Tackling Bureaucracy Growth in Time of Crisis: The Case of Czech Statutory Cities

With an economic crisis that arrived to the Czech Republic beginning of 2009, the politicians on central and local level were pushed for budget reforms to cut overall spending. Despite central government pledge, the reform of public service was not adequately tackled and the total number of bureaucrats employed remained unchanged between years 2008-2014. But that was not the case of local government’s authorities of which some were able to appropriately accommodate to the time of economic crisis and take respective measures in response. However, we observe a great variation in bureaucracy growth change (dependent variable measured as percentage change of total numbers of officials) as some cities have managed their apparatus to shrink and some not. Therefore the main aim of the paper is to explain the variation in “bureaucracy” change between years 2009-2012 in time of economic crisis. Preliminary results of regression analysis of twenty-five biggest Czech cities shows that large proportion of variation explained is due to the government alternation. With unchanged council after elections, the city authority office structure was still and new employees has been hired, contrary, when council completely changed the newly elected councilors more eagerly restructured city authority and conducted staff redundancies. Main hypothesis is straightforward: with a government alternation, the new local government should be less politically connected with municipal office and thus be more responsive to bureaucratic reform. There might be other explanations of contraction and many factors might play role as well. Therefore control variables (average salaries and operational costs) and alternative hypothesis are also taken into account: (AH1) Highly indebted municipalities will be pushed for stronger austerity measures. (AH2) The cities in wealthy regions do not have incentives to pursue reforms due to the higher tax revenues. (AH3) Right wing mayor will push for stronger austerity measures.