A Survey of Perspectives on Intergovernmental Relations: A Comparative Analysis of the Czech and Slovak Republics

Abstract

The results of a survey of local government officials from the Slovak and Czech Republics taken in December of 2005 are presented and analysed. Attitudes about and perspectives on intergovernmental fiscal relations in the two republics are probed. Differences and similarities in Czech and Slovak views are established regarding some of the perceptions of local autonomy and the sufficiency of available funds; whether or not public services are supplied by the appropriate levels of government; the potential benefits of adopting a serious rather than a nominal property tax; and the flexibility of local budget planning in Czech and Slovak cities and towns. MANY OBSERVERS HAVE VIEWED THE PROCESS of economic transition as consisting largely of the privatisation of state-owned enterprises and the establishment of market relations in the countries involved. However, the transition of the public sector in countries once managed by central planning regimes has also been a very important and difficult part of that historic development. The public sector under central planning was highly centralised so that the ruling party could maintain a tight monopoly over the country's decision-making powers. Thus, among other changes, economic transition has required a process of fiscal decentralisation to restore some autonomy to local government. Bryson and Cornia (2000) have outlined the development and difficulties of the initial, somewhat lukewarm attempts of the Slovak and Czech Republics to pursue fiscal decentralisation. In reviewing the efforts of other transition states, the OECD (

The Creation of Fiscal Space for the Property Tax: The Case of Central and Eastern Europe / Nekilnojamojo Turto Mokesčio Fiskalinės Erdvės Sukūrimas: Centrinės Ir Rytų Europos Atvejis

“…From a fiscal perspective countries such as estonia, latvia, lithuania, Hungary and Slovenia have low property tax revenues but have incurred significant costs in developing ad valorem systems, on the other hand Poland and Slovakia raise greater revenue from simple area based taxes. This dichotomy to some extent can be balanced when non-fiscal benefits are considered such as promoting land use allocation through market forces (Brzeski and frenzen, 1999).…”

“…as Mauer and Paugam (2000) found, this lack of buoyancy can create significant problems for area-based systems in that tax rates need to be adjusted annually to ensure revenue keeps pace with expenditure requirements. article 9(4) of the European Charter of Local Self-Government asserts that the resources available to local authorities should be of a "sufficiently diversified and buoyant nature to enable them to keep pace as far as practically possible with the real evolution of carrying out their tasks" In addition, area based taxes tend to over-tax commercial and industrial property whilst under-taxing residential property (Brzeski and Frenzen, 1999). It also fails on land use efficiency arguments as there is no value differentiation of different land uses and different locations (Paugam, 1999).…”