Theoretical Aspects of Sub-National Governance Structure and Competence Establishment of Territorial Municipalities
The objective of this article is to analyze the criteria and conditions of division of competence betweenterritorial municipalities and other subjects of public governance as well as theoretical aspects of competenceestablishment of territorial municipalities and sub-national governance structure.The first part of the article examines the criteria and terms of division of competence between territorialmunicipalities and other subjects of public governance. The second part analyzes theoretical aspectspertaining to size and competence establishment of territorial municipalities. The third part deals with thepeculiarities of establishing the number of sub-national governance levels and competence of territorialmunicipalities. After analyzing the scientific literature it can be stated that when shaping and improving the publicgovernance system of a specific country, it is beneficial to parallely assess and combine the competencecomponents of public governance structure and governance subjects, which are inter-related through tiesof mutual dependence.Although guidelines are offered in economic theories for structurization of sub-national governanceand establishment of the competence of territorial municipalities, the structure of sub-national governanceand competence of territorial municipalities varies significantly from one country to another, subject to avariety of situational variables. A conclusion was therefore made that it is practically impossible to establishan optimal size of territorial municipalities and the number of levels of sub-national governance dueto the complicated assessment of diverse and changing conditions for production and organization of publicgoods, the cost structure of public goods produced and organized by territorial municipalities,qualitative aspects and the scope of externality.