<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Total public debt of ten cantons in the Federation of Bosnia and Herzegovina (FBiH), one of the two entities in BiH, have substantially increased in recent years. Since it is relatively small in nominal terms, this galloping trend have not attracted enough attention of decision makers. If these developments continue in the future, the public debt at cantonal level in FBiH might create serious fiscal problems and become one of central issues for policy makers. This has motivated our investigation of determinants that caused the increase in public debt over the period 2012-2018.</p><p>We apply a panel regression analysis and investigate how budget deficit, trade balance, unemployment rate, size of population and institutional changes affect public debt. We find that public debt is positively associated with budget deficit but negatively associated with trade balance, the size of population and institutional changes. These findings motivated policy recommendations presented in the paper.</p></abstract>

Total public debt of ten cantons in the Federation of Bosnia and Herzegovina (FBiH), one of the two entities in BiH, have substantially increased in recent years. Since it is relatively small in nominal terms, this galloping trend have not attracted enough attention of decision makers. If these developments continue in the future, the public debt at cantonal level in FBiH might create serious fiscal problems and become one of central issues for policy makers. This has motivated our investigation of determinants that caused the increase in public debt over the period 2012-2018.We apply a panel regression analysis and investigate how budget deficit, trade balance, unemployment rate, size of population and institutional changes affect public debt. We find that public debt is positively associated with budget deficit but negatively associated with trade balance, the size of population and institutional changes. These findings motivated policy recommendations presented in the paper.

Analysis of Public Debt at Subnational Government Levels: Evidence from Cantons in the Federation of Bosnia and Herzegovina

South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Total public debt of ten cantons in the Federation of Bosnia and Herzegovina (FBiH), one of the two entities in BiH, have substantially increased in recent...

Analysis of Public Debt at Subnational Government Levels: Evidence from Cantons in the Federation of Bosnia and Herzegovina

Published Online: Dec 31, 2020

Page range: 109 - 123

DOI: https://doi.org/10.2478/jeb-2020-0019

Keywords
public debt, Federation of Bosnia and Herzegovina, subnational governments

© 2020 Jasmin Halebić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Analysis of Public Debt at Subnational Government Levels: Evidence from Cantons in the Federation of Bosnia and Herzegovina

Published Online: Dec 31, 2020

Page range: 109 - 123

DOI: https://doi.org/10.2478/jeb-2020-0019

Keywordspublic debt, Federation of Bosnia and Herzegovina, subnational governments

© 2020 Jasmin Halebić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
public debt, Federation of Bosnia and Herzegovina, subnational governments