The doctoral dissertation investigates the impact of an increased level of online local budget transparency (OLBT) of all Croatian local government units (LGUs), i.e. 128 cities and 428 municipalities, and its consequences during 2014 - 2021. The main goal is to theoretically identify and empirically determine the main political and economic effects of an increase in the OLBT of Croatian cities and municipalities. Using econometric methods four hypotheses are tested, i.e. the impact of an increase in the OLBT level on selected political (re-election of politicians) and economic variables (total and direct debt per capita, budget balance per capita, budget credibility). In most of the tested models, the hypothesis on the influence of OLBI on re-election is confirmed, and a positive and significant relationship is obtained, i.e. in LGUs with higher OLBT the probability of the re-election of politicians is also higher. Voters reward incumbent politicians for the increase in budget transparency with re-election. A negative and significant relationship was confirmed in most of the tested models on the impact of OLBI on total and direct debt PC, i.e. in LGUs where the level of OLBT increases, both total and direct debt PC decreases. According to the principal-agent theory, it follows that in LGUs with a higher level of budget transparency, the level of debt is lower, because the increase in OLBT results in voters have greater access to information about the budget, while as a result incumbents try to reduce the amount of public debt. The influence of OLBI on the budget balance PC is contradictory and this hypothesis was not confirmed. A higher level of OLBT is positively and significantly related to deviations in current revenue, total expenditures and current expenditures, i.e. in LGUs where the level of OLBT increases deviations in current revenue, total expenditures and current expenditures increase.