engleski

Decentralization of the Croatian Roads sector. Should Cities Take Over the Roads?

The paper deals with decentralization of the roads sector in the Republic of Croatia which is one of the priority issues for representatives of Croatian local public sector. The reason for considering changes in the system of administering and financing public roads is not only in the efforts to expand the role of local government in delivering public goods and services. There are also numerous problems that characterize present road system in Croatia such as inappropriate financing mechanism, unbalanced maintenance and construction of roads within particular counties, imbalance in financing certain types of public roads, inappropriate financing of unclassified roads, lack of an appropriate information management system and other. An important feature of the present management of the road sector in Croatia is the centralized structure of management. Local governments are responsible only for maintenance and construction of unclassified roads. There is also a problem of coordination between agencies that manage classified and unclassified roads within the teritory of cities. This leads to serious problems in spatial planning and traffic management, resulting in unbalanced maintenance. Therefore, representatives of large and middle-sized cities argue that classified roads on their territories should be transferred under ownership and management of local authorities. Financial sources for these functional tasks could come from share in motor vehicles registration fees and fuel tax. First part of the paper shows theoretical justifications for more decentralized management in the roads sector. Effects of increased decentralization are in greater satisfaction of local road users both through better quality of road maintenance and cost reduction. Second part of the paper describes features of the road sector management in Croatia. On the bases of empirical evidence numerous sources of inefficiencies are determined. Analysis of fiscal and administrative aspects of roads sector management decentralization is important for answering the question on necessity of more decentralized provision. Paper shows that there are significant inefficiencies in the roads sector that have to be resolved regardless of the decentralization process. In terms of decentralization, there are possible efficiency gains. However, decentralization should not go beyond the extent of the large cities. High fragmentation in the roads sector management would jeopardize economies of scale and would lead to increase of provision costs. Additional financial resources for the new functions of large cities can be obtained through the redistribution within the roads sector. Administrative constraints do not impose significant obstacle for further decentralization.

decentralization; local governments; roads; Croatia

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