The purpose of this paper is to explore whether or not fiscal policy can stimulate the economic activity in the Federation of Bosnia and Herzegovina. For this purpose, the time-series data are collected in the period 2008-2014. The results suggest that a unit increase in revenue leads to a reduction in the gross domestic product in the long-run. Budgetary expenditures are found to stimulate gross domestic product only in initial period. However, results in the long-run are found to be negligible. Moreover, impulse-response function indicates there are many other determinants of gross domestic product in the Federation of Bosnia and Herzegovina besides budgetary expenditures. Therefore, the impact of fiscal policy on economic growth is just partial. Hence, development policy based on budgetary expenditures will lead to only small increase in economic output.

This research focuses on analyzing residents' perception and attitude toward tourism development in the Federation of Bosnia and Herzegovina (FB&H). For the purpose of this research, the existing models on residents' perception and attitudes were modified and a new theoretical model of six constructs was tested applying Confirmatory Factor Analysis (CFA). The dimensions of the model, perception of tourism management, perception of economic, social and environmental impacts, residents' satisfaction, support for further tourism development, were formed as latent variables, accompanied with a set of three or four consonant questions. The model suggests that the support for tourism development is indirectly stipulated by the perception of tourism management, and by economic, social and environmental impacts. Analyses have shown that 6 out of the 7 suggested hypotheses have been confirmed. The findings indicate that the residents of the FB&H strongly support tourism development as they perceive it brings more positive impacts, which are greater than the actual governmental investment into the sector.