Financing Municipal Utility Activities and Local Public Enterprises by Way of Illustrating the Situation in the Republic of Macedonia

Pendovska, Vesna; Veljanovska, Aleksandra Maksimovska

doi:10.4335/78

Cited by 4 publications

(3 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Findings of regional studies that examined the operation and financing of (local) SOEs in the region and the former Yugoslavia do not differ greatly from the conclusions reached by IFIs. Papers by Bajo (2007) and Pendovska and Maksimovska-Veljanovski (2009), highlight the poor efficiency of local SOEs, political influence of local officials on the appointment of their managers, social pricing regulated at the level of general government (whereby these prices do not cover the actual cost incurred in providing services), and the limitations inherent in local SOEs' financial statements and operating reports, and, consequently, their opacity.…”

Section: Review Of Literaturementioning

confidence: 99%

Financial Borrowing by Local State-Owned Enterprises in Serbia: An Assessment of National Practice

Živanović

Đulić

Jolović

2020

Journal of Central Banking Theory and Practice

View full text Add to dashboard Cite

Serbian local state-owned enterprises (SOEs) owed in excess of EUR 220mn in late 2015, with estimates reaching a much higher figure. According to the national Fiscal Council, underinvestment by local governments amounted to some EUR 250mn annually. This paper looks at insufficient commercial borrowing by local SOEs trying to identify the causes of this financing gap by looking at two aspects: on one hand, we look at quantitative and qualitative inputs provided by local SOEs for credit analysis that may cause significant information asymmetries, and, on the other, we consider the possibility that bank credit analyses, even if done properly, could reveal that these firms are unable to borrow from banks.The research has revealed that the length and efficiency of the bank credit approval process is dictated by: the need to properly organise qualitative and quantitative SOE information and ensure that it reflects the actual state of affairs; the poor quality of financial statements of SOEs and their pro forma annual business planning and reporting; a common lack of appropriate revaluation of future income; and an existent drawback related to ownership over fixed assets that are considered as a public property in Serbia (rather than as a property of the SOE that uses them).On the other hand, banks do not distinguish sufficiently between private firms and SOEs. This does not allow banks to account for issues specific to SOEs such as the spillover of fiscal risk, corporate governance, relationships between the owner and its SOEs, economic and social objectives, and the like. The frequent inability of local SOEs to provide mortgages as collateral, coupled with the restriction on guarantees from local governments, nearly completely preclude lending for large-scale and long-term investment.We conclude that local SOEs have a limited access to finance due to information asymmetries caused by unsuitable qualitative and quantitative inputs made by SOEs in the credit analysis process. Nevertheless, appropriate credit analyses reveal that these companies can be able to borrow commercially, especially in lower amounts and at shorter maturities which could mitigate underinvestment by local SOEs.

show abstract

Section: Review Of Literaturementioning

confidence: 99%

Financial Borrowing by Local State-Owned Enterprises in Serbia: An Assessment of National Practice

Živanović

Đulić

Jolović

2020

Journal of Central Banking Theory and Practice

View full text Add to dashboard Cite

show abstract

“…For example, the preschool and elementary school had been decentralized and revenues were assigned to all municipal governments. Communal activities have been decentralized which led to higher quality in communal local services (Maksimovska and Pendovska 2009) The legal benefits were recognized by strengthening the rule of law, at least as a respect of constitutional provisions and making use of ratified international agreements. One of the most important international local governance acts is the European Chapter of Local-Self Government that requires many decentralization tools and sets new legal rules in decentralization laws in the countries that had ratified it (especially in the field of fiscal decentralization as stipulated in Articles 8 and 9).…”

Section: The Benefits Of Fiscal Decentralization In the See Regionmentioning

confidence: 99%

The Future of Fiscal Decentralization in Southeast Europe: What is on the Horizon?

Maksimovska-Veljanovski¹,

Stojkov²

2013

LEX

View full text Add to dashboard Cite

Although the current post-decentralization decade offers much more tranquility for practitioners of the fiscal decentralization, decentralization scholars should not fall asleep. Some of the awakening questions are: where is the decentralizing limit? What is the likelihood of fiscal decentralization reconstructing the intergovernmental relations in a way that leads to federalization of unitary countries in Southeast Europe? Even though we focus on the Macedonian experience, the main findings largely hold for the entire region. The study aims to provide new, interdisciplinary understanding of the implications and perspectives of decentralization, overcoming the limitations when adopting a purely legal, economic or political perspective.

show abstract

“…The broad range of competencies required for delivering these services and the growing budget restrictions facing local governments pose an important challenge to local decision-makers everywhere: 'how to curb costs while meeting public-service obligations?' Utility services are particularly problematic since they involve large investment outlays in specialized infrastructure and, quite often, local governments struggle with the economic sustainability of the systems (Pendovska & Veljanovski, 2009). Furthermore, pressures towards resource conservation and environmental awareness represent new challenges to utility managers around the globe.…”

Section: Introductionmentioning

confidence: 99%

Managing Public Utilities: Lessons from Florida

Cruz¹,

Berg²,

Marques³

2013

LEX

View full text Add to dashboard Cite

This paper considers the institutional and regulatory framework of local infrastructure services in Florida. Furthermore, it examines how decision-makers perceive the governance structures of publicly-owned utilities in this state. After reviewing the theory, the study describes the current system in terms of rate setting, investments, consumer protection and quality of service. A state-wide survey was developed to identify potential sources of tension between managers and politicians. The responses were supplemented by interviews with managers, enabling the authors to identify good practices of local governance, including the de-politicization of the decision-making and the managerial attention to sustainable approaches to funding infrastructure.

show abstract

Financing Municipal Utility Activities and Local Public Enterprises by Way of Illustrating the Situation in the Republic of Macedonia

Cited by 4 publications

References 0 publications

Financial Borrowing by Local State-Owned Enterprises in Serbia: An Assessment of National Practice

Financial Borrowing by Local State-Owned Enterprises in Serbia: An Assessment of National Practice

The Future of Fiscal Decentralization in Southeast Europe: What is on the Horizon?

Managing Public Utilities: Lessons from Florida

Contact Info

Product

Resources

About