In the new issue of the journal Public Sector Economics Mislav Brkić analyses fiscal developments and the factors driving the reduction in government debt ratios in EU member states after the pandemic, focusing on the role of primary surpluses and the snowball effect. The analysis shows that the favourable snowball effect, reflecting the positive difference between nominal growth rates and average interest rates on government debt, was the key factor behind the rapid decline in debt ratios. The paper also discusses the post-pandemic challenges and adverse shocks that put pressure on national budgets and thereby contributed to the persistence of primary deficits during this period.

Eva Horvat, Zrinka Orlović Altabas and Davor Zoričić examine the risk-adjusted performance of pension funds in six countries based on country-level Sharpe ratios. The sample comprises four former transition economies – Croatia, Slovakia, Romania and Bulgaria – and Sweden, which together represent the EU member states in the dataset, while Chile is included as a non-EU member country to provide a more internationally balanced sample. The results of empirical analysis suggest that the performance of pension funds in both A and B risk-categories is statistically significantly different only in cases where pairwise testing involves Croatia. When comparing risk-categories A and B within each country, a statistically significant difference is found only in Bulgaria.

Robert J. Sonora and Josip Tica investigate household behavioural responses to health policy recommendations during the pandemic in Bosnia and Herzegovina, Croatia, Serbia and Slovenia, using mobility data and policy stringency indices to assess how individual behaviour adjusted to changing pandemic policies over time. The results show that individuals in Croatia, Bosnia and Herzegovina and Slovenia initially reduced their mobility more than implied by policy measures, while in Serbia behavioural responses initially lagged behind the level implied by restrictions. Overall, the findings indicate that behavioural responses to pandemic policies are dynamic and shaped by uncertainty, behavioural inertia, and the frequency and complexity of policy changes.

Dušan Pavlović, Živko Bojović and Vojin Šenk examine the structural information asymmetry between governments and citizens regarding public spending and the limitations of existing public finance transparency frameworks. It develops a conceptual model of deep transparency that links budget allocations with real-time execution data using tamper-resistant technologies such as WORM storage and blockchain, enabling citizens to verify public expenditures and trace them to their final recipients. The model suggests that such an approach could strengthen fiscal accountability and reduce the scope for patronage, corruption, and state capture.

Guillermo Peña analyses methods for applying VAT to loan-deposit intermediation, addressing the technical difficulties associated with transaction-by-transaction taxation that have led to the exemption of financial services in most countries. It develops a unified framework that integrates existing approaches into a single formulation and introduces a new classification based on shadow or implicit prices. The paper also derives two new variants of the mobile-ratio method for individual transactions, using either shadow prices or “explicit-made” implicit prices, which improve upon and address critiques of previous methods.

This year, Public Sector Economics celebrates 50 years of continuous publishing. The journal publishes theoretical, empirical, and policy-oriented articles in the field of public sector economics, analysing the role and functioning of the public sector at macroeconomic, sectoral, and microeconomic levels, in both developed and emerging markets. It is indexed in relevant national and international databases – including Web of Science and Scopus – and ranks among the leading journals in the field of social sciences in Croatia based on content quality, peer-review process, accessibility and visibility to the academic and professional community, and editorial work.

To mark the journal’s 50th anniversary, the annual PSE Conference will be held in Zagreb on 23 October 2026, focusing on the development of public finance from the mid-1970s to the present and discussing future directions for research.