The Financial Implications of Circular Economy Transition for Municipal Waste Management: An Empirical Analysis in Slovakia

The transition to a circular economy (CE) presents significant financial challenges and opportunities for public waste management and fiscal governance in Slovakia. This study examines the financial implications of the circular economy transition for public expenditure related to municipal waste management in Slovakia using national-level aggregated data. Unlike previous studies that primarily focus on environmental performance, this research develops an integrated empirical framework combining environmental, financial, and governance indicators to evaluate the fiscal implications of the CE transition. A multivariate regression model was estimated using national environmental statistics, national financial data, and waste management indicators. The model demonstrated good explanatory performance (adjusted R2 = 0.842; F = 15.87, p < 0.001). The results indicate that resource recovery, environmental investment, and CE policy implementation are significantly associated with municipal waste management expenditure, while the COVID-19 period was associated with higher expenditure. The findings suggest that although the CE transition requires substantial initial investment, effective resource recovery and appropriate public financial governance may contribute to the long-term fiscal sustainability of municipal waste management systems. The study provides evidence that may support policymakers and public authorities in developing evidence-based budgeting, more effective investment planning, and financially sustainable implementation of circular economy policies in Slovakia.