The awareness of the role played by knowledge in the practical activity of local governments
stimulates actions aimed at building it in a well thought-out manner. A statement can be risked
here that effects gained by the unit as expressed e.g. by budget planning effectiveness derive to an
equal degree from clerical knowledge and from sharing explicit knowledge resources. The unit‘s
potential is also constructed on the basis of tacit knowledge resources. Assuming that the office
means the people creating it, a simple relation can be found between tacit knowledge and LGU
actions‘ effectiveness. It can thus be noticed that both these spheres impact the effectiveness of the
activity of single local governments – although in a completely different manner – and in effect
also of the whole local government subsector of public finance