| Tartalmi leírás: |
In the last 30 years, a unique and complex constitutional organization of Bosnia and Herzegovina (BiH) has affected the position of local government units (LGUs) in terms of both local revenues and expenditures. In this article, we examine the revenue allocation and revenue sharing mechanism in one BiH’s entity, Federation of BiH (FBiH) and discuss the position of LGUs within FBiH. Due to a low fiscal autonomy of LGUs, our results indicate prolonged tax revenue volatility of LGUs in times of crises in comparison to other central and sub-central levels of government in FBiH. LGUs revenues in FBiH in times of recent COVID-19 and inflationary crises indicate LGUs inability to tackle the external shocks effectively. This is reflected in a sharp fall of tax and non-tax revenues followed by a slower increase in revenues. Results illustrate an important policy implication related to giving greater tax autonomy of LGUs in FBiH.
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