The Impact of Budget Transparency on Budget Credibility: Evidence From Croatian Cities

Guillamón María-Dolores (), Ríos Ana-María () and Prijaković Simona ()
Additional contact information
Guillamón María-Dolores: María-Dolores Guillamón, PhD, Associate Professor, Faculty of Economics and Business, Department of Financial Economy and Accounting, University of Murcia, Spain
Ríos Ana-María: Ana-María Ríos, PhD, Associate Professor, Faculty of Economics and Business, Department of Public Finance, University of Murcia, Spain
Prijaković Simona: Simona Prijaković, PhD, Research Associate, Institute of Public Finance, Smičiklasova 21, 10000 Zagreb, Croatia

South East European Journal of Economics and Business, 2024, vol. 19, issue 2, 119-135

Abstract: This paper examines how budget transparency affects budget credibility, i.e., how it affects budget current revenue/expenditure deviations. Specifically, the first objective is to describe how budget transparency affects budget credibility or accuracy of the enacted budget at the local level. The second is to examine if and in which direction budget deviations are systematically biased. The third is to link the accuracy of enacted budgets with political budget cycles’ literature. Budget transparency is measured by the number of published key budget documents on the City’s official websites. Budget credibility is measured by the difference between the planned amount minus the actual amount divided by the actual amount. Our sample comprises balanced panel data for 120 Croatian cities during the period 2016-2021 and system GMM method was used. The findings indicate that cities with greater budget transparency typically underestimate their revenues and overestimate their expenditures. Less transparent cities, on the other hand, frequently overestimate their revenues and underestimate their expenditures, yet ultimately spend more than intended.

Keywords: budget transparency; budget credibility; local governments; forecasting; enacted budget; year-end report (search for similar items in EconPapers)
JEL-codes: H71 H72 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/jeb-2024-0019 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:seejeb:v:19:y:2024:i:2:p:119-135:n:1008

DOI: 10.2478/jeb-2024-0019

Access Statistics for this article

South East European Journal of Economics and Business is currently edited by Adnan Efendic, Vesna Babić-Hodović and Aziz Šunje

More articles in South East European Journal of Economics and Business from Sciendo
Bibliographic data for series maintained by Peter Golla ().