THE EFFICIENCY OF REGIONAL GOVERNMENT EXPENDITURE IN SMART TOURIST DESTINATION: THE CASE OF CROATIA

Purpose –Regional and local governments have recognized the importance of tourism for the regional economy, especially when it comes to budget revenues and expenditures. Efficiency is crucial for making sure beneficiaries receive the best-possible services in a given tourist destination. Therefore, the aim of this paper is to analyze the efficiency of regional government expenditures in 20 Croatian counties in the 2011-2016 period. Methodology – A data envelopment analysis (DEA) was applied to analyze the efficiency of regional government expenditures in smart tourist destinations. This is a non-parametric linear programming method for assessing the efficiency and productivity of decision-making units. For the purpose of this empirical investigation, 20 Croatian counties were observed, along with their average budget expenditures, in the 2011-2016 period. Findings – The results of the empirical analysis showed that there are an equal number of coastal and inland Croatian counties when it comes to regional government expenditure efficiency. This is interesting to mention, since more international tourists are gravitating towards smart tourist destinations located on the Croatian coastline, especially in the summer season. The results may provide regional and local governments with more information on the concept of “smartness” when it comes to tourist destinations, and their potential for sustainable development and economic growth. Contribution – This paper provides an empirical analysis on the efficiency of regional government expenditures in 20 Croatian counties in the 2011-2016 period. Its theoretical contribution consists of presenting the “smartness” concept and its importance for tourist destinations.