The existence of active and participating citizens is an essential part of a democratic society. In recent years, the concept of political participation has expanded, and new ways of involving individuals and groups in community or local decision-making processes have emerged. Participatory budgeting is one of the ways citizens participate in public decision-making. This research provides a comparative analysis on development of selected factors influencing the sustainability of participatory budgeting in regional cities (urban regional centres) in Czechia and Slovakia. The analysis is complemented by case studies in two cities that run the participatory budgeting the longest (Brno in Czechia, Bansk & aacute; Bystrica in Slovakia). The findings indicate relatively low interest in participatory budgeting in both countries and conflicting goals for ensuring sustainability, e.g. development in the amount allocated for PB. The paper summarises the latest developments of PB in the analysed urban regional centres. It adds to the knowledge of this tool in the context of the Central and Eastern Europe region and helps policymakers focus on important factors influencing the sustainability of participatory budgeting.

This chapter focuses on the fiscal policy in the Czech Republic. It introduces the theoretical approach to public finance according to leading authors and experts in the field. From the legal perspective, it is necessary to highlight the constitutional foundations of public finance and budgetary institutions. However, public finance does not have a crucial role in the Czech Constitution and is not regulated in the Constitution in detail. The following section deals with the budget law, which is strongly connected to state fiscal policy. While fiscal policy as such is the responsibility of the entire government, the central state body upon which attention is focused in the area of public budgets is the Ministry of Finance. The most important laws in the area of fiscal policy include laws on the state budget and budgetary rules for the state budget and local self-government budgets. These are complemented by laws on the issuance of state bonds and the state bond programme. Most recently, the Act on the Rules of Budgetary Responsibility was introduced to regulate fiscal policy. The chapter presents several insights into state debt issues and fiscal deficits. It also analyses the Czech Republic’s crisis management in the context of crisis management at the European Union level. Finally, the main findings are summarised, and several de lege ferenda recommendations are offered.

Tax revenues of municipalities can be divided into shared and entrusted (own, local) taxes in the Czech Republic. There are several local taxes sensu lato, the most important of which is the immovable property tax. This article is set to evaluate its role in the Czech municipal budgets, predominantly by way of comparing the economic data concerning the revenues of local self-government units in OECD countries. From a legal perspective, the text describes and critically analyzes the legal regulation of the Czech immovable property tax and specifically points out municipalities’ potential to influence their revenue with regard to political debates and recent changes in legal regulation. In the discussion part, the challenges connected with the changes in the legal regulation of the immovable property tax and changes in the budget determination of taxes are defined, and the impacts of these changes are analyzed in details. The authors argue that the role of the property tax is negligible and municipalities must rely on sources of funding other than local taxes to meet their statutory obligations.

This chapter deals with monetary policy in the Czech Republic, in which the Czech National Bank plays a crucial role. Broadly, the objective of monetary policy is to ensure price stability. Notably, Czech Republic has not joined the Eurozone – it is a member of the European System of Financial Supervision and cooperates with the European Systemic Risk Board and European Supervisory Authorities. While, prior to the COVID-19 pandemic, the Czech Republic met most of the Maastricht criteria for the euro, with the exception of compliance with normal exchange rate fluctuation margins, the situation has changed with the pandemic: currently, it only meets the criterion of the total general government debt-to-GDP ratio. Meanwhile, the most important factor for decision-making is the degree of alignment of the Czech economy with the Eurozone, which is key to outweighing the gains from the introduction of the euro over the losses from its own monetary policy. Presently, it is not possible to state that the Czech economy is significantly aligned with the euro area. As a non-member of the euro area, the Czech Republic is not obliged to join the European Banking Union. Important to note is that the Czech Republic regularly prepares a study that analyses all relevant aspects of its possible participation in the European Banking Union to help it make an informed decision on whether to join the European Banking Union before adopting the euro. These studies show that the banking sector in the Czech Republic is highly stable; therefore, it is increasingly advantageous for the Czech Republic to remain outside the European Banking Union. Notably, the Czech Republic used interest rates and foreign exchange interventions to ensure the stability of the economy during the pandemic and, subsequently, the Russo-Ukrainian war.

State aid and subsidy policy in the Czech Republic, especially the manner in which the country’s subsidy policy is aligned with regulations of the EU law, form the topic of discussion in this chapter. Direct aid and indirect aid are the two categories of aid covered under the subsidy policy, which has been a subject of much debate in Czech society. The first issue deals with the very essence of state subsidies, that is, whether the benefits of state incentives outweigh their disadvantages. The second is whether the rules are appropriately established for specific incentives and, for example, whether the incentive amount is adequate. The Office for the Protection of Competition and the Ministry of Agriculture and Fisheries monitors, coordinates, and controls state aid. Several entities exploited the advantages offered by state subsidies, although the provision of some subsidies was highly controversial. During the COVID-19 crisis, 18 COVID programmes were offered as the Czech Republic required substantial recovery of the economy and societal conditions. Further, during Russia’s invasion of Ukraine, the energy crisis loomed, making it necessary to resolve this largely through green and digital transitions. A separate chapter is dedicated to fiscal state aid. State aid also provides an advantage through a reduction of the company’s tax burden. These advantages can be used in varied ways, depending on the specific tax. However, despite several reservations (including a certain administrative complexity), these subsidies did contribute to developing the investment environment in the Czech Republic and offered opportunities for financing a wide range of products, such as project plans of towns and municipalities, small- and medium-sized enterprises, and non-profit organisations.

Abstract This article focuses on control of state debt in the Czech Republic. State debt contributes the most to the public debt. Although the Czech Republic is one of the countries with the smallest state debts in the European Union, it has also been the country whose debt has grown fastest year-on-year in the last two years. The aim of this article is to investigate the possibilities to improve control of state debt in the Czech Republic. It works with the hypothesis that control of state debt is problematic in the Czech Republic and needs some amendments related to state debt regulation. The article is divided into two parts. First, a theoretical overview of state debt is included, regulation de lege lata is summarized and the current situation relating to state debt during the Covid-19 pandemic is stressed. Second, research findings mentioned in the first part are analysed. By synthesizing these research findings, I suggest amendments de lege ferenda.

Abstract Economic activity based on producing goods and services is essential for the development of any society. Individuals can carry out this economic activity in dependent activities (employment) or entrepreneurship (self-employment). A third way is the so-called „Švarc-system,” which is not legal in the Czech Republic. It is a situation where persons performing normal activities for the entrepreneur in a dependent relationship are not his employees but formally act as self-employment. There are currently discussions about the legalization of the system among politicians and experts. This article introduces how labor and tax law regulations influence attitudes toward economic activity and development. The research methods to achieve this aim include description, critical analysis, and synthesis. The findings described in this article are that the Švarc-system based on self-employment allows greater freedom for employers and employees and smaller payments to public budgets than forms of dependent activities. A high level of autonomy increases development in various areas and helps social development. The implication falls into practical rather than theoretical fields. Therefore, regulation in this area should be lowered to support further development. This article’s originality is that it reflects on the academic impacts of the legalization of the system from legal and economic points of view. These conclusions should help reflect on the regulation of legislation in this field.

Research background: Flexibility has become a possible means for manufacturing companies to better compete in competitive markets. Furthermore, innovations are perceived as an important factor in company strategy, which can differentiate the company from the competition. Purpose of the article: This present study investigates the problems of cooperation flexibility and innovation flexibility in manufacturing companies among electrical engineering companies in the Czech Republic. The aim of this paper is to identify the impact of cooperation flexibility on innovation flexibility in small and medium-sized manufacturing companies. Methods: A questionnaire addressed to SMEs in the form of the Likert scale was prepared to gather information about cooperation flexibility and innovation flexibility. All parts of the questionnaire were tested using Cronbach Alpha. Spearman correlation and regression analysis were used for analysis. Findings & value added: The results of the research show that external cooperation flexibility and internal cooperation flexibility is related to innovation flexibility in SMEs. Results of the research show that there is a positive relationship 1) between external cooperation flexibility and innovation flexibility and 2) between innovation flexibility and business performance at SMEs. The findings of the research contribute to an understanding of the relationship between cooperation flexibility, innovation flexibility and also innovation performance. The novelty value of this paper lies in its perception of flexibility as having two parts, namely external (with suppliers and customers) and internal cooperation flexibility. In addition, innovation flexibility was investigated in two fields, product, and accompanying services to products. The view mentioned provides a complex view of flexibility.

Autoři publikace cilili na problematiku fiskalni odpovědnosti statu. Tento druh odpovědnosti je třeba odlisovat od odpovědnosti v běžnem pravnim smyslu. Podstata fiskalni odpovědnosti spociva v tzv. odpovědnosti, kterou na sebe vzal stat a dle ktere musi stat disponovat dostatecnými financnimi zdroji, aby mohl vykonavat veskere sve ulohy, jako bezpecnost a zajistěni pravni jistoty pro sve obyvatele. Existuje cela řada pohledů, z nichž může být fiskalni odpovědnost zkoumana. Autoři teto publikace si zvolili klicove oblasti, teoreticke i prakticke, ktere uchopili z pravni i ekonomicke perspektivy.

This paper deals with the efficiency of tax collection in the Czech Republic. The first part of this paper describes theoretical approaches to efficiency of taxes. Considering the aim of the article, there are no mathematical models of efficiency presented. The second part introduces efficiency from the point of view of law. The next part involves the application of efficiency of tax collection, especially how to measure efficiency and the main barriers for its establishment in the Czech Republic. The last part of the paper offers the summing up of gained knowledge. The aim of this paper is to detect if the current approach to tax collection contributes to higher efficiency.

Purpose: Literature offers many benefits associated with participatory budgeting. However, the implementation of participatory budgeting (influenced by many factors) is unique in every country, and it cannot be linked only to advantages. Presenting the advantages and disadvantages of participatory budgeting can extend the theoretical knowledge and better understand this field. The purpose of this paper is to evaluate the development of participatory budgeting in the Czech Republic. It focuses on the implementation and results of participatory budgeting in Brno's city (the second-largest city in the Czech Republic), which introduced the concept in 2017. Design/Methodology/Approach: The analysis of participatory budgeting is based on a critical analysis of recent literature. In the empirical part, we focused on the implementation of participatory budgeting in Brno. We have analyzed a few factors: voting results, the size of the participatory budget, and winning projects. A qualitative method was applied to synthesize this research. Findings: When assessing participatory budgeting in Brno, we identified both the positive and negative aspects of its implementation. To sum up, we have observed that during the three years of participatory budgeting in Brno, the negative aspects outweighed the positive aspects. Practical Implications: This study's results can help other municipalities of similar size with a decision whether (and how) to implement participatory budgeting. Likewise, it can help other cities to avoid some mistakes. Originality/Value: This paper extends existing findings mentioned in many scientific studies by referring to the Czech experience where negative aspects of participatory budgeting can outweigh its positive aspects.

Purpose: Flexibility is important for firms to attain and sustain a competitive advantage. However, innovation is also a crucial aspect that not only manufacturers have to manage when planning their business strategies to build a competitive advantage. This present study investigates the problems of flexibility in manufacturing companies via different points of view among electrical engineering companies in the Czech Republic. The aim of this paper is to identify the impact of innovative flexibility on innovation performance by small and medium-sized manufacturing companies. Methodology: To fulfill the research objective, a questionnaire in the form of the Likert scale was prepared to gather information. A total of 112 SMEs from the Czech Republic participated in the survey from July to October 2019. This is the first empirical research focused on this area held among electrical engineering companies in the Czech Republic. Findings: Innovative flexibility is positively associated with innovation performance in small and medium manufacturing companies. Research implications: Our study shows a great deal of interesting information related to flexibility in manufacturing companies. The findings of the research contribute to an understanding of the relationship between innovation flexibility and innovation performance. Results of the research show that there is a positive relationship between innovation flexibility in products and innovation performance and innovation flexibility in accompanying services and innovation flexibility as well. Value: This research study provides insights into the complex relationship between innovation flexibility and innovation development. There is still little information concerning understanding of flexibility in manufacturing companies.

This paper provides a deeper analysis of the relationships between interfunctional coordination (IFC) and business performance (BP).IFC is studied in many fields such as marketing, management, logistics, informatics or human resources.The novelty lies in offering an original perspective on IFC and its impact on individual items of BP.The statistical analysis of the relationship between IFC and BP is based on a survey of small and medium-sized manufacturers.Sufficient models were identified by a stepwise backward procedure based on Akaike information criterion (AIC).The results show that it is possible to find a sufficient model for each item of BP.Sets of IFC items with exclusively positive or negative influence on at least two BP items were identified.These items of IFC are aimed on cooperative arrangement, expertise, leadership style, coordination activities and control.This research brings theoretical contributions and can be useful for managers.

The paper deals with interfunctional coordination (IFC) from ethical and environmental point of view It will be interesting to know if the parts of IFC connected with ethical and environmental aspects have positive or negative influence on business performance. Data was gained from 60 SMEs producing electrical equipment and electronic components in the Czech Republic. Survey questionnaire and critical discussion with the literature were used. Kaiser-Meyer-Olkin (KMO) test and Bartett's sphericity test were applied. For analysing the influence of ethical and environmental aspect on business performance Spearman's rank correlation was used. The results show: (1) a positive relation between ethical aspects and business performance, (2) no positive relation between implementation of environmental aspects and business performance, and (3) no difference in results in marketing business performance and financial business performance. The results can suggest that a preference towards ethical decisions and behaviour leads to a higher business performance and by contraries, environmental aspects leads to smaller business performance. The collected data shows that environmental and ethical decisions of managers in the Czech Republic can differ from environmental and ethical decisions of managers in different countries.

This contribution deals with historical view on public finance in the Czech Republic. The main aim of the contribution is to confirm or disprove the hypothesis that virtual and reality conception of public finance differ. Description, analysis, comparison and synthesis are used for writing this contribution. Novelty of this text is that public finance is analysed from a virtual and real point of view. The reality concept includes the evolution of state and society approaches to public finance. The virtual concept involves the evolution of the term “public finance.”

Purpose: Manufacturing companies are positioning themselves increasingly as providers of services and solutions to their products in order to satisfy the customers' various needs and wishes. The paper presents the results of a research investigating the items related to innovation and flexibility of services among electrical engineering companies in the Czech Republic. The aim of the paper is to find out if innovation and flexibility in services provided by manufacturing companies have a positive impact on the customers.Design/methodology/approach: To address the research objective, the questionnaire in the form of the Likert scale was prepared to gather information about services. A total of 60 SMEs from the South Moravian region of the Czech Republic participated in the survey during 2014. This is a first empirical research focused on this area held among the electric engineering companies in the Czech Republic.Findings: The main findings show that there is no direct impact of flexibility and innovation in services on customers, but it can be said that flexibility and innovation perceived by customers are still affecting, although less than we expected.Research/practical implications: In some areas, innovation and flexibility had strong positive impact on customers and there was certainly no negative impact. Even if there is no direct impact of flexibility and innovation on customers here, it can be said that flexibility and innovation by customers are still affecting, although less than we expected. Managers will certainly not defraud themselves if they put emphasis on innovation and increasing flexibility for services offered by manufacturing companies.Originality/value: There is still little information about understanding the service issue in manufacturing companies. Therefore, the paper is focused on innovation and flexibility in services provided by manufacturers in the Czech Republic.

The purpose of the paper is to expand the knowledge about interfunctional coordination (IFC). The term IFC has been used for 50 years and it extends to many branches. The most popular ones are in marketing, logistics and IT management. The purpose of IFC is to develop collaboration between the diverse departments within an organization. The goal of the paper is to describe the relationship between IFC on the B2B market, especially if IFC in one company can influence customer success in business. The research was undertaken with companies producing electronic components and electrical equipment in the region of South Moravia in the Czech Republic. 60 SME have answered the questionnaire. The Spearman’s rank correlation test was used to analyse the influence of IFC of companies on the success of their customers. The results show that the implementation of IFC in a company has a positive relationship on the success of its customers.

Research background: Interfunctional coordination (IFC) is a part of market orientation and at the same time an approach which helps to improve cooperation between different departments or functions in a company. Market orientation is an approach aimed at external and internal elements and activities leading to performance increase. Services offered by a manufacturer are activities complementing their products. Manufacturers can benefit from the service differentiation and use it to design alternative marketing strategies. Generally, IFC and services ? contributes to higher positive effect on business performance. For this reason, it is interesting to know if synergy of IFC and services have a higher positive effect on business performance. Purpose of the article: This article aims to determine how IFC and services at manufacturing companies in the Czech Republic influence business performance. The research question is as follows: Does the synergy of IFC and services in companies producing electrical equipment and electronic components have a higher positive effect on business performance? Methods: Sixty SME?s filled in a questionnaire to gather information about IFC and services. For measurement of correlation for two variables, Spearman's rank correlation coefficient was chosen. Regression analysis was used for measuring the synergy. Findings & Value added: The main finding shows that the synergy of the quantities observed has not been confirmed, although some of the following relations were approved such as a positive relationship between: a) some items of IFC and items of business performance, b) some items of services and items of business performance and c) items of IFC and items of services. The result of the paper shows further consequences of IFC and services in today?s manufacturing companies.