An Analysis of Equalizing Capacity of State Transfers for Local Government Activities in Bulgaria

Presiana Nenkova
Additional contact information
Presiana Nenkova: University of National and World Economy, Sofia, Bulgaria

Economic Alternatives, 2019, issue 4, 627-640

Abstract: The aim of this paper is to examine the fiscal disparities among local governments in Bulgaria and to show the capabilities of the existing intergovernmental transfer system to reduce them. Fiscal equalization policy in Bulgaria is performed through a general equalization transfer for local activities the distribution of which is based on local government tax revenue, as well as on service delivery costs. We measured the extent of equalization in three years – 2007, 2011 and 2017, during which the equalization transfer formula underwent considerable changes. For 365 municipalities we found out that, although the applied equalization mechanisms reduced the inequality in municipal own-source revenuå the remaining fiscal disparities among local governments were still considerable. Our research also suggests that disparity-reducing strength of the general equalization transfer remained almost unchanged during the period under review with its equalizing potential hampered to a great extent by the inclusion of additional compensatory elements in the distribution formula.

Keywords: Bulgaria; decentralization; fiscal disparities; transfers; equalization; local governments (search for similar items in EconPapers)
JEL-codes: H71 H73 H77 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.unwe.bg/doi/eajournal/2019.4/EA.2019.4.11.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nwe:eajour:y:2019:i:4:p:627-640

Access Statistics for this article

More articles in Economic Alternatives from University of National and World Economy, Sofia, Bulgaria Contact information at EDIRC.
Bibliographic data for series maintained by Vanya Lazarova ().