ROLE AND RESPONSIBILITIES OF LOCAL MANAGEMENT FOR GOVERNING AND DISPOSAL OF FUNDS FOR FINANCING OF DECENTRALIZED FUNCTIONS

Ivan Lukic (), Branka Martic () and Davor Vlaovic ()
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Ivan Lukic: Brod- Posavina County, Republic of Croatia
Branka Martic: Brod- Posavina County, Republic of Croatia
Davor Vlaovic: Brod- Posavina County, Republic of Croatia

Interdisciplinary Management Research, 2014, vol. 10, 531-543

Abstract: Decentralisation and devolution in conducting of public affairs from higher to lower level of government was implemented in Croatia in 2001 in elementary and secondary education, health care, social welfare and firefighting. It was not true decentralization, with the expansion of the local authority, responsibility and financial capabilities, rather mere administrative decentralization, without spreading the autonomy of the local community. Legal decentralization was not accompanied by fiscal decentralization, which involves financial aspects of transfer of public affairs to regional and local government. The degree of fiscal decentralization of certain government is estimated by the proportion of local government involvement in total revenues and expenditures of the general government and the local government share in GDP. None of these indicators in Croatia are reaching the EU average. Financing of decentralized functions from income tax in the past five years indicates enormous problems in financing due to total dependence of local communities on the central government, especially in the area of primary and secondary education. In such circumstances, the local management, responsible for the efficient and economical operation of the management and disposal of funds for decentralization, is facing organizational challenges.

Keywords: decentralization; fiscal decentralization; decentralized functions; local management (search for similar items in EconPapers)
JEL-codes: H72 (search for similar items in EconPapers)
Date: 2014
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