Taking Advantage of Voluntary Associations of Municipalities for Financing Public Investment Project

Abstract

Abstract Due to the settlement structure of the Czech Republic which is quite extensive, there is a large number of small municipalities on its territory, which do not have the possibility to finance larger investment projects aiming at the development of their area. Therefore, it is important, if not essential, for such municipalities to join into associations with other municipalities. The article deals with the characteristics of possible forms of inter-municipal cooperation with a more detailed focus on taking advantage of voluntary associations of municipalities. The data from the municipal association register shows that a substantial part of municipal associations was created for the purpose of building drinking water supply, sewerage systems or waste water treatment plants. Although this purpose is still up-to-date, the aim of this article is to show how to take advantage of the associations of municipalities also for other investment projects and to propose an optimal way of financing. The main aim of this article is to find out if it is possible to take advantage of the associations of municipalities for financing investment activities of municipalities. Furthermore, based on the analysis of the current state of the register of associations municipalities in the Czech Republic, it tries to propose optimal ways of financing such activities. Based on the analysis of several investment projects financing in municipalities, the research evaluates whether joining of municipalities into voluntary associations and the implementation of construction works via these associations is generally beneficial for them. The resulting proposal described in the article can serve municipalities as a well-arranged guide to the organization and financing of their investment plans.