engleski

What determines fiscal success at local level? The case of Croatian local government units

The paper investigates the relationship between Croatian local government budget outturns’ (i.e. fiscal success) and the chosen set of economic and non-economic determinants. Determinants are divided into four groups: (i) economic (the share of tax revenues in total revenues, debt level, the share of grants in total /operating/ revenues, income per capita, employment level, regional competitiveness index) (ii) political (political affiliation of the mayor, “matching” of the political affiliation at the local and central government level), (iii) transparency (citizens budget) and (iv) socio-historical (war affected areas, percentage of highly-educated people, net migration between counties). Three main goals are set in the paper. The first one is to determine whether there are differences with respect to fiscal success at the different level of administrative governance (counties, cities and municipalities) in Croatia. Consequently, the second goal is to determine whether those differences stem from economic or non-economic origin and third, whether those differences are robust, meaning do they persists on all three administrative levels. If the differences are not persistent the question is in what determinants (economic or non-economic) do they diverge. The analysis is conducted on the entire population, i.e. 428 municipalities, 127 cities, 20 counties plus the City of Zagreb during 2012–2015. We apply panel data analysis in order to study whether there are differences and what are the signs in front of the independent variables.

local government budget ; Croatia ; panel data analysis ; budget transparency ; political economy

This work has been fully supported by Croatian Science Foundation under the project (IP-2014-09- 3008).