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Budget Outcomes and Political Accountability: The case of Eastern Croatia region

Regional disparities have been recognised as one of the obstacles to the conduct of a sound economic policy. Scholars of political economy and public sector economics emphasise the role of public finance, i.e. budget outcomes and collective action overall, in that process. The first goal of this article is to investigate the differences between Eastern Croatia and the remaining five regions (Northern Croatia, Central Croatia, Dalmatia, North-Adriatic Croatia and the City of Zagreb) regarding their budget outcomes and political accountability. Budget outcomes will be expressed by local governments’ share of surplus/deficit in total revenues. Political accountability will be proxied by their online local budget transparency index (OLBI), which has been annually measured for all Croatian counties, cities and municipalities. The second goal is empirically to determine possible clusters within local governments in Eastern Croatia. Cluster analysis is conducted on a sample of 127 Eastern Croatian local governments over 2014-2017 period. The results show that Eastern Croatia exhibits low budget outcomes and low political accountability levels, with four clusters emerging - from lowest to highest performers regarding budget outcomes and political accountability levels. The paper is expected to contribute to the literature by relating the importance of local government budget transparency – a prerequisite for citizens’ participation in budgetary processes – for budget outcomes in Croatia.

Budget outcomes, Online budget transparency, Political economy, Croatian local governments, Cluster analysis

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