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Subject: Revenue determinants
Subject: local finances
Subject: fiscal decentralisation
Subject: North Macedonia


Year: 2022


Type: Article



Title: Municipal Revenue Determinants in the South-Eastern European Economy: Evidence from North Macedonia


Author: Trenovski, Borce
Author: Merdzan, Gunter
Author: Peovski, Filip



Abstract: Sustainability of municipal finance implies steady revenue generation. Pinpointing their determinants creates the necessary background in their management and policy creation. Great municipal dependence on central government finance remains a serious challenge in the process of fiscal decentralisation. So far, studies have been focusing on the expenditure side, while revenues were treated mostly marginally. A random-effects Generalized Least Squares (GLS) panel regression for the period of 2015–2019 is estimated for targeting revenue determinants of municipalities in North Macedonia. Own and total tax revenues are modelled separately through the impact of capital expenditures, salary expenditures, active transparency index, municipality type, and local government’s ideology. The general results indicate that capital expenditure, municipal transparency, and the level of development are significant determinants of municipal revenues in both estimated models. Using such knowledge on municipal revenue reactions can help governments formulate policies that provide sustainable and effective fiscal decentralisation, lowering the pressure on central governments in developing economies.


Publisher: Centre for European Regional and Local Studies EUROREG (University of Warsaw) and the Polish section of the Regional Studies Association.


Relation: Studia Regionalne i Lokalne, Nr 1(87)/2022



Identifier: oai:repository.ukim.mk:20.500.12188/25748
Identifier: 1509-4995
Identifier: http://hdl.handle.net/20.500.12188/25748
Identifier: 10.7366/1509499518702
Identifier: 2719-8049



TitleDateViews
Municipal Revenue Determinants in the South-Eastern European Economy: Evidence from North Macedonia202226