Perspectives of Innovations, Economics and Business

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Volume 4
Issue 1
Online publication date 2010-02-10
Title Achievements, challenges and perspectives of financial decentralization in Bulgaria
Author Desislava Stoilova
Abstract The process of gradual administrative and political decentralization in Bulgaria started in 1991, but the real financial decentralization process started in the beginning of 2003 with the adoption of a comparatively clear expenditure assignment and introduction of a transparent and predictable intergovernmental transfer system. Step by step, local governments have been given full control over some of the own-source revenues (local fees, service prices and revenues from municipal asset management) and limited control over the local tax levy. 
his study is intended to examine and critically analyze the financial decentralization reform in Bulgaria, outlining the key achievements and basic weaknesses of expenditure assignment, local taxation and intergovernmental fiscal relations. The results indicate that local governments gradually became powerful component of the public sector. Although reducing financial resources of the public sector, worldwide economic and financial crisis can turn into an opportunity for some of the local governments in the country to gain financial independence and concentrate the efforts on strengthening local tax capacity.
Annual state budget acts of the Republic of Bulgaria for the fiscal years 1991-2009, State Official Journal, Sofia

Ivanov, S., 2004. Analysis and assessment of municipal budgets in 2004, NAMRB, Sofia

Local taxes and fees Act, State Official Journal No 117/1997, Sofia

Municipal budgets Act, State Official Journal No 33/1998, Sofia

Ministry of Finance of the Republic of Bulgaria, at, category: Budget/Statistics, accessed on November 19, 2009

National Association of the Municipalities in the Republic of Bulgaria (NAMRB), at, accessed on December 5, 2009

National Statistical Institute, at accessed on November 14, 2009

Thcavdarova, G., Ivanov, S., Savov, E., 2000. Local Government budgeting in Bulgaria, NAMRB, Sofia

Keywords Financial decentralization, local finance, intergovernmental fiscal relations.
Pages 32-36
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