International finance

Croatia: Regaining Fiscal Sustainability and Enhancing Effectiveness - A Public Expenditure and Institutional Review

The World Bank and the Government of Croatia are pleased to present their draft document "Croatia: Regaining Fiscal Sustainability and Enhancing Effectiveness".

This study is similar to the World Bank flagship public expenditure reviews that Bank carries out in most of the borrower countries. The report analyzes expenditures and institutional developments in the public sector, proposing a reform agenda aimed at regaining sustainability by reducing public spending while increasing its effectiveness.

It starts with an overview of macroeconomic setting and fiscal picture over the last decade.

The second part analyses the composition of expenditures, examines in detail key issues and provides recommendations in the following sectors:

  • (i) the public sector wage bill;
  • (ii) health;
  • (iii) pensions;
  • (iv) education;
  • (v) targeted cash-transfer programs;
  • (vi) transport; and
  • (vii) defense.

In addition, in the third part of the Report, the emergence of arrears, the lack of control on contingent liabilities and the need for strategic choices in the expenditure rationalization effort all point to the importance of reforming Government's budgetary management policies.

The study was based on the findings of a mission that visited Croatia and later consultations and discussions with Croatian officials.

A joint launch of the study will be a part of an open process that has started with a posting of the Croatian and English version of the draft study on the World Bank Zagreb Office web site ias well on the web site of the Croatian Ministry of Finance.

Please send your comments to the following e-mail address: