal Autonomy
Local Government Debt and Fiscal Autonomy

Author(s): Sorina Koti
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Municipality debt; Loans; Fiscal autonomy; Revenue; Investments
Summary/Abstract: The purpose of the study is to analyse and discuss the local government debt and fiscal autonomy. It is very important to understand the composition of the municipal budget, its own income and government transfers. The study will analyse the revenues and expenses of municipalities (operational and capital) as well as the ways of financing investments. Literature and statistical data show the financial inability of the local government to cover expenses and to invest in public works. Some municipalities have received loans from Second Level Banks for capital investments. Furthermore, the study will analyse the use of debt, its effects and its efficiency. In Albania, the fiscal autonomy of the local government is still a problem, since the municipalities find it impossible to generate income and meet the needs for investments and expenses, bringing a strong dependence on the central government. Also, the study will discuss the ways how municipalities can increase their level of income, their good management and the increase of financial autonomy.

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