Abstract

Since 2003, the level of local government investment in Bulgaria has increased substantially. On average for the period 2003-2017 local public sector accounted for about one-thirds of total public sector capital spending. However, the contribution of Bulgarian municipalities to the public sector investment shows significant differences as compared to the prevailing EU pattern. It was only in the last few years that the level of local public investment in Bulgaria started approaching the EU average, primarily as a result of resources coming from European funds. The main objective of this article is to overview municipal investment activity during the years 2003 through 2017 and to assess direct investment capacity of local governments in Bulgaria. In addition, key factors affecting the levels and dynamics of local government capital spending are also being examined.

JEL: H77, R51, O18