Effects of Media Coverage on Budget Transparency in Croatian Local Administrative Units

Rukavina, Ivana

doi:10.2478/ngoe-2023-0008

Abstract

This paper evaluates positive and negative media coverage of online local budget transparency (OLBT) and its impact on budget transparency in Croatian local administrative units in 2018. Using multinomial logistic regression, research confirmed a strong impact of media coverage on budget transparency. Positive media coverage of OLBT increases the probability that local administrative units will attain a higher level of transparency, while negative media coverage is accompanied by a higher likelihood of local units’ retention in the lower transparency range. The implications of these findings are clearly emphasized through a deeper understanding of the role of the media in public sector economics, precisely in the context of budget transparency. This study contributes to public sector literature by identifying the effects of positive and negative media coverage on budget transparency.

References

Aaskoven, L. (2016). Fiscal Transparency, Elections and Public Employment: Evidence from the OECD. Economics & Politics, 28(3), 317-41. DOI: https://doi.org/10.1111/ecpo.12080.
Search in Google Scholar Back to article
Ademmer, E. & Dreher, F. (2015). Constraining Political Budget Cycles: Media Strength and Fiscal Institutions in the Enlarged EU. Journal of Common Market Studies, 54(3), 508-24. DOI: https://doi.org/10.1111/jcms.12306.
Search in Google Scholar Back to article
Afonso, W. B. (2014). Fiscal Illusion in State and Local Finances: A Hindrance to Transparency. State and Local Government Review, 46(3), 219-28. DOI: https://doi.org/10.1177/0160323X145501.
Search in Google Scholar Back to article
Alcaide Muñoz, L., Rodríguez Bolívar, M. P., & López Hernández, A. M. (2017). Transparency in governments: a meta-analytic review of incentives for digital versus hard-copy public financial disclosures. The American Review of Public Administration, 47(5), 550-73. DOI: https://doi.org/10.1177/02750740166290.
Search in Google Scholar Back to article
Alt, J. E. & Lassen, D. D. (2006). Transparency, political polarization, and political budget cycles in OECD Countries. American Journal of Political Science, 50(3), 530-50. DOI: https://doi.org/10.1111/j.1540-5907.2006.00200.x.
Search in Google Scholar Back to article
Bastida, Albaladejo, F., J. (2019). Transparency and government trust. Public Sector Economics, 43(1), 15-19. DOI: https://doi.org/10.3326/pse.43.1.3.
Search in Google Scholar Back to article
Bayaga, A. (2010). Multinomial logistic regression: usage and application in risk analysis. Journal of Applied Quantitative Methods, 5(2), 288-97.
Search in Google Scholar Back to article
Borry, E. L. (2012). Exploring determinants of governmental transparency: The case of municipal websites as a tool for proactive dissemination. In E-governance and civic engagement: Factors and determinants of e-democracy, A. Manoharan and M. Holzer (Eds.), 25–47. Hershey, PA: Information Science Reference.
Search in Google Scholar Back to article
Caamaño-Alegre, J., Lago-Peñas, S., Reyes-Santias, F., & Santiago-Boubeta, A. (2013). Budget transparency in local governments: an empirical analysis. Local government studies, 39(2), 182-207. DOI: https://doi.org/10.1080/03003930.2012.693075.
Search in Google Scholar Back to article
Carlitz, R. (2013). Improving transparency and accountability in the budget process: An assessment of recent initiatives. Development Policy Review, 31 (1), 49-67. DOI: https://doi.org/10.1111/dpr.12019.
Search in Google Scholar Back to article
Chen, C. & Neshkova, M. I. (2018). The effect of fiscal transparency on corruption: A panel cross-country analysis. Public Administration, 98(1), 226-43. DOI: https://doi.org/10.1111/padm.12620.
Search in Google Scholar Back to article
Cowden, B. J., Bendickson, J. S., Bungcayao, J., & Womack, S. (2020). Unicorns and agency theory: Agreeable moral hazard? Journal of Small Business Strategy, 30(2), 17-25. DOI:
Search in Google Scholar Back to article
Croatian Bureau of Statistics (CBS) (2018). Population - Review by Counties. MS Excel tables. Zagreb: Bureau of Statistics. Croatian Regulatory Authority for Network Industries (2017). Access to the Internet, Zagreb.
Search in Google Scholar Back to article
Cuadrado-Ballesteros, B., Martinez-Ferrero, J., Frias-Aceituno, J. V., & Garcia-Sanchez, I. M. (2017). The role of media pressure in promoting transparency of local governments. Transylvanian Review of Administrative Sciences, 13(51), 20-37. DOI: http://dx.doi.org/10.24193/tras.51E.2.
Search in Google Scholar Back to article
De Araujo, J. F. F. E., & Tejedo-Romero, F. (2016). Local government transparency index: determinants of municipalities’ rankings. International Journal of Public Sector Management, 29(4), 327-47. DOI: https://doi.org/10.1108/IJPSM-11-2015-0199.
Search in Google Scholar Back to article
De Simone, E., Bonasia, M., Gaeta, G. L., & Cicatiello, L. (2019). The effect of fiscal transparency on government spending efficiency. Journal of Economic Studies, 46(7), 1365-1379. DOI: https://doi.org/10.1108/JES-03-2019-0123.
Search in Google Scholar Back to article
De Simone, E., Gaeta, G. L., & Mourão, P. R. (2017). The impact of fiscal transparency on corruption: An empirical analysis based on longitudinal data. The BE Journal of Economic Analysis & Policy, 17(4), 1-17. DOI: https://doi.org/10.1515/bejeap-2017-0021.
Search in Google Scholar Back to article
del Sol, D. A. (2013). The institutional, economic and social determinants of local government transparency. Journal of Economic Policy Reform, 16(1), 90-107. DOI: https://doi.org/10.1080/17487870.2012.759422.
Search in Google Scholar Back to article
El-Habil, A. M. (2012). An application on multinomial logistic regression model. Pakistan journal of statistics and operation research, 8(2) 271-91. DOI: https://doi.org/10.18187/pjsor.v8i2.234.
Search in Google Scholar Back to article
Erlich, A., Berliner, D., Palmer-Rubin, B., & Bagozzi, B. E. (2021). Media attention and bureaucratic responsiveness. Journal of Public Administration Research and Theory, 31(4), 687-703. DOI: https://doi.org/10.1093/jopart/muab001
Search in Google Scholar Back to article
Ferejohn, J. (1986). Incumbent performance and electoral control. Public Choice, 50(1/3), 5-25. DOI: https://doi.org/10.1007/BF00124924.
Search in Google Scholar Back to article
Gandía, J. L., & Archidona, M. C. (2008). Determinants of web site information by Spanish city councils. Online Information Review, 32(1), 35-57. DOI: https://doi.org/10.1108/14684520810865976.
Search in Google Scholar Back to article
Gandía, J. L., Marrahí, L. & Huguet, D. (2016). Digital transparency and Web 2.0 in Spanish city councils. Government Information Quarterly, 33(1), 28-39. DOI: https://doi.org/10.1016/j.giq.2015.12.004.
Search in Google Scholar Back to article
García, A. C & García-García, J. (2010). Determinants of Online Reporting of Accounting Information by Spanish Local Government Authorities. Local Government Studies, 36(5), 679-95. DOI: https://doi.org/10.1080/03003930.2010.506980.
Search in Google Scholar Back to article
Garcia-Tabuyo, M., Sáez-Martín, A., & Caba-Pérez, M. D. C. (2016). Mandatory versus voluntary disclosures: Drivers of proactive information provision by local governments in Central America. Information Development, 32(4), 1199-1215. DOI: https://doi.org/10.1177/0266666915595
Search in Google Scholar Back to article
Grimmelikhuijsen, S. (2011). Being transparent or spinning the message? An experiment into the effects of varying message content on trust in government. Information Polity, 16(1), 35-50. DOI:10.3233/IP-2011-0222
Search in Google Scholar Back to article
Grimmelikhuijsen, S. G. & Welch, E. W. (2012). Developing and testing a theoretical framework for computer-mediated transparency of local governments. Public Administration Review, 72(4), 562-71. DOI: https://doi.org/10.1111/j.1540-6210.2011.02532.x.
Search in Google Scholar Back to article
Guillamón, M. D., Bastida, F., & Benito, B. (2011). The determinants of local government’s financial transparency. Local Government Studies, 37(4), 391-406. DOI: https://doi.org/10.1080/03003930.2011.588704.
Search in Google Scholar Back to article
Heald, D. (2003). Fiscal transparency: Concepts, measurement and UK practice. Public administration, 81 (4), 723-59,
Search in Google Scholar Back to article
IMF (2007, July). Manual on Fiscal Transparency. IMF, Washington DC, Glossary. Retrieved 4/7/2022 from https://stats.oecd.org/glossary/detail.asp?ID=7294.
Search in Google Scholar Back to article
Iszardani, C. G., & Hardiningsih, P. (2021). The Effect of Regional Income, Leverage, Regional Property on Internet Financial Reporting Disclosure. Jurnal Analisis Bisnis Ekonomi, 19(1), 30-47. DOI: https://doi.org/10.31603/bisnisekonomi.v19i1.4049
Search in Google Scholar Back to article
Jarmuzek, M. (2006). Does fiscal transparency matter? The evidence from transition economies. Warsaw, Poland: Center for Social and Economic Research. Retrieved 29/6/2022 from: https://www.cerge-ei.cz/pdf/gdn/rrc/RRCV_77_paper_03.pdf
Search in Google Scholar Back to article
Laswad, F., Fisher, R. & Oyelere, P. (2005). Determinants of voluntary Internet financial reporting by local government authorities. Journal of Accounting and Public Policy, 24(2), 101-21. DOI: https://doi.org/10.1016/j.jaccpubpol.2004.12.006.
Search in Google Scholar Back to article
Lindermüller, D., Sohn, M., & Hirsch, B. (2022). Negative media reporting and its effects on performance information use in public spending. Public Management Review, 24(7), 1024-1047. DOI: https://doi.org/10.1080/14719037.2021.1882543
Search in Google Scholar Back to article
Lokalni.hr (2018, February). Grad Crikvenica objavio Proračun u malom za 2018. Retrieved from https://lokalni.vecernji.hr/gradovi/grad-crikvenica-objavio-proracun-u-malom-za-2018-7817.
Search in Google Scholar Back to article
Ma, L., & Wu, J. (2011, May). What drives fiscal transparency? Evidence from provincial governments in China. In 1st Global Conference on Transparency Research, Rutgers University-Newark. Retrieved 5/7/2022 from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1807767.
Search in Google Scholar Back to article
Martinez-Vazquez, J., & Timofeev, A. (2008). Regional-local dimension of Russia’s fiscal equalization. Journal of Comparative Economics, 36(1), 157-76. DOI: https://doi.org/10.1016/j.jce.2007.04.004.
Search in Google Scholar Back to article
Ministry of Finance (2018). Lokalna samouprava, Financijski izvještaji JLP(R)S. Lokalni proračuni. Lokalni proračuni – Arhiva. Zagreb: Ministry of Finance.
Search in Google Scholar Back to article
Ministry of Regional Development and EU Funds (2018). Access to information. Zagreb: Ministry of Regional Development and EU Funds.:
Search in Google Scholar Back to article
Montes, G. C., Bastos, J. C. A., & de Oliveira, A. J. (2019). Fiscal transparency, government effectiveness and government spending efficiency: Some international evidence based on panel data approach. Economic Modelling, 79 (June 2019), 211-25. DOI: https://doi.org/10.1016/j.econmod.2018.10.013.
Search in Google Scholar Back to article
Ott, K., Bronić, M., Petrušić, M., Stanić, B., & Prijaković, S. (2019b). Proračunska transparentnost županija, gradova i općina: studeni 2018.– ožujak 2019. Newsletter: povremeno glasilo Instituta za javne finacije, 21(117), 1-14. DOI: https://doi.org/10.3326/nlh.2019.117.
Search in Google Scholar Back to article
Ott, K., Bronic, M., Stanic, B., Klun, M., & Bencina, J. (2019a). Determinants of online local budget transparency in Croatia and Slovenia. Central European Public Administration Review, 17(2), 167-87. DOI: 10.17573/cepar.2019.2.08.
Search in Google Scholar Back to article
Pérez, C. C., Bolivar, M. P. R., & Hernández, A. M. L. (2008). e-Government process and incentives for online public financial information. Online Information Review, 32(3), 379-400. DOI: https://doi.org/10.1108/14684520810889682.
Search in Google Scholar Back to article
Piotrowski, S. J., & Van Ryzin, G. G. (2007). Citizen attitudes toward transparency in local government. The American Review of Public Administration, 37(3), 306-23. DOI: https://doi.org/10.1177/02750740062967.
Search in Google Scholar Back to article
Sedmihradská, L. & Haas, J. (2012, March). Budget transparency and fiscal performance: Do open budgets matter? Munich Personal RePEc Archieve, Retrieved 7/7/2022 from https://mpra.ub.uni-muenchen.de/42260/.
Search in Google Scholar Back to article
Shi, M. & Svensson, J. (2006). Political budget cycles: Do they differ across countries and why? Journal of Public Economics, 90(8-9), 1367-89. DOI: https://doi.org/10.1016/j.jpubeco.2005.09.009.
Search in Google Scholar Back to article
Stanić, B. (2018). Determinants of subnational budget/fiscal transparency: a review of empirical evidence. Public Sector Economics, 42(4), 449-86. DOI: https://doi.org/10.3326/pse.42.4.4.
Search in Google Scholar Back to article
State Electoral Commission of the Republic of Croatian (2017). Elections and referendums. State Electoral Commission. Available at https://www.izbori.hr/arhiva-izbora/index.html#/app/lokalni-2017
Search in Google Scholar Back to article
Strömberg, D. (2001) Mass media and public policy. European Economic Review, 45(4-6), 652-63. DOI: https://doi.org/10.1016/S0014-2921(01)00106-4.
Search in Google Scholar Back to article
Styles, A. K., & Tennyson, M. (2007). The accessibility of financial reporting of US municipalities on the Internet. Journal of Public Budgeting, Accounting & Financial Management, 19(1), 56-92. DOI: https://doi.org/10.1108/JPBAFM-19-01-2007-B003.
Search in Google Scholar Back to article
Styles, A. K., & Tennyson, M. (2007). The accessibility of financial reporting of US municipalities on the Internet. Journal of Public Budgeting, Accounting & Financial Management, 19(1), 56-92. DOI: https://doi.org/10.1108/JPBAFM-19-01-2007-B003
Search in Google Scholar Back to article
Suchman, M. C. (1995). Managing Legitimacy: Strategic and Institutional Approaches. Academy of Management Review, 20(3), 571-610. DOI: https://doi.org/10.5465/amr.1995.9508080331.
Search in Google Scholar Back to article
Tavares, A. F., & da Cruz, N. F. (2014, October). The determinants of local government transparency: a preliminary analysis. Proceedings of the 8th International Conference on Theory and Practice of Electronic Governance (p. 117-23). Association for Computing Machinery, New York, NY, United States. DOI: https://doi.org/10.1145/2691195.2691291.
Search in Google Scholar Back to article
Tortal.hr (2017, June) IJF: Porasla proračunska transparentnost lokalnih jedinica. Retrieved from https://www.tportal.hr/biznis/clanak/ijf-porasla-proracunska-transparentnost-lokalnih-jedinica-20170704.
Search in Google Scholar Back to article
Veiga, F., J., Veiga, L. & G., Morozumi, A. (2017). Political budget cycles and media freedom. Electoral Studies, 45 (February 2017), 88-99. DOI: https://doi.org/10.1016/j.electstud.2016.11.008.
Search in Google Scholar Back to article
Wildowicz-Giegiel, A. & Kargol-Wasiluk, A. (2020). The phenomenon of fiscal illusion from theoretical and empirical perspective. European Research Studies Journal, 23(2), 670-93. DOI: 10.35808/ersj/1615.
Search in Google Scholar Back to article
Zou, G., Li, H., Meng, J. G., & Wu, C. (2020). Asymmetric effect of media tone on IPO underpricing and volatility. Emerging Markets Finance and Trade, 56(11), 2474-2490. DOI: https://doi.org/10.1080/1540496X.2019.1643320
Search in Google Scholar Back to article
34 portal (2017, Juni). Proračun Općine Velika potpuno je transparentan. Retrieved from https://www.034portal.hr/index.php?id=27414.
Search in Google Scholar Back to article

Effects of Media Coverage on Budget Transparency in Croatian Local Administrative Units

Abstract

Paradigm

My account