SciPap, Volume 29 (2021)

Open Access Article SciPap-1414

by Dominika Tóthová, Jana Soukopová

Abstract: Acute nasopharyngitis and acute bronchitis are common childhood diseases. The problem is that the cost of these different subjects in the economy is unknown. This article aims at estimating the cost of acute nasopharyngitis and acute bronchitis per incidence from the perspective of society, employers, state budget, system of healthcare and households in children aged 4–15 years in the Czech Republic. We used an incidence-based Cost-Of-Illness study based on the typical course of disease. We estimated the mean societal cost per episode of acute nasopharyngitis at EUR 541 (children 4–10 years) and EUR 536 (children 11–15 years) and 1 episode of acute bronchitis at EUR 848 (children 4–10 years) and EUR 845 (children 11–15 years). Overall, the state budget and employers bear the highest costs in the Czech Republic. We estimated the share of cost from the perspective of the state budget at 46.9–49% and from the perspective of employers at 58.2–60%. The majority of these costs arise in indirect costs in connection with parents’ absenteeism from work.

Keywords: Cost-Of-Illness, Acute Nasopharyngitis, Acute Bronchitis, Children, Perspective

JEL classification: H51, I13, I14, I18, I31

Open Access Article SciPap-1416

by Martina Halásková, Václav Friedrich, Ivana Čermáková

Abstract: Systems of civil service reflect specific needs, traditions and institutional fundamentals of every state. The paper provides an outline of the European context of civil service, characteristics of basic features of civil service in EU countries, and evaluation of selected determinants of civil service from the perspectives of human resources, finances, and performance. Factor analysis, hierarchical cluster analysis and analysis of variance are applied in the research to evaluate the period 2012-2019 in the 27 EU countries. Factor analysis was used to assign the selected determinants of civil service in the EU countries with the three factors created (performance of civil service, financial dimension of civil service, employees of civil service). The evaluation of the factors of the civil service in the EU countries using hierarchical cluster analysis has resulted in five clusters of countries with similar characteristic features of civil service. The strongest similarity is seen in the clusters of the EU countries in performance of civil service and employees of civil service. The results of the EU countries also indicate similarity of average values of civil service factors. Analysis of civil service determinants has proved that in the majority of countries placed in the same cluster according to the similarity of civil service, a relation exists in terms of the same tradition of the civil service but also in terms of the geographical viewpoint. Despite differences, similar tendencies can be observed related to increased flexibility, performance and modernisation of civil service systems.

Keywords: EU Countries, Factor Analysis, Hierarchical Cluster Analysis, Civil Service, Civil Servants, Determinants Of Civil Service

JEL classification: H10, H83, C38

Open Access Review SciPap-1395

by Michal Lendvorský, Daniela Mališová, Bernard Pekár, Beáta Mikušová Meričková, Jana Štrangfeldová

Abstract: Tackling corruption regularly appears on the agendas of almost all governments. Anti-corruption public policies aim to prevent corrupt behaviour both at the highest levels of government and in everyday social life. On the one hand, corruption seriously undermines the democratic principles of the rule of law; on the other hand, the enforceability of political accountability linked to the rule of law determines the level of corruption. The aim of the study is to identify the enforceability of legal responsibility for corrupt acts against public officials in the Slovak political arena during the electoral periods from 1994 to 2020. This objective is fulfilled by answering research questions focused on the incidence rate and definition of corrupt conduct in the Slovak Republic environment. The main method of the paper is a collective case study conducted on 219 cases. The results showed that the societal pressure for accountability of political accountability is increasing over time. Hence, the importance of anti-corruption public policy is growing, but its effectiveness remains questionable. The results of the research point to low levels of accountability, especially under left-wing governments.

Keywords: Corruption, Rule Of Law, Political Accountability, Anti-Corruption Policy

JEL classification: D73, K49

Open Access Article SciPap-1336

by Eva Ardielli

Abstract: One of the main goals at the European level is that healthcare systems must be accessible but at the same time cost-effective and sustainable in the long term. The implementation of eHealth is one way to contribute to this goal. The presented paper is focused on the evaluation of the usage of eHealth tools in medical clinics in the Czech Republic. eHealth development is an important tool of health policy in the Czech Republic and an important goal of Czech health care reforms, as it has the potential to improve the availability of healthcare and to increase its quality and effectiveness. The aim of the paper is to evaluate the use of eHealth tools adopted in primary care medical clinics according to the type of provided healthcare and according to the NUTS 3 regions in the Czech Republic. The evaluation is performed by application of the multicriteria decision-making methods. The research results indicate that the usage of eHealth tools in medical clinics vary significantly depending on the type of healthcare provided and also in individual NUTS 3 regions. It was found that the eHealth tools are used to the greatest extent in gynecological clinics and to a lesser extent in dentist clinics. Based on the comparison of the eHealth Index, the ranking of the regions in the Czech Republic was determined from the most successful to the least successful in terms of the use of eHealth tools in medical clinics.

Keywords: Czech Republic, Topsis, ICT, Ehealth, Mcdm Methods, Outpatient Healthcare

JEL classification: H75, I11, I18

Open Access Article SciPap-1344

by Farrukh Nawaz, Omar Mahmoud Al-Ammary, Misbah Sadiq

Abstract: Capital stock is possessing pivotal importance in stimulating the economic growth and development of any country. Inward FDI is considered as one of the important catalysts of economic development particularly for the resource and capital poor countries. In this article we have examined the relationship between inward FDI and economic growth in case of one of the emerging economies of Latin America i.e., Brazil. We took annual time series data for the dependent and independent variables like inward FDI, per capita Gross Domestic Product (GDP), employment, capital formation, and exports for the period ranging from 1996 to 2019. Initially, we applied Pearson Correlation test for examining the issue of Multicollinearity. Then we ran Ordinary Least Square Regression and Random Effect Regression Analysis for gauging the nature of relationship between the variables as well as for testing the robustness of the results. We found that FDI has a positive and significant relationship with GDP and the exports. Whereas, FDI has insignificant relationship with the employment and capital formation. The article holds an important policy implication for the other developing countries of Latin America; they need to attract good amount of inward FDI to achieve the robust economic growth and development.

Keywords: Economic Growth, Employment, Brazil, Inward Fdi, Exports, Capital Formation, Latin America.

JEL classification: F21, F23, F43

Open Access Article SciPap-1364

by Vineta Račaitė-Samušienė, Diana Šaparnienė, Vita Jukneviciene

Abstract: Contemporary challenges require public sector institutions to adapt the changing environment and to ensure an appropriate internal management processes, including the leadership. Leaders are expected to inspire and create a vision, and advocate for that vision throughout the periods of growth, disruption or uncertainty. In recent years of pandemic the importance of change leadership increases in local self-government. The aim of this article is to examine the change leadership in Lithuanian municipal administration in the context of the COVID-19 pandemic and on the basis of research results to form the assumptions of strengthening of change leadership in local self-government organisations. Analysis of theoretical aspects revealed main features of change leadership and its connection with transformational leadership in the context of public administration institutions focusing on the COVID-19 pandemic. The scientific methods such as document analysis and qualitative semi-structured interview have been used for the empirical research, based on the case study of selected Lithuanian municipal administration as the field of research. The research results revealed that during the period of changes assumed by the COVID-19 pandemic the managers of Lithuanian municipal administration act like leaders of change, resolving problems in teams and flexibly reacting to current issues.

Keywords: Public Sector, Local Self-Government, Covid-19, Lithuania, Change Leadership, Transformational Leadership, Municipal Administration

JEL classification: O15, H12, J45

Open Access Article SciPap-1374

by Vojtěch Sadil, Jana Přílučíková, Juraj Sipko

Abstract: Frequently noted inadequately explored connections between currency internationalization and expected change in the polarity of the international monetary system in the international relations literature are commanding the renewed attention and vigorous debate for more international monetary arena studies. This paper examines the potential of competing currencies to internationalize. For the first time, we utilize a fuzzy logic-based multi-dimensional model assessing separately the internationalization potential of 14 competing currencies in 2020 to predict whether the international monetary system is likely to remain unipolar and US dollar based, or evolve into a multipolar international monetary arena. The results suggest comparable levels of currency internationalization exist, indicating that the international monetary system may be further shaped into a more competitive (multipolar) monetary environment, controlling for economic, convertibility, monetary stability, political and legal factors. Finally, our results have policy implications since determined currency internationalization potential levels may facilitate economists and policymakers better understanding which currencies may play an increasingly large role in becoming a dominant international currency in the international monetary system.

Keywords: Fuzzy Logic, Competition, International Monetary System, Currency Internationalization, Multi-Polarity

JEL classification: F31, F33, F63

Open Access Article SciPap-1323

by Svitlana Slava, Vladyslava Puhinska

Abstract: This paper suggests a way of aligning two economically related, but sometimes antinomic in interests goals: enterprise performance indicators and respectively connected pay system using goal-based motivational design. Responding to this, the aspects of enterprise performance/pay relations are analysed through the links specifically between net revenue and labour productivity, from one side, and structural components of remuneration, from the other. The sample includes nineteen public forest enterprises, in Transcarpathia, Western Ukraine, and represents the total number of the forest enterprises with similar activities. The research results contribute to the enterprise performance-pay theorisation by adding (1) a generalised regional relational model aiming at measuring functionality of existing connections between enterprise performance and structural components of total wage remunerations, and (2) developed an adaptive regional relational model of enterprise-goals-linked pay with differentiated levels of defined links.

Keywords: Ukraine, Enterprise-Performance-Related Pay, Remuneration Structure, Transcarpathia

JEL classification: J31, Q23, R19

Open Access Article SciPap-1355

by Renata Halásková, Pavel Bednář

Abstract: Healthcare in European countries is provided through different systems run at national levels. The aim of the article is to evaluate selected health care indicators in EU countries, while accentuating similarities and differences between the EU countries in the context of health care systems. Applying the method of multivariate analysis, the selected health care indicators (from the areas of financing, service provision, health status) are evaluated on a set of 27 EU countries in the period 2013-2018. Factor analysis was applied to generate two factors (i.e. expenditures and satisfaction with health care, health status and bed availability in hospitals) from the original indicators of health care. As a next step, hierarchical cluster analysis was utilised to divide the EU countries into six clusters by similarity of the health care factors. The results of the factor analysis demonstrate marked differences between the countries regarding the evaluated health care factors. A higher (lower) level of socio-economic development is the aspect of better (worse) results of health care in the majority of the countries evaluated. However, according to the evaluated health care factors, clusters of similar countries used different systems of health care by type and source of financing. The findings thus demonstrate both similar and different approaches towards the provision of health care and funding health care systems in EU countries.

Keywords: Health Care, Health Care Financing, Health Care Indicators, Health Care Systems, Methods Of Multivariate Analysis

JEL classification: H51, I15, I18, C38

Open Access Article SciPap-1268

by Zuzana Janková

Abstract: This article aims to explore the main areas of research, development trends and provide a systematic overview of publications in the field of artificial intelligence in financial markets. The bibliometric tool VOSViewer is used in this paper. We analyzed 353 articles and contributions obtained from the database of Web of Science, and summarized our findings as follows: artificial intelligence is becoming increasingly widespread in the field of finance and interdisciplinary interconnection; artificial intelligence tools such as neural networks and fuzzy logic are most often used to predict the development of financial time series, or to create decision models; the most important cited authors in this field are Markowitz and Lebaron. Expert System with Application is the cradle of a significant part of fundamental research in the field of artificial intelligence. By using effective bibliometric methods, we provide comprehensive analysis and in-depth insight into the subject area of research, which allows individuals and especially new beginners interested in this area to obtain valuable information and possible direction of future research. The study is recommended to focus on hybrid models prediction of individual sectors of the financial markets, which are present in the current research on the rise.

Keywords: Fuzzy Logic, Ann, Neural Network, Artificial Intelligence, Ai, Bibliometric Analysis, Financial Market, Stock Market.

JEL classification: G12, G15, G17

Open Access Review SciPap-1341

by Ivan Vershinin

Abstract: Although the use of patent indicators in statistics has been under discussion for a long time, there are surprisingly very few studies devoted to explaining the use of patent indicators as performance indicators in performance-based research funding systems. The widespread assumption is based on the perception that patents have some recognizable value as an element of innovation process and this value is undoubtedly transferred to patents that are created in order to fulfill performance indicators. However, there is still no established distinction in the literature between patent indicators used in statistical analysis and patent performance indicators used as goal setting and evaluation tools in the context of performance-based research funding systems. This article is aimed at filling the gap and seeks to clarify the theoretical validity of the use of patent performance indicators in such context. Based on the review of the literature, the article compares the results of seminal works on the nature of patenting and patent indicators to the purposes of its use as patent performance indicators in performance-based research funding systems. The results demonstrate at least five arguments in favor of the statement that the use of patent indicators in the context of performance-based research funding systems requires rethinking.

Keywords: Research Policy, Performance-Based Research Funding Systems, Public Research Organizations, Performance Indicators, Patent Indicators, Side Effects, Moral Hazard

JEL classification: O31, O34, O38, I23, I28

Open Access Article SciPap-1342

by Peter Burger, Viera Hovančíková

Abstract: This paper aims to estimate the expected development of the share of employees in sectors of the national economy in selected regions of Slovakia (Bratislava, Košice, and Prešov Regions) and in the Slovak Republic as a whole up to 2025. It also predicts which sectors of the national economy (primary, secondary, tertiary or quaternary) will grow in Slovakia in 2020–2025 and which sectors will stagnate or decline. The results predict a steadily declining share of people employed in the primary and secondary sectors in Slovakia and in the self-governing regions investigated. In contrast, the share of the quaternary sector in total employment is likely to increase up to 2025 both in Slovakia and in the Bratislava and Košice Regions. The share of employees in the tertiary sector is expected to grow in Slovakia, but at the same time it is confirmed that in the Bratislava Region there is a gradual reallocation of employees working in the services sector and an increase in the share of employees working in the quaternary sector at the expense of the tertiary sector. This expected development of the shares of employees in the individual sectors and, in particular, the increase in the share of employees in the quaternary sector are in line with the reallocation of the shares of employees in the sectors of the national economies of the developed EU countries, especially the countries of Western and Northern Europe.

Keywords: Sectoral Division, Sectoral Change, Share Of Employees, Quaternary Economy, Employment Trends, National Economy.

JEL classification: J21, O11, O14

Open Access Article SciPap-1315

by Denis Syromyatnikov, Pavel Konev, Mikhail Popov, Naila Sultanova

Abstract: Today, the global community is faced with a new vision of the economy that aims to coordinate public policies with the purpose of ensuring sustainable growth to facilitate economic recovery under the current conditions and after the COVID-19 pandemic. The purpose of the study is to create a basic typology of strategies to improve national competitiveness in the context of globalization. The research methodology includes a comparison of economic development models and strategies for different countries around the world and an analysis of data from international organizations. The benchmarking of national strategies is based on the measurements’ evaluation for three groups of the GCI index components. The originality of the study stems from the fact that it proposed choosing a strategy for the development of the national economy with account taken of the level of its economic development. The strengths and weaknesses of competitiveness in the profile of the economy are identified and, whereby, a strategy to increase national competitiveness is chosen, according to the results of this analysis. The results of the study showed that the American model of economic development is the most competitive one among the examined models. In addition, the paper shows that the application of practical strategies for social integration, as well as mergers and acquisitions, will contribute to enhancing the national competitiveness in the context of economic growth and raising the living standards of the population. The findings of this research provide practical guidance for related professionals attempting to choose a suitable public policy to form effective and holistic national strategies and monitor the country’s progress over time.

Keywords: Strategic Decisions, Market Globalization, Identity Politics, Optimal Balance, Economic Models

JEL classification: M21, F01, F63

Open Access Article SciPap-1280

by Valeriy Balan, Vasyl Pryimak, Inna Tymchenko

Abstract: We offer a hybrid approach to strategic diagnostics of the industry competition based on the application of M. Porter’s model of five forces, tools of logical-linguistic modelling, and fuzzy-set theory. Two complementary calculation schemes were developed to assess the level of competition in the industry. The first of them is based on fuzzy multicriteria analysis using the Fuzzy SAW method, the second is based on the construction of a logical-linguistic model with fuzzy expert knowledge bases and the use of fuzzy inference using the Mamdani algorithm. Fuzzy numbers in triangular form with triangular membership functions are used to represent the linguistic assessments of experts, and the CoA (Center of Area) method is used to defuzzify the obtained values. The study proposes to implement the model in the form of a framework in Excel. The model consists of units for entering information received from experts in the form of linguistic assessments of the factors importance of each of five forces of M. Porter’s model and forces themselves and linguistic assessments of the influence level of each of these factors, transformation unit of these estimates into fuzzy numbers, written in a triangular form with the corresponding membership functions, aggregation blocks of fuzzy estimates, a unit for determining the weighting of the factors of each of the 5 forces and the importance of each of these forces, a unit for calculating fuzzy values of the influence level of each of the 5 forces of the M. Porter’s model and the general level of competition in the industry, unit for the implementation of fuzzy inference according to the Mamdani algorithm, defuzzification unit of these values. The framework allows simulation, depending on the modification of the list of certain factors of the external environment and the correction of experts’ considerations. Fuzzy bar diagrams and a fuzzy pentagon are constructed, which reflect the level of competition in the industry for each of M. Porter’s model, and allow calculating the fuzzy value of the integral level based on a weighted assessment of the impact of each of these forces with the subsequent defuzzification of this value.

Keywords: Fuzzy Sets, Fuzzy Multicriteria Analysis, Linguistic Variables, Term-Set, Porter’s Force Assessment Model, Fuzzy Saw-Method, Logical-Linguistic Model, Fuzzy Knowledge Bases, Mamdani Fuzzy Inference System

JEL classification: C51, C63, D04

Open Access Article SciPap-1282

by Sinh Duc Hoang, Zuzana Tučková

Abstract: This research was conducted to check the impact of factors related to sensory marketing on street food to the return of international visitors in Ho Chi Minh city (HCMC). The study applied the PLS-SEM model to estimate with five scales groups of factors related to sensory marketing (such as visual, tactile, auditory, olfactory, and flavorful factors). And using the surveyed and cleaned up data with reliable information of 250 international tourists in HCMC in 2020. The research results found that all factors in the proposed research model have a positive statistically significant effect on visitor satisfaction on street food. And then, street food satisfaction continues having a positive effect on the return to HCMC. The degree of influence of Sensory marketing factors on street food to Visitor satisfaction in descending order is as follows: (1) The smell of street food; (2) the sound of the food and drink shops, street vendors; (3) taste of street food; (4) sight of street food; (5) Tourist’s touch to the equipment and street vendors. This paper contributes to provide more empirical evidence to fill the current research gaps regarding the impact of sensory marketing on revisit decisions in Vietnam. Moreover, this really usefull for HCMC tourism to build a marketing strategy, design marketing programs on cuisine suited to promote, attract more international tourists to return in the future.

Keywords: Sensory Marketing, Visitor Satisfaction, Revisit Decisions, Return Decision, International Tourists, Street Food, Ho Chi Minh City.

JEL classification: M31, Z32

Open Access Article SciPap-1289

by Vojtěch Sadil, Juraj Sipko

Abstract: This article focuses on the transition of the international monetary system to a multipolar structure. The international monetary system continuously evolves, reflecting developments in the world economy. The main problem of the current international monetary system is its dependence on one key currency which still remains the US dollar. The authors of this study address the issue of a transition towards a multipolar system by examining currency concentration. The primary objective of this work is to establish whether or not the current international monetary system shows signs of transitioning towards multipolarity. To achieve this, the authors have used tools measuring the level of market concentration. The change of polarity of the international monetary system is analysed with concentration ratios and the Herfindahl-Hirshmann index. The theoretical part focuses on definitions of key terms essential for this study, such as international monetary system, currency polarity, global currency, and currency concentration. For the practical part, data were sourced from the databases of global institutions, namely the International Monetary Fund (IMF), Bank for International Settlements (BIS), Society for Worldwide Interbank Financial Telecommunications (SWIFT) and the European Central Bank (ECB). This part focuses on a period of time between 2001 and 2019, and the results indicate that the current international monetary system shows signs of transitioning towards a multipolar structure. The level of currency concentration of the key reserve currencies dropped slightly, although not enough to cause a qualitative change of the current international monetary system. This study may serve as a base for future research on this topic.

Keywords: International Monetary System, Currency Concentration, Multipolarity, Global Currency, Exchange Rates.

JEL classification: F01, F33

Open Access Article SciPap-1320

by Daniel Klimovsky, Juraj Nemec, Geert Bouckaert

Abstract: This special issue was envisaged to cover diverse scholarly contributions of an empirical nature that focus on various questions linked to the COVID-19 crisis in the Czech Republic and Slovakia. The choice of countries was intentional; after all, the Czech Republic and Slovakia both experienced controversial developments during 2020. The COVID-19 pandemic found them unprepared and inexperienced in the field of serious epidemics yet also saw them gain international recognition for the very positive results gained from their initial responses. The second half of 2020 provided a very different story. Both countries were hard hit by the epidemics immediately after the summer, and the situation worsened month by month. These negative developments escalated at the end of 2020 and in early 2021 when the number of new cases rapidly increased and the total number of patients at risk of dying began to exceed the capacities of public hospitals. This summary offers an overview of the research by authors included in this special issue. It compares their findings with the results of others in order to suggest a set of policy implications that are based on empirical analyses. There is also an attempt to estimate several avenues of further multi-disciplinary research focusing on the COVID-19 pandemic and relevant policy responses. Within this context, this special issue is useful for both researchers and policy makers.

Keywords: Czech Republic, Slovakia, Covid-19, Policy Making, Policy Response

JEL classification: E61, H12, H72, H75

Open Access Article SciPap-1272

by Oleh Pasko, Fuli Chen, Yarmila Tkal, Mykola Hordiyenko, Oleksandr Nakisko, Inna Horkovenko

Abstract: The purpose of this paper is to examine the effect of the adoption of converged to IFRS national standards on accounting conservatism (AC) and to investigate the effect of corporate governance (CG) attributes (government ownership, management ownership, concentration of ownership, board size, board independence, CEO duality) on АС in China. The large sample of A-share Chinese listed companies, comprising 26,004 firm-year observations form 2925 companies spanning from 2003 to 2019 collected from CSMAR database and analysed using multivariate regression techniques. The study provides empirical evidence testifying to the decrease in AC level after converged to IFRS national standards in China became mandatory. The findings indicate that government ownership, management ownership, concentration of ownership and CEO duality are all negatively associated with AC. By contrast, board size, board independence, has no significant relationship with AC in Chinese institutional settings. Whereas prior studies investigate the IFRS adoption per se, our study examines how national standards converged to IFRS affect AC indicating that converged national standards produce the analogous effect expected from adoption of the genuine IFRS. Moreover, it means that accounting conservatism is inherent also in the standards as opposed to the conceptual framework. Next, our study is also instrumental in identifying the relationship between AC and CG attributes in an underexplored jurisdiction with a significant impact on the world economy - China. These findings can be utilized and be heeded to by managers in the design of companies’ supreme governing body, as well as regulators while proposing legislation/regulations concerning the composition of the board of directors. The results subject to the limitation for a limited range of CG variables and measurement of accounting conservatism applied. Next, the endogeneity problem is not solved as yet, therefore which direction the causality runs from CG to AC or from AC to CG is disputable.

Keywords: IFRS, China, Accounting Standards, Cg, Accounting Conservatism

JEL classification: G34, M14, M41

Open Access Article SciPap-1283

by Hüseyin Öcal , Anton Abdulbasah Kamil

Abstract: This study aims to provide empirical insights into stocks' performance in the BIST 100 index of Borsa Istanbul and KOMPAS 100 index of the Indonesian Stock Exchange. The risk-free rates and top 100 stocks closing price data of Borsa Istanbul (BIST) and Indonesia Stock Exchange (IDX) have been examined. The Daily data between July 1, 2015, and June 30, 2020 are used. The Sharpe ratio and normal distribution tests are employed in the analysis. The study results have revealed that the portfolio's return consisting of positive low-five and top-five average Sharpe ratio stocks generally has beaten the Indices under review except that a positive low-five average Sharpe ratio stocks portfolio built from KOMPAS 100 constituents during bearish market. Besides, the average Sharpe ratio of each stock in the positive low-five and top-five portfolio has been greater than the average Sharpe ratio of the Indices. Moreover, the portfolio's return with the positive top-five average ratio Sharpe ratio stocks has outperformed the return of the portfolio with positive low-five average Sharpe ratio stocks. We recommend that the Sharpe ratio is computed for every six months or three months for BIST 100 and KOMPAS 100 stocks since the return data follow a more normal distribution in shorter periods.

Keywords: Portfolio Investment, Sharpe Ratio, Risk And Reward, Normal Distribution, Kompas 100, Bist 100

JEL classification: B26

Open Access Article SciPap-1210

by Diana Šaparnienė, Iveta Reinholde, Sandra Rinkevičienė

Abstract: The article analyses the relationship between citizens’ trust in local government institutions and participation in local governance. The research results have revealed that citizens’ trust in local government is still low and participation lacks activeness. Civic participation is more active than political participation. According to the research results, the main reasons of absence of participation in local governance are lack of information and knowledge about public participation, lack of information about participation opportunities, lack of communication and response to expressed opinion and suggestions. The results of quantitative research showed that participation and trust dimensions are related. Absence of clear communication and response to citizens expressed opinion and suggestions causes distrust and lower participation. However, the research revealed the weak relationship between the trust in local government and participation in local governance. This fact requires further research.

Keywords: Local Government, Citizens’ Trust, Citizens’ Political And Civic Participation, Local Governance, Democracy

JEL classification: H83