Purpose: This article investigates innovation efficiency in European Union (EU) countries and addresses methodological inconsistencies in previous research. It evaluates how efficiently national innovation systems (NISs) convert innovation-related inputs into measurable outputs, with the aim of improving the reliability and interpretability of efficiency assessments. Design/Methodology/Approach: To identify a parsimonious and statistically relevant set of indicators, the study employs Multi-Cluster Feature Selection (MCFS), a hybrid method that combines unsupervised clustering with the supervised Least Absolute Shrinkage and Selection Operator (LASSO). The technique is applied to longitudinal data derived from the European Innovation Scoreboard (EIS), resulting in a consistent subset of thirteen indicators encompassing key stages of the innovation process. Following indicator selection, a two-stage Data Envelopment Analysis (DEA) model is applied to assess efficiency at both the technological/ knowledge-production stage and the commercialisation stage. This approach supports differentiation between countries that are efficient in generating knowledge outputs and those that are effective in converting these outputs into economic results. Findings: The findings indicate substantial variation in innovation efficiency across EU countries. Few countries achieve high efficiency at both stages, highlighting the difficulty of sustaining performance across the entire innovation value chain. The analysis reveals persistent inefficiencies, particularly at the commercialisation stage, consistent with previous research emphasising structural barriers to translating research and development outputs into economic gains. The results also demonstrate that differences in country rankings reported in the literature are often attributable to differences in indicator selection and DEA model specification. Even among studies using similar DEA frameworks, variation in indicator inclusion leads to different classifications of country performance. Practical Implications: The methodological choices improve comparability across countries and over time, while also reducing complexity. The two-stage DEA structure provides policymakers with further insight into the internal functioning of national innovation systems and the sources of inefficiency, particularly at the commercialisation stage. This enables more targeted policy interventions that distinguish between weaknesses in knowledge production and weaknesses in the economic exploitation of innovation outputs. Originality/Value: This study contributes to the literature by introducing MCFS into the field of innovation efficiency assessment and by offering a streamlined, empirically justified set of indicators suitable for DEA applications. By combining a data-driven feature selection approach with a two-stage DEA model, the article addresses methodological fragmentation in previous research and provides a more transparent and replicable framework for evaluating national innovation systems.
Purpose: This paper aims to analyse the state of democracy in Spain on the basis of the data and values provided by the principal international democracy indices, with particular emphasis on the concept of the Rule of Law as tempered power. It focuses specifically on the parameters relating to judicial independence, the politicisation of the Administration, and the perception of corruption, and proposes measures to improve governance at the central level of the General State Administration. Design/Methodology/Approach: The study adopts a mixed methodology, employing both quantitative and qualitative methods. Its aim is to examine the implications of Spain’s scores in the democracy and Rule of Law indices, and also to analyse the constraints on the exercise of arbitrary power (Krygier), evaluating the causes of these effects with a view to proposing reforms in the field of Public Administration. Findings: The study finds that, although Spain remains within the first quartile of the democracy indices analysed, its scores on the Rule of Law indicator have declined over the last decade. Academic contribution to the field: The research consists primarily of a single-country study of Spain, using both quantitative and qualitative data in order to situate the current state of one of the principal indicators of democracy in Spain, namely the Rule of Law, within objective parameters and to analyse the main trends identified. It compares the global and Spanish situations and proposes mechanisms which, in the authors’ view, would enable Spain not only to improve its position in these indices but, above all, to strengthen constraints on arbitrary power through the adoption of a teleological approach. Research limitations/implications: The breadth of the object of study, namely the relationship between the Rule of Law and democracy, requires the analysis to be limited to a specific territory (Spain), a particular level of government (the General State Administration), and a defined time frame (from 2012, coinciding with the major global economic crisis, to the present). Likewise, the scope of the research precludes a detailed study of all the attributes that constitute the Rule of Law and, moreover, not all the indices employ the same attributes or methodologies. Practical/social implications: The study has significant practical and social implications. Beyond what is established by the various indices, current events in Spain have confirmed the existence of problematic aspects of the Rule of Law linked to the politicisation of justice and the Administration, as well as corruption, all of which affect society’s perception of the functioning of democracy. Originality/Value: This research is particularly timely, as some leaders of Spain’s principal centre-left governing party have been implicated in corruption cases. At the same time, the current Prime Minister came to power in June 2018 following the success of a motion of no confidence prompted by corruption affecting the centre-right party then leading the government. Accordingly, without calling Spain’s democratic character into question, it is necessary to focus on those elements that may help to enhance the purpose of the Rule of Law as a means of tempering the exercise of power.
It is with deep respect that we bid farewell to Prof Dr Janez Grad, a distinguished professor, visionary, and founding member of the scientific journal Uprava, now CEPAR. Through his work, he left a lasting mark on the development of scientific and professional thought in mathematics and informatics, both in Slovenia and internationally. He believed in the importance of linking theory and practice, and in the power of the written word. As a founding member of the journal, he helped create a space for critical discussion, scholarly depth, and the advancement of the field.
Purpose: This paper develops and operationalises a transparent, rule-based model of horizontal equalisation for the Federation of Bosnia and Herzegovina (FBiH) and assesses its multi-year effects on disparities in fiscal capacity. It addresses a setting in which institutional asymmetry and weak central coordination have produced persistent vertical and horizontal fiscal imbalances. Design/methodology/approach: The paper combines comparative institutional analysis with a data-driven assessment of horizontal disparities. Using cantonal-level data for FBiH for the period 2018–2024, the results are interpreted within an empirical scope that excludes municipal arrangements because comparable data are unavailable and because vertical-balance issues remain politically sensitive; these issues are therefore identified as priorities for future research. The article specifies a two-pillar allocation rule: (I) a derivation share and (II) a capacity-based equalisation fund with an 80 per cent post-equalisation floor. “Before/ after” allocations are compared using subnational data for 2018–2024 at the cantonal level. Because consumption is unobserved, income is used as a residence-based proxy for VAT. Effects are tracked through the mean share of FBiH, the Gini coefficient, and the coefficient of variation, while eligibility for Pillar II is dynamic: cantons below 100 per cent before equalisation qualify each year. Findings: The simulation results indicate that the proposed model achieves significant horizontal equalisation without weakening fiscal incentives for better-performing cantons. System-wide, mean fiscal capacity rises from 88 per cent to 99 per cent of the FBiH average, while both the Gini coefficient and the coefficient of variation fall by roughly one half. Among dynamically eligible cantons, the effects are even more pronounced: the mean rises by 19 percentage points and dispersion falls by 70 per cent. High-capacity cantons remain above 100 per cent after equalisation, indicating that the model avoids over-equalisation. The results remain robust through the COVID-19 and inflation years, supporting a four-year recalibration principle. Academic contribution to the field: The paper specifies and audits a transparent two-pillar model for FBiH, centred on the per-capita fiscalcapacity gap and an 80 per cent adequacy floor calibrated to secure a comparable minimum while keeping high-capacity cantons above 100 per cent after equalisation. By connecting fiscal design with questions of institutional fairness, territorial cohesion, and rule-based governance, the article contributes to wider debates on fiscal federalism in politically fragmented systems. Because destination-based VAT, asymmetric territorial status, and reliance on proxy measures of consumption are common in federations and regional unions, the two-pillar design developed for FBiH is presented as a transferable template for converting politically negotiated tax-sharing coefficients into transparent, rule-based allocations. Research limitations/implications: The analysis uses income as a residence- based proxy for the VAT base because canton-level consumption data are unavailable. It targets horizontal fiscal capacity only; expenditure needs, cost disabilities, and municipal disparities are not modelled. The parameters, namely the 80 per cent floor and 25 per cent pool, are calibrated rather than estimated, and the simulations are mechanical rather than behavioural. Future work should triangulate proxies, such as retail turnover and VAT administrative aggregates, add cost-need modules, test parameter sensitivity, and apply panel and behavioural methods to inform the four-year recalibration. Practical implications: The framework replaces coefficient-based bargaining with rule-based, auditable allocations that preserve incentives, reduce inter-cantonal tensions, and improve predictability. It also informs two governance steps: centralising external debt service at the federallevel with transparent revenue-share compensation, and phasing in capped, performance-sensitive grants indexed to the indirect-tax pool. A four-year review anchors outcomes to the adequacy floor as fiscal and institutional conditions evolve. Social implications: By promoting convergence towards a minimum standard of fiscal capacity, the model supports equity, cohesion, and legitimacy in public finance. Transparent, rule-bound allocation can strengthen trust in institutions, improve service provision in underfunded areas, and contribute to more balanced territorial development. Originality/significance/value: The paper presents an implementable equalisation rule tailored to a highly decentralised federation and tested on 2018–2024 subnational data that include the COVID-19 and inflation shocks. It shows how an explicit floor, calibrated pool, and dynamic eligibility can compress disparities without over-equalising high-capacity jurisdictions, offering a replicable template for reform-minded federations facing similar institutional and fiscal challenges.
Purpose: This article examines the budget credibility of local governments (LGs) in two neighbouring EU countries, Slovenia and Croatia. It analyses eight economic determinants of budget deviations (BDs), defined as the difference between planned and actual budget revenues and expenditures, expressed as a proportion of planned amounts. In doing so, the study addresses an important gap in the literature by providing the first systematic empirical assessment of the economic factors shaping local budget credibility in Central and Eastern Europe, with implications for both fiscal policy and local public finance. Methodology: The analysis is based on a dynamic panel data model estimated using the system GMM approach and covers all 768 LGs in Slovenia and Croatia over the period 2016–2023. The sample comprises 128 cities and 428 municipalities in Croatia, and 12 cities and 200 municipalities in Slovenia. The empirical framework also incorporates local electoral cycles, including one election prior to and two elections during the observation period in both countries, in order to capture more fully the interaction between political and economic influences on local budgeting practices. Findings: The findings indicate that Croatian LGs display significantly greater BDs than Slovenian LGs. They also show that current BDs are strongly shaped by their lagged values, pointing to a high degree of persistence in budget credibility outcomes. In Croatia, larger population size is associated with lower BDs in total revenues and capital expenditures. In Slovenia, lower BDs are linked to lower unemployment, higher ownsource revenues, and greater reliance on government or EU grants. Overall, the results point to meaningful cross-country differences in the way socio-economic and fiscal factors affect local budget credibility, highlighting the need for context-sensitive approaches to fiscal management. Originality: This study makes an original contribution to the literature by combining comprehensive coverage of local governments with advanced econometric analysis to identify the economic determinants of local budget credibility. It also provides a basis for the development of harmonised tools for assessing budget credibility, with practical relevance for improving fiscal transparency, accountability, and sustainable local governance across EU countries. The findings may assist policymakers and fiscal managers in strengthening budget planning and execution, thereby contributing to more effective public service delivery and greater financial stability.
