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

The Effects of Budget Transparency on the Budget Balances and Expenditures of Croatian Local... AbstractThe 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png South East European Journal of Economics and Business de Gruyter

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

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

South East European Journal of Economics and Business , Volume 17 (1): 14 – Jun 1, 2022

Abstract

AbstractThe 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.

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Publisher
de Gruyter
Copyright
© 2022 Mihaela Bronić et al., published by Sciendo
ISSN
2233-1999
eISSN
2233-1999
DOI
10.2478/jeb-2022-0008
Publisher site
See Article on Publisher Site

Abstract

AbstractThe 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.

Journal

South East European Journal of Economics and Businessde Gruyter

Published: Jun 1, 2022

Keywords: Budget transparency; local governments; budget balance; expenditures; Croatia; H72; H76; H79

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