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<p>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.</p>
</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.

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

South East European Journal of Economics and Business

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

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....

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

Published Online: Jun 23, 2022

Page range: 111 - 124

DOI: https://doi.org/10.2478/jeb-2022-0008

Keywords
Budget transparency, local governments, budget balance, expenditures, Croatia

© 2022 Mihaela Bronić et al., published by Sciendo

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

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

Published Online: Jun 23, 2022

Page range: 111 - 124

DOI: https://doi.org/10.2478/jeb-2022-0008

KeywordsBudget transparency, local governments, budget balance, expenditures, Croatia

© 2022 Mihaela Bronić et al., published by Sciendo

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

Keywords
Budget transparency, local governments, budget balance, expenditures, Croatia