engleski

Financing of the Sub-National Government Investments in the Republic of Croatia

Sub-national governments in Croatia are important factor of investment activity in the country. They induce more than quarter of the amount of total investments of the public sector. However, that is not appreciated because local public sector is heavily restricted in terms of their financial support and autonomy. Croatia is one of the most centralized European countries. Such circumstances result in numerous negative effects. Due to regulative restrictions local units cannot use appropriate instruments for financing investments. That leads to inefficient financing and high costs of capital. In addition, regulation is focused on formal criteria instead of respecting the economic principles through the proper capital budgeting, planning and analysis. Paper offers some proposals.

sub-national governments; investments; fiscal consolidation; Croatia;

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