Project description:
The objective of this research was to examine and apply experiences from fiscal theory and practice on the Croatian fiscal system and transitional policy. The expected result is to make a proposal for establishing an active Croatian fiscal system and policy that would be compatible with developed market economies. Such a research result is closely connected to stimulating economic growth as one of the thematic priorities of NZIP. Namely, fiscal policy, along with monetary policy, is one of the key economic policies that contribute to the stabilization and growth of the economy. For this reason, the significance of this research extends beyond the borders of the fiscal sector and has an effect on general economic aspects of the Croatian economy but also on its social and political aspects.
Main segments of the research:
- Public revenues. Main types of taxes and their effect on the economy. Building an optimal tax system, i.e. one that causes the least distortion to relative prices and also meets the equity criterion. Relationship between tax structures and growth in specific countries.
- Public expenditures. Defining public expenditures, i.e. which sectors need to be financed by the state and which can take place in the private sector. Financing education, science, culture, healthcare, social protection, pension and disability insurance. Economic infrastructure and public enterprises.
- Fiscal deficit and its financing. Fiscal deficit and inflation. Fiscal deficit and external borrowing. Fiscal deficit and economic growth (pushing out private investment). Stabilising (short-term) role of deficits and its long-term effect on overall economic growth
- Central state budget and local government budgets. Database keeping for all budget levels.
- Special aspects of fiscal policy. Fiscal policy and ecology, fiscal policy and foreign investment, fiscal policy and small and medium enterprises, fiscal policy and liberated territories, fiscal policy and island development.