H72 - State and Local Budget and ExpendituresReturn

This paper contributes to the literature on fiscal decentralization by presenting a formal model of the interaction between the central and local governments (CG and LGs, respectively) where LGs may differ in their degree of political alignment with CG. The non-cooperative optimal behaviour of the agents reveals that optimal tax increases with the extent of fiscal decentralization (FD), political unison and spillovers across localities, while LGs' optimal tax collection effort is negatively associated with all of these parameters. The first novel finding of our study is that both welfare peaks and income distribution are more equitable at a lower level of FD in the case of spillovers than in the case of no spillovers, which supports the decentralization theorem. The second novel finding is that both the amount of redistributable income and central government utility increase with the degree of political unison.

The article deals with the issue of the length of procedure in public procurement. Our analysis focuses on construction contracts in 2010-2015. We apply hierarchical linear regressions to these data to identify factors that affect the length of procedure. According to our results, the duration of a public contract does not affect the standard contract price. The nature of the contracting authority, the expected value, the openness of the procurement procedure, and the method of evaluation have a statistically significant impact on the length of the contract. As for other factors regarding the length of awarding time, the use of the subcontractor, the division of a contract into parts, and a review by the Office for the Protection of Competition due extend the time required. By contrast, contracting time can be reduced by the use of outsourcing. In the end of the article, we have put forward recommendations for economic policy and further research.

The article deals with the econometric analysis on the influence of selected characteristics of public contracts with respect to the decision making of bidders on public contracts regarding submissions to initiate proceedings to review the actions of the contracting authority at the Office for Protection of Competition. Logistic regression was applied to data on public procurement between the years 2007 and 2014, which was combined with the administrative decisions of the Office for the Protection of Competition, in order to identify the factors that affect the likelihood that the competitors will be protected against the conduct of the contracting authority by the Office for the Protection of Competition. The article also takes into account the possible obstructive behaviour of candidates, particularly those submissions which were subsequently withdrawn or submissions whose deposits were not paid.

The paper examines the political business cycle at the municipal level in the Czech Republic using data for 205 municipalities in the period 2001-2007. We introduce empirical models based on fixed-effects panel data regression testing the capital and current expenditure manipulation prior to elections. The results indicate significant increase in capital expenditures and significant decrease in current expenditures prior to elections. At the same time the manipulation with capital expenditures does not increase the probability of re-election for the incumbents in the Czech municipalities.

This paper is based on the new institutional economic approach, which focuses on analysis between services features (asset specificity, outcome measurability) and their eligibility to contract out. This issue, which de facto constitutes one of the subsets of the ""make or buy decision"" issue, is also analysed by the so-called Brown-Potoski model. It analyses the relations between selected features of a demanded service and its suitability or unsuitability for outsourcing, whilst making use of information about transaction costs economy. Using data from 100 Czech municipalities and 100 Slovak municipalities, the viability of the Brown-Potoski model is tested. The results of the research show that a connection was identified between the measurability of the required service and its suitability for external provision, but the relationship between the specificity of investments and the suitability for external provision was not. The reason is probably the previous financial demands of the initial investment, which is, above all in the case of small municipalities, beyond their budgetary means.

Efficiency, economy and effectiveness: outcomes and impacts of public expenditures are main issue especially from mid eighties, when massive changes in the public sector started, influencing both allocative and X-efficiency of public expenditures. Public expenditure programmes are implemented on many levels, from international to municipal, and in many different forms. In our paper, we decided to perform the analysis on the level of self-governing regions in the Czech Republic. We focus on the following dimensions of expenditure analysis: the scope and scale of allocative and regulatory public expenditure programmes in the region (from EU level programmes to regional); existing approaches used to analyse effectiveness of selected public expenditure programmes; impacts of public expenditure programmes on selected recipients (including capacity of recipients to apply for public resources - capacity to prepare projects to compete for public funds).