Original scientific paper

Role of local borrowing in Croatia

Saša Drezgić

Abstract

Local government borrowing is one of the most important instruments of financing local public investments. Although theoretical findings and practical experiences provide a proof of its efficiency, there are reasons to be cautious. It is about the possibility of local public government fiscal activity to jeopardise macroeconomic stability, especially by excessive deficit financing. Therefore, there is a need for regulative constraint. The paper deals with international experience and tries to draw some applicable conclusions for Croatian regulation of local borrowing. Local borrowing in Croatia has been seriously limited and its potentials are underutilised. Constraints were imposed primarily because of the fiscal consolidation goals. However, there is still room for the local borrowing and for exploiting its advantages. The Paper offers some proposals.

Keywords

Local borrowing; Croatia; investments; regulative framework; local debt market

Hrčak ID:

6983

URI

https://hrcak.srce.hr/6983

Publication date:

24.6.2005.

Article data in other languages: croatian

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