Endangered Municipalities ? Case Study of Three Small and Critically Indebted Czech Municipalities

This paper addresses the issue of Czech small critically indebted municipalities, which has been neglected in the European discourse after successful European consolidation reforms. The Czech Republic is one of the Central European countries where there is no relevant debate on the mandatory amalgamation of small municipalities that are often faced with a combination of multiple risk factors.

This paper aims to analyze a sample of the Czech municipalities that are threatened by a combination of their small size and critical indebtedness. A research of the sample focuses on a) the identification of the reasons for critical indebtedness, b) the impact of critical indebtedness on the delivery of services and local democracy and c) the options and strategies to overcome the issues related to critical indebtedness.

Methodologically, the paper is a multiple-case study of three small critically indebted municipalities of the Karlovy Vary region, which was considered the worst region in 2012 in terms of the share of critically indebted municipalities, with several long-term critically indebted municipalities on its territory. Based on the media monitoring and economic criteria, the municipalities of Prameny, Bublava and Nebanice have been chosen.

The main finding of our research is the identification of so-called endangered chains: 1) small municipalities with low revenues resulting in 2) limited administrative and expert capacity that contributes to 3) a mistake in a large investment project resulting in 4) the economic collapse of the municipality that endangers the provision of services, and in the case of 5) insufficient social capital this can lead to agony of local self-government and the collapse of the municipality. According to the findings, the examined municipalities of Nebanice and Bublava correspond to the chain link 4, and in the case of Prameny it is possible to speak about the chain link 5.