Abstract The role of local government units and the level of fiscal autonomy are the main drivers of local development activities in countries. The aim of this paper is to measure the level of fiscal autonomy of large cities that have been identified as conductors of local development activities in three Southeastern European (SEE) countries, namely Croatia, Serbia and Bosnia and Herzegovina, as well as to compare the level of fiscal autonomy between large cities and other remaining local units in the respective countries. The results of the research measured by the index of fiscal autonomy and compared with the index of fiscal autonomy of all remaining local government units in each of these countries indicate limited fiscal autonomy. Th is research provides new scientific evidence and fills the gap regarding the level of fiscal autonomy of large cities to improve and increase their budget capacity.

Abstract Background: In recent years’ income inequality has been an economic issue. The primary instrument for redistributing income is personal income tax. However, based on economic theory income inequality concerns indicators such as wages, transfer payments, taxes, social security contributions, and geographical mobility. Objectives: The objective of this paper is to examine the impact of certain labor market indicators on personal income taxation in Federation of Bosnia and Herzegovina (FB&H). Methods/Approach: Since personal income taxation consists of a very broad definition and for the purpose of this research only, income from dependent (employment) activity is observed. The econometric analysis is conducted using error correction modeling, as well as forecast errors variance decomposition. Results: The error correction model is estimated, and the cointegrating equation indicates that monthly wage and number of employees statistically significantly positively affect personal income taxes in FB&H in the long-run. After two years, the selected labor market indicators explain a considerable part of forecasting error variance of personal income tax revenues. Conclusions: The implementation of reforms in the labor market and tax policies of the FB&H is suggested. In order to achieve necessary reforms, efficient governance and general stable political environment are required.

Purpose –Regional and local governments have recognized the importance of tourism for the regional economy, especially when it comes to budget revenues and expenditures. Efficiency is crucial for making sure beneficiaries receive the best-possible services in a given tourist destination. Therefore, the aim of this paper is to analyze the efficiency of regional government expenditures in 20 Croatian counties in the 2011-2016 period. Methodology – A data envelopment analysis (DEA) was applied to analyze the efficiency of regional government expenditures in smart tourist destinations. This is a non-parametric linear programming method for assessing the efficiency and productivity of decision-making units. For the purpose of this empirical investigation, 20 Croatian counties were observed, along with their average budget expenditures, in the 2011-2016 period. Findings – The results of the empirical analysis showed that there are an equal number of coastal and inland Croatian counties when it comes to regional government expenditure efficiency. This is interesting to mention, since more international tourists are gravitating towards smart tourist destinations located on the Croatian coastline, especially in the summer season. The results may provide regional and local governments with more information on the concept of “smartness” when it comes to tourist destinations, and their potential for sustainable development and economic growth. Contribution – This paper provides an empirical analysis on the efficiency of regional government expenditures in 20 Croatian counties in the 2011-2016 period. Its theoretical contribution consists of presenting the “smartness” concept and its importance for tourist destinations.

The aim of this paper is to examine the roles of the Islamic voluntary sector in two jurisdictions –one is representing an Asian country, Malaysia, and the other is the newest Member State of European Union, Croatia. The investigation undertaken in the research is purely library-based, engaging in secondary data including written rules, guidelines and reports in both jurisdictions. The preliminary findings reveal that there are numerous voluntary efforts being carried out by numerous organizations in both jurisdictions (Malaysia and Croatia), in sectors such as public finance, education, quality of life and health. The research further found that these efforts could potentially bring huge impacts to the development and well-being of the society, in four different dimensions: social, finance, organizational, and legal. This research will contribute to the body of knowledge on voluntary sectors especially on the roles and implications of the voluntary sectors towards shared prosperity of the people and economy in Malaysia and Croatia.

The significant contribution of R&D to economic development and sustainability has been shown by various studies. Therefore, governments offer different fiscal instruments to attract R&D, especially regarding multinational entities (MNEs). One of the fiscal instruments are tax incentives for R&D. Furthermore, the EU has been working on the switch from Separate Taxation (ST) to Common Consolidated Corporate Tax Base (CCCTB) for longer than a decade, which will lead to harmonized R&D tax allowances, however without harmonizing the tax rates. Hence, this study aims at analyzing how ST and CCCTB impact the location of MNEs' R&D activities, tax burden and countries' tax revenue through a case study. The results show that, under ST, tax jurisdictions can stimulate MNEs' R&D activities by means of attractive tax allowances and lower tax rates. Especially for high-tax countries, the tax allowances represent an important tool for attracting R&D activities. However, under CCCTB, the location of R&D activities additionally depends on the Formula Apportionment (FA) factors of the tax base, where the countries cannot exert a direct influence. Hence, the reduction of tax rates remains the only tool left to Member States, which can lead to revenue loss on the whole. Furthermore, the FA of the tax base under CCCTB mitigates the impact of any dislocation of R&D to a low-tax country, which, under ST, leads to larger tax savings of MNEs and its impact on jurisdictions' tax revenue is greater.

Editorial for the Special Issue: “Advances in Statistical Modelling for Economic PolicyMaking” in Croatian Review of Economic, Business and Social Statistics