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Croatia: Instruments of Fiscal Equalisation

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Abstract

The aim of this chapter is to present the administrative-territorial structure of Croatia and describe the process of fiscal decentralisation. Particular attention is given to the functions devolved over time and revenue sources for financing of decentralised functions and an overview of local government units (LGUs) borrowing, debt and contingent liabilities. The emphasis of the chapter is on LGUs’ capital investments and financing from European Union (EU) funds, as Croatian experience in the EU might be of interest also for other countries within the region. The phases of fiscal decentralisation in Croatia follow the evolution of the fiscal equalisation and general LGUs’ financing system, constantly exposed to political influence.

Keywords

  • Fiscal decentralisation
  • Equalisation
  • EU
  • Croatia

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Notes

  1. 1.

    Law on the City of Zagreb, Official Gazette, No. 62/2001, 125/2008, 36/2009.

  2. 2.

    Law on the Financing of Local and Regional Self-Government Units, Official Gazette, No. 117/1993, 33/2000, 73/2000, 59/2001, 107/2001, 117/2001, 150/2002, 147/2003, 132/2006, 26/2007—the Decision of the Croatian Constitutional Court, 73/2008, 25/2012 and 147/2014.

  3. 3.

    Budget Act, Official Gazette, No. 87/2008, 136/2012.

  4. 4.

    To help selection of subnational government investment projects, on the basis of open competition and technical criteria (e.g. cost-benefit, social rate of return).

  5. 5.

    Constitution of the Republic of Croatia, Official Gazette, No. 56/90, 135/97, 8/98, 113/00, 124/00, 28/01, 41/01, 55/01, 76/10, 85/10, 05/14.

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Bajo, A., Primorac, M. (2018). Croatia: Instruments of Fiscal Equalisation. In: Bartlett, W., Kmezić, S., Đulić, K. (eds) Fiscal Decentralisation, Local Government and Policy Reversals in Southeastern Europe. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-96092-0_3

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  • DOI: https://doi.org/10.1007/978-3-319-96092-0_3

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