THE EFFECTS OF BUDGET TRANSPARENCY ON THE BUDGET BALANCES AND EXPENDITURES OF CROATIAN LOCAL GOVERNMENTS

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Mihaela Bronić https://orcid.org/0000-0002-0863-2040 Branko Stanić https://orcid.org/0000-0002-8746-6764 Simona Prijaković https://orcid.org/0000-0001-7835-582X

Abstract

The purpose of this paper is to find out whether budget transparency (BT) allows for better control over public finances, especially in pre-election periods. Thus we investigate the impact of BT, i.e., the digital availability of five key budget documents, on the budget balances and expenditures of all 556 Croatian local governments (LGs) over the 2014-2019 period. The dynamic panel data analysis with several control variables shows that higher BT tends to increase expenditures and the probability of achieving deficits, especially in poorer LGs. Improved BT increases electorates’ confidence, making public goods and services more interesting to voters, ultimately increasing public expenditures. However, we found that BT limits political budget cycles (PBCs), i.e., ‘opportunistic’ expenditures and deficits in the pre-election period.

Article Details

How to Cite
Bronić, M., Stanić, B., & Prijaković, S. (2022). THE EFFECTS OF BUDGET TRANSPARENCY ON THE BUDGET BALANCES AND EXPENDITURES OF CROATIAN LOCAL GOVERNMENTS. The South East European Journal of Economics and Business, 17(1), 111-124. Retrieved from http://journal.efsa.unsa.ba/index.php/see/article/view/1832
Section
Scientific and Professional papers: Economics and Business
Author Biographies

Mihaela Bronić, Institute of Public Finance, Zagreb, Croatia

Mihaela Bronić, PhD
Scientific Advisor
Institute of Public Finance, Zagreb Croatia
E-mail: mihaela.bronic@ijf.hr ORCID: 0000-0002-0863-2040

Branko Stanić, Institute of Public Finance, Zagreb, Croatia

Branko Stanić, PhD (corresponding author) Research Associate
Institute of Public Finance, Zagreb
Address: Smičiklasova 21

10000 Zagreb, Croatia
E-mail: branko.stanic@ijf.hr ORCID: 0000-0002-8746-6764

Simona Prijaković, Institute of Public Finance, Zagreb, Croatia

Simona Prijaković, mag. math. Research Assistant
Institute of Public Finance, Zagreb Croatia

E-mail: simona.prijakovic@ijf.hr ORCID: 0000-0001-7835-582X