Changing local finances in the Czech Republic — half way over?

Far-reaching changes launched in 1989, aimed mainly at establishing a democratic society and market economy have clearly brought many positive results. However, there is also a negative side to these progressive changes both in economic and social spheres. There are many difficult tasks ahead such as the reestablishment of a democratic and economically effective local government which will be able to fulfil contemporary needs and requirements. The aim of this report is not to describe all the changes occurring in local government or to review different opinions about what should be done, but rather to concentrate on one of the most important issues facing this body of government, that of financial reform. Special attention will be given to the economic performance of municipalities with regard to their population size. It will be argued that data from local budgets can reveal important features about the performance of local and regional economies which cannot be obtained in any other way.