Non-financial reasons for the failure of the fi nancial policy at the municipal level

This article identifies and analyses the reasons that have led to the failures of the financial policy at the municipal level. Based on the authors own empirical research, it highlights the major reasons leading to an ineffective financial management at the municipal level, such as (1) failure of a constructive dialogue between different authorities, (2) a negative impact of personal characteristics of the head of the municipality on the quality of management, and (3) lack of incentives in municipal officials to increase their revenue base. There are some recommendations at the end of article that, in the authors opinion, can lead to a higher efficiency of the municipal financial policy.