The Covid-19 pandemic and local government finance : Czechia and Slovakia

Purpose: The current Covid-19 crisis research focuses especially on epidemiologic and macro-level socioeconomic aspects. It only marginally covers impacts on local budgets. Our intention is to enrich the existing limited debate on this dimension. Design/methodology/approach: This paper uses a qualitative research approach and is based on secondary research and information available in restrictive regulations of national governments, data published by governmental bodies, international statistics and media articles published before 30 June 2020. The authors also conducted six non-structured online interviews with the leading question: “How do you see the current and future impacts of the pandemic on local public finance?” Findings: Available information on Czechia and Slovakia indicates that the level of municipal fiscal imbalance as the result of the Covid-19 crisis is not proportional to the situation on the central level, and municipal financial resources are not commensurate with their responsibilities as outlined by the constitution and the law. Because the reaction of the central government in both countries to this situation has been inadequate, municipalities will face problems with service delivery in some areas, especially in culture and sport. Originality/value: The authors enrich the growing debate about the current Covid-19 crisis and its consequences and focus on local government finance in two selected countries from Central and Eastern Europe.