MUNICIPAL FINANCE EQUALIZATION PROCESS IN LATVIA
Keywords:municipalities, municipal finance equalization
AbstractThe municipal finance equalization calculations in Latvia presently take into account the demographic indicators, but they do not depict accurately the municipal finance requirements; in order to precisely determine these numbers, other consequential criteria should be accounted for as well, such as infrastructure or other aspects characterising the peculiarities or needs of a certain territory. Inclusion of these new criteria in the process of determining the need for financing could serve as the basis for improvements to the existing system.
The purpose of this article is to analyze the municipal finance situation in Latvia, starting with 1998, to show the differences in their income and expenditure and point out the trends that would materialize in case the system remains unchanged.
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