Can Local Governments in Croatia Cope with more Responsibilities?

Abstract

The decentralization process started in 2001 by broadening the responsibilities of local self-government units and changing the sources of financing public functions. In spite of these steps toward decentralization, today Croatia exhibits low level of fiscal decentralization compared to EU and SEE countries. In the paper we show that large differences in fiscal capacity between local government units and their large reliance on received grants represent one of the main barriers for further decentralization process. Based on the analysis of the results of conducted interviews with representatives of local and regional units, we present recommendations for further process of decentralization.