Work

The Effects of Budget Transparency on the Budget Balances and Expenditures of Croatian Local Governments

Year: 2022

Type: article

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.

Source: South East European Journal of Economics and Business

DOI: 10.2478/jeb-2022-0008

Authors: Mihaela Bronić, Branko Stanić, Simona Prijaković

Institution: Institute of Public Finance

Language: English

Topic: Fiscal Policies and Political Economy

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: diamond

Funder: Hrvatska Zaklada za Znanost