Publication: Rethinking Municipal Finance: Bulgaria Subnational Public Finance Review
Loading...
Published
2025-08-12
ISSN
Date
2025-08-12
Author(s)
Editor(s)
Abstract
The report provides a comprehensive analysis of Bulgaria’s local public finances, focusing on key challenges faced by municipalities and potential reforms. The report’s goal is to provide a better understanding of local fiscal capacity, the system of intergovernmental fiscal transfers, and municipal spending and discusses possible policy options that can help strengthen municipal finances. More specifically, it seeks answers to the following key questions: How can municipalities boost their own-source revenue—with a focus on property taxes - to generate more resources for better and more equitable local service delivery? Is there scope to optimize the intergovernmental fiscal transfer system, particularly equalization transfers, to enhance efficiency and equity based on global best practices? How can local spending efficiency and effectiveness be improved to achieve value for money in municipal services?
Link to Data Set
Citation
“World Bank. 2025. Rethinking Municipal Finance: Bulgaria Subnational Public Finance Review. © World Bank. http://hdl.handle.net/10986/43574 License: CC BY-NC 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication Lithuania : Issues in Municipal Finance(Washington, DC, 2002-05-16)Since the establishment of Lithuania's independence, the country achieved substantial progress in transforming its local governments into independent units of Government: structural reforms to prod intergovernmental relations were made in 1994 and 1997, and will continue in 2002. Nevertheless, several issues remain, requiring particular attention from the Government. First, revenue and expenditure assignment between levels of government, and the degree of central regulation over local finance, needs to be reviewed. Local governments face fiscal constraints, for revenues are centrally collected, and distributed at centrally determined rates. And, although local governments have nominal authority over their expenditures, major items (salaries and welfare payments) are subject to Government control, resulting in local governments being faced with running arrears, or borrowing from the Government or private lenders. Although high per capita jurisdictions are required to share revenues with poorer counterparts, it is not clear that distribution mechanisms actually allocate revenues as needed. Upcoming reforms are likely to change this, but a greater change in the revenue distribution criteria, would be by funding delegated functions, but distributing according to sector-specific indicators of need, as well as budgeting financial availability. Second, financing capital investment may be improved by a greater fiscal autonomy to local governments, and mostly, by improving the quality of financial information, with reforms that include the separation of current, and capital accounts, and the adoption of accrual accounting for expenditures.Publication Brazil - Financing Municipal Investment : Issues and Options(Washington, DC, 2001-04-20)This report explores alternative ways to finance municipal capital expenditures while maintaining macroeconomic stability and fiscal discipline. It tries to estimate the financing effort that municipalities will need to make in order to meet the demand for infrastructure services over the next five to 10 years, taking into account the municipalities' expected resources from local taxes, user charges, and intergovernmental transfers. The report is organized into six chapters. The introduction describes the overall problem, main issues, methodology, and analytical framework. Chapter 2 explains the context under which municipalities operate, and it identifies the main financial trends in the sector. Chapter 3 discusses how to increase municipal current savings to enable municipal governments to finance investment and leverage borrowing. Chapter 4 focuses how to ensure that the existing municipal credit systems operate efficiently, that municipalities with "good" projects find adequate long-term financing, and that credit is allocated more by market rules and less by political factors. Chapters 5 and 6 discusses how to support the involvement of the private sector in the financing of municipal infrastructure and in helping the transition toward less regulated credit systems.Publication Mozambique - Municipal Development in Mozambique : Lessons from the First Decade - Full report(World Bank, 2009-05-01)Municipalities in Mozambique were established by law in 1997 and elected in 1998 for the first time, only a few years after the peace agreement. Most inherited archaic and dysfunctional remnants of colonial and central government systems and infrastructure, and as such limited progress was achieved in transforming them into functioning local governments during the first mandate (1998-2002). During the second mandate (2003-2008), however, significant improvements were seen as municipalities began to grasp the nettle of local governance and some service delivery challenges. By the end of their first decade most municipalities have reorganized themselves to some extent and a number have undertaken initiatives that are beginning to bear fruit. There remains a long way to go, however, before municipalities will be robust enough to deliver quality local services to meet growing demand. There is a danger that the pace of municipal technical and financial capacity development will be overtaken by the growing municipal population and by transfers of additional mandates. Municipalities, central government, and the Association of Municipalities (ANAMM) need to support municipalities to perform their potentially significant role in improving living conditions, stimulating growth and cementing meaningful democracy in Mozambique. This study provides the first integrated assessment of the challenges of local development and service delivery through a municipal lens. It diagnoses the underlying systemic constraints facing municipalities, discusses some of the specific service delivery challenges of the municipalities, and it sets out recommendations for both central and municipal governments to tackle some of these constraints within an integrated and systemic framework.Publication City Finances of Ulaanbaatar, Mongolia(Washington, DC, 2013)Ulaanbaatar's (UB) population has swollen from half a million in 2001 to approximately 1.2 million in 2011, accounting for over 40 percent of the country's population. This trend is likely to continue as economic growth is increasingly concentrated in UB. With its growing population and concerns in rising inequality, the city is facing increasing pressure to maintain and expand service provision (especially infrastructure). The local tax on wages is expected to continue to provide substantial revenues to the UB government, which will assist the growing demand for services. Additionally, a new 'capital city tax' is expected to come into effect in 2013. The decision of the central government (CG) to pursue further decentralization gives greater leadership to the UB government and its districts. It also provides local broader decision-making authority as well as opportunity for citizen's participation and for the improvement of governance and transparency. Therefore, a key challenge for UB and its districts is ensuring that the local fiscal system is sound and ready to handle a greater volume of revenues to achieve sustainable and inclusive growth. The city also needs to develop a robust and transparent fiscal management system if it is to make an effective use of new revenue sources. The main objective of this study is to understand the inner workings of the municipal finance system in Ulaanbaatar and its districts.Publication South East Europe Municipal Finance Review : Local Government Finance in the Western Balkans(Washington, DC, 2013-09)This report addresses the limited access to local governments of data and knowledge of municipal finance issues in South East Europe (SEE). The objective of the analytical work under the SEE Municipal Finance Review (MFR) aims to (i) contribute to improved understanding of local government management and finance in the SEE Region; and (ii) contribute to improving the quality and consistency of key municipal finance data for improved evidence based policy making. The analysis presented in this report comprises the first attempt to review and analyze a regional set of disaggregated sub-national finance data in the SEE Region. Main findings of the MFR are presented in this report. Following an introductory chapter, chapter 2 provides an overview of the decentralization framework in the SEE Region, including on the administrative and political structure of sub-national governments, their population size and distribution, and the service functions assigned to local governments. Chapter 3 explains in more detail the local government finance framework. This includes an overview of the structure and composition of sub-national finances, in particular (i) revenue and expenditure assignments; (ii) transfers and intergovernmental fiscal relations; and (iii) the evolving framework and realities of sub-national borrowing and debt. Chapter 4 provides a summary of the key trends and findings from the cross-country, regional analysis, complemented by detailed analysis of the disaggregated datasets, where available. Finally, Chapter 5 summarizes conclusions and provides some recommendations for a possible way forward. In the medium to long term, access to municipal finance information would contribute to increasing transparency and accountability of local governments, improving revenue collection and expenditure performance, optimizing budget allocation procedures, and strengthen local authorities' role and position in intergovernmental fiscal considerations and negotiations in the SEE countries.
Users also downloaded
Showing related downloaded files
Publication Jobs in a Changing Climate: Insights from World Bank Group Country Climate and Development Reports Covering 93 Economies(Washington, DC: World Bank, 2025-11-05)The World Bank Group’s Country Climate and Development Reports (CCDRs) provide a crosscutting look at how countries’ development prospects, and the job opportunities they offer to their people, can be threatened by climate impacts and supported by climate policies. Climate change and policies affect jobs through impacts on productivity, energy and material efficiency, and physical, human, and natural capital. They can also transform employment opportunities, especially through complementary measures that help workers and firms adapt to and benefit from new technologies and production practices. Prepared by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), CCDRs integrate country perspectives, climate science and economic modeling, private sector information, and policy analysis to assess how countries can successfully grow and develop their economies and create jobs despite increasing climate risks and while achieving their climate objectives and commitments. Each CCDR starts from the country’s development priorities, opportunities, and challenges, and is developed in close consultation with governments, businesses, and civil society, ensuring the recommendations reflect national priorities. By combining evidence on adaptation, resilience, and emissions pathways, CCDRs highlight where climate action can reinforce development and job creation, and where targeted policies are needed to manage risks and smooth labor market transitions. Taken together, these elements can help create local jobs, ensure economic transitions are just and inclusive, and equip workers and firms to navigate the disruptions and opportunities of a changing climate and changing technologies.Publication Kyrgyz Republic Country Climate and Development Report(Washington, DC: World Bank, 2025-11-03)This Country Climate and Development Report (CCDR) on the Kyrgyz Republic aims to support the country’s development goals amid a changing climate. The CCDR considers two policy scenarios up to 2050: the business-as-usual (BAU) and high-growth scenarios. As it quantifies the likely impacts of climate change on the Kyrgyz economy between now and 2050, the report highlights key government actions to best prepare for and adapt to climate impacts (referred to as “with adaptation” measures), with a particular focus on the time horizon up to 2030. The CCDR also outlines a path to net zero emissions by 2050 (referred to as “with mitigation” measures, “decarbonization,” or, simply, “net zero 2050”), highlighting associated development co-benefits.Publication Port Reform Toolkit(Washington, DC: World Bank, 2025-07-31)Ports are undergoing constant transformation, induced by changes in the global economy, technology, or the environment. Port reform is influenced by factors that include aspirations for change underpinned by complex internal and external drivers. In a sector where public and private interests must work together, closely managing change is important. Having the right tools is key for a successful port reform and improvement process which enables economic growth, creates jobs, and fosters sustainable development. For over two decades, the Port Reform Toolkit has been one of the most comprehensive guides for implementing port reforms. Along the way, the Toolkit has evolved in response to changing sectoral trends. The first edition, published in 2001, established a common language for policymakers and port industry stakeholders. It has since become the established reference for port privatization, labor, and modernization programs. Further experiences from a first wave of port reforms in Latin America, Africa, and Asia in the 1990s and early 2000s informed the second edition of the Toolkit, which was released in 2007. By that time, ports in developing economies had attracted over 21 billion dollars in investments from over 200 public-private partnership projects. In this context, the Port Reform Toolkit enabled port stakeholders to provide strategic advice to governments and the private sector.Publication Comoros Country Climate and Development Report(Washington, DC: World Bank, 2025-06-18)The Union of the Comoros (The Comoros) has significant vulnerability to climate change-related risks but has considerable opportunities to strengthen preparedness and resilience against these challenges. According to the Notre Dame Global Adaptation Index, the Comoros is the 29th-most vulnerable country to climate change and the 163rd most ready to adapt (out of 191). The Comoros archipelago is exposed to many natural hazards that adversely affect the country’s natural capital, people, and physical infrastructure. In 2014, the economic cost of climate-related disasters was estimated at 5.7 million dollars annually, equivalent to 9.2 percent of Gross Domestic Product (GDP). Between 2018 and 2023, as many as 11 tropical depressions or cyclones impacted the country, with Cyclone Kenneth causing the greatest damage, equivalent to 14 percent of GDP, resulting in total economic growth falling from 3.6 percent in 2018 to 1.9 percent in 2019. More than 345,000 people (40 percent of the population) were affected by the cyclone, with 185,000 people experiencing severe impacts and 12,000 people displaced. However, there is an opportunity for the country to grow more robust and shock-responsive, and to establish pre-positioned funding mechanisms to enhance future crisis response efforts. For the Comoros, adaptation and climate-resilient development are the key climate change focus areas, with the country projected to face 836 million dollars 2050 in additional costs due to climate-related impacts. Current plans to adapt to the impacts of climate change in the Comoros include efforts to improve water management, strengthen coastal protection, and develop climate-smart agriculture practices. Given the country’s reliance on its natural resource base for economic growth and mobility, protection of these resources from climate change will be essential for promoting resilient growth and development. In addition to growing the adaptive capacity of the country’s natural resource sectors, strategic economic diversification will be important to help minimize future climate impacts, and development activities will need to be undertaken in such a way as to attract low-carbon co-benefits. The Union of the Comoros is committed to addressing climate change through its Nationally Determined Contribution (NDC) and national priorities. The country’s NDC (which was revised in 2021 for a ten-year horizon) sets ambitious targets, with a goal of reducing greenhouse gas emissions by 23 percent by 2030. The country also plans to significantly increase the share of renewable energy in its energy portfolio, reaching 33 MW by 2030. This will not only promote low-carbon development but also reduce the country’s dependency on imported oil and coal, which currently make up 95 percent of the energy mix. Additionally, the Comoros has declared its intention to increase CO2 removals by 47 percent by 2030, compared to BAU.Publication Guinea-Bissau Country Climate and Development Report(Washington, DC: World Bank, 2024-10-23)Guinea-Bissau is endowed with a wealth of natural resources, with the highest natural capital per capita in West Africa (US3,874 dollars per capita), which could be leveraged for sustainable and resilient growth. However, Guinea-Bissau faces significant development hurdles, such as high poverty rates, political instability, and economic challenges, including an over-reliance on cashew nuts. Rural poverty has increased, and the nation's infrastructure, education, and health care systems are underdeveloped. Climate change poses a severe threat, potentially impacting agriculture, fisheries, and infrastructure. Without adaptation, it could lead to a significant cut in real GDP per capita (minus 7.3 percent by 2050) and increase in poverty (with up to over 200,000 additional poor by 2050, that is, 5 percent of the expected population, in the worst scenario). The country's low greenhouse gas emissions are expected to rise, mainly due to agriculture and land-use changes, with deforestation being a major contributing factor. Although Guinea-Bissau is a low emitter, it has high mitigation ambitions, targeting a 30 percent reduction in greenhouse gas emissions by 2030. The Nationally Determined Contribution outlines significant climate actions, with initiatives focused on forest conservation, sustainable agriculture, and community development. However, the country's political instability, institutional weaknesses, and limited financial resources pose challenges to implementing these climate commitments, which depend heavily on external funding. The financial sector's underdevelopment and vulnerability to external shocks limit its ability to support green investments, though reforms could enhance resilience. Guinea-Bissau must consider its climate financing as development financing and vice-versa, engage the private sector, and integrate climate goals with national development plans to ensure a sustainable future. Concessional climate financing is vital due to the underdeveloped financial sector and the government’s limited borrowing capacity. Addressing Guinea-Bissau's vulnerability to climate change and its structural issues requires a cohesive approach that integrates development and climate strategies. This could involve improving governance, diversifying the economy, protecting natural capital, developing human capital, and investing in sustainable agriculture and infrastructure. The transition to a more sustainable and inclusive development pathway that supports economic growth is possible, but requires focusing on key strategic sectors, enhancing institutional capacity, and creating the conditions to mobilize finance. As a highly vulnerable country, there are myriad needs in the different sectors; however, to be more efficient and effective, Guinea-Bissau should prioritize actions in a few sectors, especially actions on biodiversity, agriculture, and social protection. Low carbon development, especially in energy and forestry sectors, could provide cost-efficient solutions and attract climate finance, including from the private sector, which will support the overall development agenda.