engleski

Fiscal Decentralization: Raising Issue In Croatia

Development of fiscal relations between central and local government is a very complex issue. Current degree of fiscal decentralization in Croatia is not sufficient to achieve the efficiency of local self-government. The process of fiscal decentralization cannot be considered through the fiscal system alone. The optimal decentralization requires the reform of other non-fiscal factors of political and economic system. The issue of fiscal decentralization is once again raised due to the accession of Croatia to the European Union. The basic thesis of the paper is that Croatia is less fiscal decentralized than the rest of in paper observed European countries which is important when it is known that the process of fiscal decentralization is a necessary precondition for economic growth and development. The paper will discuss the current (reached) degree of fiscal decentralization and present the comparative analysis of local public finances in certain transition countries and EU member states. Furthermore, it will address the specific problems that inhibit the process of fiscal decentralization and the main characteristics of the local public sector in Croatia. Induction of gained results will present several suggestions for the improvement of fiscal decentralization process and current fiscal system in Croatia.

fiscal decentralization; fiscal capacity; fiscal equalization; Croatia

ISSN: 1553-1392