Fiscal Federalism And Borrowing Opportunities Of Local Communities
Fiscal Federalism And Borrowing Opportunities Of Local Communities

Summary/Abstract: The principles of the European Charter of Local Self-Government were accepted and incorporated in the legislation of Bosnia and Herzegovina. Fiscal federalism is classified in the area of public finance theory that studies the system of collection and distribution of resources in the public sector with two or more levels of government. In practice, in the public sector we have an increasing presence of a trend of decentralization of powers and jurisdictions of the state through: the transfer of political power and the transfer of influence from higher to lower levels of government. Decentralization achieves some of the following goals: reducing the share of public sector in the overall economy, mobilization of public revenues while reducing the cost of public services, harmonization of responsibilities for local public expenditures and the available financial resources, boosting of own revenues of local authorities, promotion of cooperation between different levels of fiscal government in provision of public services.

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