POLITICAL ACCOUNTABILITY AND "VOTING-WITH-THE-FEET": EASTERN CROATIA VS. REMAINING CROATIAN REGIONS

Emigration has established itself as one of the most discussed topics in economic and political discourse in Croatia in the last couple of years. Nevertheless, there is still no full account of the reasons behind emigration or of the underlying reasons for the regional differences in the trends and origins of emigration. The general aim of this paper is to fill the gap in the literature by investigating one of the numerous reasons for emigration - the link between Tiebout's economic model of local government (voting-with-the-feet) and local government political accountability proxied by online local budget transparency index (OLBT). The paper first divides all Croatian local government units (cities and municipalities) into six regions, finding that Eastern Croatia exhibits the highest emigration trends and among the lowest political accountability of all the regions. Based on that, cluster analysis is carried out on all 127 Eastern Croatian cities and municipalities over the 2014-2017 period to deepen the understanding of such a trend. The main results suggest that local population will more likely engage in emigration if their local government unit has lower political accountability, higher unemployment rate, lower resident income and lower fiscal capacity.