Simulation of Socio-Economic Processes on the Municipal Level

Abstract

The monograph elaborates on strategic management in selected priorities of municipal development in which system dynamics is being applied. The method enables quantitative capturing of relations between individual development actors, subjects or processes themselves that may occur during development of a municipality. It is then possible to explore causalities between individual elements of the whole municipal system. The main benefit of the system dynamics, however, is not only capturing of these simple causalities, but also understanding the feedbacks between the system elements. This means that one single element through its behaviour affects another one within the same system. But response of this second element has a loop influence on the initial one. System dynamics introduces a dynamic view, in this case applied on the topic of municipal development. The approach is applicable also in modern management systems. In that case it would be an application of the Balanced Scorecard method which is based on system dynamics principles described above. In addition this method recommends capturing the development through both financial and also non-financial indicators. This generates further possibilities of application of quantitative approach of system dynamics to processes of rather a qualitative character.