STRENGHTS AND CONSTRAINTS OF REGIONAL
DEVELOPMENT IN CROATIA
Mirjana DRAGIČEVIĆ, Full Professor
Faculty of Economics & Business, Kennedy sq 6, 10 000 Zagreb
E-mail: mdragicevic@efzg.hr
Paula LETUNIĆ, Teaching and Research Assistant
Faculty of Economics & Business, Kennedy sq 6, 10 000 Zagreb
E-mail: pletunic@efzg.hr
Abstract
One of Croatia’s principal economic problems is its regional disparities. The purpose of this
paper is to analyse the strengths and constraints in resolving this problem that includes
regional inequalities, at institutional and empiric levels in these two counties: the most
developed Zagreb County and the least developed Vukovarsko-srijemska County. The main
hypothesis of the paper is to prove/demonstrate/examine/ that in order to decrease the
regional disparities and strengthen the bottom-up development, in addition to the built
institutional infrastructure, partnership between private and public sector should be
established as well as a coordination of networks among all levels of authority (especially
between regional and local authorities). Hence, a research will be carried out based on the
inquiries and interviews with the main stakeholders in the two counties. The most important
issue of this paper is to find the answer of the following dilemma: is a developed institutional
infrastructure in Croatia, a necessary and sufficient assumption for efficient and more equal
regional development, or does everything depend on the initiative of different stakeholders
and the level of their awareness of important coordination and partnership between them?
1
STRENGHTS AND CONSTRAINTS OF REGIONAL
DEVELOPMENT IN CROATIA
Mirjana DRAGIČEVIĆ
Faculty of Economics & Business, Kennedy sq 6, 10 000 Zagreb
E-mail: mdragicevic@efzg.hr
Paula LETUNIĆ
Faculty of Economics & Business, Kennedy sq 6, 10 000 Zagreb
E-mail: pletunic@efzg.hr
Abstract
One of Croatia’s principal economic problems is its regional disparities. The purpose of this
paper is to analyse the strengths and constraints in resolving this problem that includes
regional inequalities, at institutional and empiric levels in these two counties: the most
developed Zagreb County and the least developed Vukovarsko-srijemska County. The main
hypothesis of the paper is to prove/demonstrate/examine/ that in order to decrease the
regional disparities and strengthen the bottom-up development, in addition to the built
institutional infrastructure, partnership between private and public sector should be
established as well as a coordination of networks among all levels of authority (especially
between regional and local authorities). Hence, a research will be carried out based on the
inquiries and interviews with the main stakeholders in the two counties. The most important
issue of this paper is to find the answer of the following dilemma: is a developed institutional
infrastructure in Croatia a necessary and sufficient assumption for efficient and more equal
regional development, or does everything depend on the initiative of different stakeholders
and the level of their awareness of important coordination and partnership between them?
Key words: Regional development, regional disparities, partnership development, regional
development agencies, regional development plans.
1. Introduction
The economic development in Croatia is heavily burdened by huge regional disparities.
Although, they existed even before the independence of the Croatian state, during the recent
seventeen years these disparities have widened among most counties and exceeded the
disparities of the least and the most developed EU member states, 1:8 in GDP level. (Eurostat,
2007) The initial question of main prerequisites for more equal regional development in
Croatia and strengths and constraints of this development, challenged us to research and carry
out the analysis for the purpose of this paper.
In the first part of the paper the basic macroeconomic indicators of regional disparities are
analysed. In the second part, the institutional infrastructure for regional, partnership,
development is carried out, starting with EU regional standards as the benchmark. The
analysis of institutional infrastructure for regional development, including the analysis of the
strategy for regional development, regional operation plans and the role of development
agencies, are given in the third part. In the forth part, the disparities in two counties are
analysed both at the institutional and the empiric levels that shape the base of this research. In
conclusion, the strengths and constraints of regional development are summarised
2
2. Regional development in Croatia: some basic macroeconomic indicators
The regional disparities that influence huge development gaps were inherited from the
previous system. They existed in the self-government socialistic period before Croatia became
an independent state. From the beginning of the independence of the Croatian state they were
obvious, and, at the same time, they were widening in the last seventeen years, both as the
consequence of the war and the absence of the government’s strategies and policies for
resolving this problem. Regional development was not in the focus of all previous
governments.
Although the few macroeconomic data cannot give the comprehensive picture of the
consequences of disparities they are significant indicators of the long-term existence of
regional inequalities based on the county’s data, because administrative and territorial
structure is fragmented consisting 21 counties.
2.1 Macroeconomic regional disparities
Regional disparities in Croatia are evident from the macroeconomic data on the counties’
share in total GDP. The total GDP was 22,177 million Euros in 2001 and 30,950 million
Euros in 2005.1
Table 1. Counties’ share in total GDP (2001 and 2005 Current prices)
County
Republic of Croatia
Zagreb county
Krapinsko-zagorska
Sisačko-moslavačka
Karlovačka
Varaždinska
Koprivničko-križevačka
Bjelovarsko-bilogorska
Primorsko-goranska
Ličko-senjska
Virovitičko-podravska
Požeško-slavonska
Brodsko-posavska
Zadarska
Osječko-baranjska
Šibensko-kninska
Vukovarsko-srijemska
Splitsko-dalmatinska
Istria
Dubrovačko-neretvanska
Međimurska
City of Zagreb
County share in total GDP
County share in total GDP
2001
2005
100
4.7
2.5
3.6
2.7
4.0
2.9
2.4
8.1
1.0
1.7
1.4
2.4
2.6
5.8
1.6
2.7
7.9
6.3
2.5
2.2
3.1
100
5.4
2.2
3.0
2.3
3.5
2.5
2.2
7.8
1.5
1.5
1.4
2.3
3.0
5.7
1.8
2.6
8.5
6.5
2.6
2.1
31.8
Source: CBS, available at: www.dzs.hr
The city of Zagreb had the highest share in total GDP, but it did not demonstrate fast growth.
The fastest growth of 50 per cent was noted in the Ličko-senjska County, and the
1
Data for counties on previous period is not available.
3
undeveloped Vukovarsko-srijemska County with a low share in the total GDP experienced a
decrease of 3.7 per cent in this period.
Figure 1. Comparison of GDP in million Euros (Current prices) selected counties from 2001
to 2005.
12000
GDP in mil. Euro
10000
Zagreb county
Varaždinska
8000
Koprivničko-križevačka
Ličko-senjska
6000
Vukovarsko-srijemska
4000
Splitsko-dalmatinska
City of Zagreb
2000
0
2001.
2002.
2003.
2004.
2005.
Source: CBS, available at: www.dzs.hr
The figures illustrate huge disparities in GDPs of the selected counties; the City of Zagreb’s
GDP was 11 times higher than that of the Vukovarsko-srijemska County, and 3 times higher
than the country’s average GDP.
In comparison to the EU-25 member states, Croatia achieved 49-50 per cent of the average
EU GDP per capita (like Slovakia and Poland) with the most developed and the least
developed counties achieving 85 and 27.1 per cent of EU GDP per capita respectively.
The differences in unemployment rates among the counties (Table 2.) confirm the huge
regional disparities.
Table 2. Unemployment rates in Croatia and counties from 2003 to 2005.2
Unemployment rate
2
County
2003
2004
2005
Republic of Croatia
Zagreb County
Krapinsko-zagorska
Sisačko-moslavačka
Karlovačka
Varaždinska
Koprivničko-križevačka
Bjelovarsko-bilogorska
Primorsko-goranska
Ličko-senjska
Virovitičko-podravska
Požeško-slavonska
Brodsko-posavska
Zadarska
Osječko-baranjska
Šibensko-kninska
Vukovarsko-srijemska
20.6
19.9
16.7
32.6
31.2
15.7
19
27.4
15.6
22.1
32.4
25.5
33.9
28.8
30.4
36
37.7
18.9
15.2
13.4
29.7
26.5
15.1
17.5
24.5
14.6
18.3
29.8
21.4
30.1
23.7
27.8
31.5
34.2
19
15.4
14.9
30.4
27.2
15
18.5
26.1
14.6
22.5
30.5
21.8
30.9
22.4
28
28.8
33.6
The labour force survey data on counties’ unemployment rates is not available.
4
Splitsko-dalmatinska
Istria
Dubrovačko-neretvanska
Međimurska
City of Zagreb
27.4
10
23.9
17.5
11.2
24.2
8.8
21
16.8
9.7
23.7
8.8
20
17
10
Source: CBS, available at: www.dzs.hr
The data illustrates that the Istria County had the lowest unemployment rate and was followed
by the City of Zagreb. Administrative unemployment rates higher than 25 per cents are
present in several counties, but the Vukovarsko-srijemska County had the highest
unemployment rate of 40.1 per cent3. During the entire transition period the Vukovarskosrijemska County had one of the highest rates and the City of Zagreb was among the lowest
ranking counties.
These differences are also obvious from other data. The profit share in the total revenues and
the educational level of the labour force also illustrate these disparities. The highest share of
the profit in the total revenues of the enterprises is evident in the Istria County, in the period
(6.2 per cent), which was followed by the Zagreb, the Varaždinska and the Međimurska
Counties. The best educational level of employed is present in the City of Zagreb county with
16.6 per cent of highly educated inhabitants over 15 years of age, in the Primorsko-goranska
County with 9.8 per cent, in the Splitsko-dalmatinska County with 8.4 percent, and the
Dubrovačko-neretvanska County with 8.1 per cent. At the bottom of the scale is the
Krapinsko-zagorska County with 3.2 per cent of highly educated persons. (NKV, 2004: 45).
3. Institutional framework for regional development in Croatia4
Generally, institutions matter and they are of a huge importance for the post-transitional
economic and social development. Institutions for regional development are particularly
crucial in the countries characterised by regional inequalities.
Most countries have had poor governance and institutions in the transition period. (Sachs,
2003:39) and experience demonstrates that underdevelopment and unequal development
cannot be overcome simply by importing institutions that were successful in other countries.
In most cases the process of direct implementation of institutions by the foreign organisations
failed. International institutions tried to reform institutions through conditionality, a list of
specific changes that a country must enact before funds will be disbursed. However,
conditionality did not fit well with the institutional change.
A World Bank’s analysis of past projects concluded: “…donor financing with strong
conditionality but without strong domestic leadership and political support has generally
failed to produce lasting change” (World Bank, 1998:4). The World Bank’s “World
Development Reports” redefine institutions in an elastic way to include not only formal and
3
The differences on the local level are more obvious, than on the counties level: highly educated persons 9
times, and the unemployment rates to 90 per cent, especially in urban centres (towns) to their surroundings.
4 According to North’s definition (1990) institutions encompass organisations, institutions, instruments,
procedures and documents (strategies, action plans, etc.) and the legal framework in which a given system
operates. In this case, it is the political and economic system in its territorial and administrative units. The
establishment of a large number of institutions does not represent a social problem, although it implies cost to
the society which cannot be reduced by efficiency of those institutions or by the degree of satisfaction an
individual may gain by utilizing the services of those institutions.
5
informal rules, but also organisations (World Bank, 2002).5 Successful institutions require
“goodness of fit” between the specific innovation and the country’s broader institutional
environment, including its norms and beliefs. (Levy and Spiller, 1994).
The creation and implementation of well-fitting institutions is correlated with the trust
between the stakeholders and trust, a specific form of social capital strongly associated with
growth and development (Fukuyama, 1995; Knack and Keefer, 1997).
The lack of trust between stakeholders is often related to the lack of the partnerships. It
undermines democratic rules, and mistrust keeps citizens from cooperating to monitor
politicians, and impedes reforms because the government’s commitments are not credible.
Further analysis should demonstrate whether in Croatia the new institutions for regional
development were imposed by foreign organisation or by strategic leadership of governments;
whether this framework is built on trust between the stakeholders or the lack of trust between
them6. At any rate, the benchmarking in regional policy was based on the EU standards and
policies. Nevertheless, it remains to be seen who forced the changes and the adjustments of
institutional framework: the domestic or foreign organisations; the domestic or foreign
strategic leadership?
3.1. EU regional standards and policy
The basic principle of the European Union regional policy is to decrease the inequalities
between the rich and the poor regions, and it should become the main principle of the future
member states.7 The EU goal is to provide equal opportunities for benefiting from the
advantages of the common market and the monetary and economic union for all regions and
their inhabitants. The data that on regional policy expenditure programmes demonstrate that
they account a third of the total EU budget expenditure given expresses the importance of
regional policy (IMO, 2001: 30).8
The compatibility with the EU regional policy and the criteria for the support to the less
developed regions, supposes the implementation of the Nomenclature of Territorial Units for
Statistics (NUTS).9
5
These definitions allow aid agencies to characterize any reform as institutional, without radically changing their
approach.
6 In-depth analysis, based on desk research of all available strategies, regional operational plans, the work of
regional agencies, and other documents important for regional development was carried out and demonstrated in
the following chapters.
7
The support to the regions lagging behind is provided by different EU structural funds: ERDF (European
Regional Development Fund), ESF (European Social Fund) and others, as well as by the different initiatives:
INTERREG, supporting cross-boarder cooperation by promoting regional development plans, LEADER
supporting rural areas for the implementation of integrated development plans, and URBAN (promoting
innovative strategies for economic and social conversion of the poor urban areas.
8 The basic principles of the EU structural policy are:
- Programming principle: preparation of multiyear development plans, partnership decision-making;
- Partnership principle;
- Subsidiary principle: enforcement of the decisions on the lowest possible level;
- Coordination principle.
9
It was created with the aim to classify all administrative-territorial units of the member states for the purpose of
the EU regional statistics. The basic criteria of the Nomenclature are:
-Institutional/normative – it expresses the regional limits in a state, it is analytical or functional, and it determines
regions according to the geographical criteria;
6
As the candidate country, Croatia was faced with the requirement to adjust its institutional
framework to the EU standards and procedures.
3.2. Croatian regional standards and policy
The adjustments in the regional development policy are important, because they are the
preconditions of adjustments in the industrial policy too. The acceptance of the EU standards
in regional policy allows Croatia access to the EU structural funds with important financial
and technical support.
On the national level the future regional development was only pointed in the “Strategic
Framework for Development of Republic of Croatia 2006-2013” (RH, 2006), but according to
the entire institutional infrastructure, the Regional Development Strategy is built up, as well
as was the Regional Operational Plans in most counties. There are also Regional development
agencies that are mostly engaged in the SMEs’ projects and other activities directed at
enhancing competitiveness.
3.3. Regional development strategy
The basic strategic regional development document is: “Strategy of the Regional
Development in Croatia/Strategy for Building up the Capacities for Regional
Development”.10(RH, 2005). The strategy is based on the comprehensive approach to the
regional development, based on the participation of all stakeholders both at the national and
the local levels. (RH, 2005:4). It should become the national framework for the partnerships
inside and among counties, their development agencies that have the task to manage and
monitor the development processes in the counties, and implement counties’ and intracounties’ development strategies.
Besides the proclaimed bottom-up approach, the strategy is based on the European standards:
on the respect of local interests and projects, on partnership approach, on connecting the
interests of private public and civil sector. The strategy consists of goals and priorities, and
for each priority the measures for its implementation are analysed.
Special attention in the Strategy is paid to lowering the development gap among the counties,
and on the necessity for faster and more efficient development of the less developed counties.
The directions for the development of the counties and broader regions are focused on the
support to the undeveloped, and on the strengthening of intra-county and interregional
cooperation.
According to this document the comprehensive goal of regional development is the existence
of a functional policy that supports sustainable development and national competitiveness,
which means the decreasing of social and economic differences in the country (RH, 2005:6).
The new approach to regional development elaborated in this strategy becomes the first step
in multifaceted understanding of development but it has to be implemented at all levels as
networked action.
10
The Strategy is based on the best practices in the EU member states.
7
However, the Strategy that was created by the strong assistance of foreign consultants
(externally driven) has not been implemented yet and its goals have not been realized because
the regions have not yet been established.
3.4. Regional operation plans (ROPs)
One of the main institutional documents needed for the future development are Regional
operation plans (ROPs).11 The goal of the ROPs is to create a strategic policy in order to
allocate scarce resources efficiently and to establish the institutional basis for project
financing to reach its priorities. The vision and the goals of counties ROPs, besides
representing an individual county strategy, should also integrate the vision and the goals of
the entire region, as they are a part of it. According to the national Strategy, this should not be
the task of neither local governments, nor counties, but of the intra-ministry coordination
group that has not yet been formed. The lack of such coordination prevents the evaluation of
county strategies and allocation of financial funds.
The EU has recommended Croatia to make a new administrative and territorial division with
fewer regions. Nevertheless, the government has not created a new territorial constitution yet.
The analysis among the counties according to the ROPs demonstrates that less developed
counties created ROPs before the developed ones. For example, the Vukovarsko-srijemska
County was one of the first counties in Croatia to create ROPs with the support by USAID’s
and UNDP’s assistance programmes for industrial development. A similar situation could be
found in the Sisačko-moslavočka and the Ličko-Senjska counties.
This could be explained by the fact that greater attention and consulting support of the
international institutions in the less developed counties, although an overview of the
institutions that carried out ROPs demonstrates that foreign consultants are present in the
developed counties too.
3.5. Regional development agencies 12
Most counties in Croatia have established development agencies. They are important for
strategic and operational support to business firms, for networking in the public and civil
sectors both at local and regional levels.
The institutional structure of the counties’ development agencies is under the jurisdiction of
the regional governments, which strictly indicates that these agencies have to adjust to
national standards regarding the expertise, skills and qualifications of human resources. There
are several development agencies operating across counties in Croatia; IDA /Istrian
Development Agency/ in Istria, and LEDA in the Vukovarsko-srijemska county mainly
focused on SMEs. 13 Besides these agencies, new regional agencies have been formed in
11
Regional operational plan (ROP) is a plan and the means to a more efficient and successful management of the
development in a county. It is a standardized instrument that the EC uses to foster regional development in the
countries that are willing to become the EU members.
12 In EU, LEDA is an umbrella development agency. A major purpose of LEDA’s in transitional economies is
to improve the relations between institutions, development services and the civil society.
13 In the Primorsko-goranska County an agency Porin has been developed, while the Sisačko-moslavačka and
Splitsko-dalmatinska counties are preparing to set up development agencies. The Centre for technological
development in the Brodsko–posavska County operates as a development agency. Regional development
agencies of Slavonia and Baranja were set up in the Osječko-baranjska County, and the establishment of a
development agency is also planned in the Krapinsko-zagorska County.
8
certain statistical regions. For example, in the Adriatic statistical region it is the Adriatic
Development Agency with seven counties and the total population of 1.6 million. In the
statistical region of Eastern Croatia – the Slavonia regional development agency has been
established comprising 6 counties with 900 00 inhabitants.
4. Regional disparities in Croatia: The case of two counties
Before analysing the existing institutional infrastructure in the two counties, it is necessary to
reiterate that there is a distinct gap in the levels of economic and social development between
two counties, which can be seen by:
 Considerable economic differences: in GDP per capita, the unemployment rate, average
salary, and consequently in the level of living standard;
 Differences in the level of establishment and development of institutional infrastructure –
intellectual capital capable/less capable of taking up the role of a 'driver' in the development
process;
 Availability of used/unused natural resources as preconditions of development;
 War consequences.
4.1. Case I: The Zagreb County
4.1.1. Specific economic indicators
The Zagreb County has 7 per cent of Croatia’s total population and covers an area of 5.4 per
cent of the total geographic area. Its traffic position together with the economic potential and
human resources has positioned the Zagreb County among the most propulsive and fastest
growing counties in Croatia in the last five years.
However, according to the CSB data for 2005, GDP per capita in the Zagreb County was
three times lower than the Croatia’s average and almost three times lower than the EU 15
average. Manufacturing dominates the county’s GDP by 39 per cent, followed by the trade
accounting for 30 per cent and construction accounting for 10 per cent of GDP.
4.1.2. Regional operation plan of the Zagreb County
The County Development Strategy14 has been elaborated with the support of the Institute for
the International Relations /Zagreb/ according to the methodology recommended by the
national Regional development strategy. The strategy formally and substantially meets the
criteria and standards implemented in the EU.
The CDS’s frame is set by vision, priorities and measures on the one side and development
projects, to be prepared and carried out form 2006 to 2013, on the other. Unlike all former
experiences where the counties first made ROP, and then the development strategy, the
Zagreb County’s development strategy has included the ROP elements in addition to the
strategic elements.
14
The Zagreb county renamed the ROP into County Development Strategy
9
The principal strength of this strategy lies in the fact that it is the first strategy of the Zagreb
County which is formally brought by consensus of all interested partners with a clearly
defined vision, strategic goals, priorities, measures and projects for cities and communities. In
addition, this strategy contains clear criteria for evaluating and ranking projects, which was
not the case before.
According to the existing huge differences in economic development between the Zagreb
county and the City of Zagreb, and according to the new statistical organisation, Zagreb
county and the City of Zagreb will be the part of the same region, which will result in losing
financial aid from EU funds for the Zagreb county.
4.1.3. Development agency - ZACORDA
Zagreb County Regional Development Agency (ZACORDA) was established using the best
practice models of the EU Regional Development Agencies, in order to optimise development
goals of Zagreb County in the process of Croatia's adjustment to the EU programmes and
regional structure. The Agency was founded by the Zagreb County and 8 cities in the Zagreb
County. The agency is involved in preparing and implementing several projects of Zagreb
County.
4.2. Case II: The Vukovarsko-srijemska County
4.2.1. Specific economic indicators
The Vukovarsko-srijemska County lies in the east of Croatia encompassing 4.3 per cent of the
total geographic area and 4.27 per cent of the total population. It has rich natural resources:
forests accounting for 28.3 per cent of the total area, fertile lands, and navigable rivers, and
excellent continental and river transportation facilities. Before the war, this county was one of
the most developed areas in ex Yugoslavia.
Today, primarily due to the consequences of war destruction, the county is ranked as the least
developed county in Croatia. GDP per capita was 2899 Euros (2001), while the average GDP
per capita was 4977 Euros. (Lovrinčević et al, 2004: 393).
An extremely high unemployment rate, 40.1 per cent in 2001, exceeds the unemployment
rates of all other counties in Croatia. In terms of employment by the educational attainment
only 3.78 of the employed have university education. (PULS, 2004: 34.)
Trade dominates in the county’s GDP by 41.12 per cent, followed by manufacturing (27.18
per cent) and agriculture and forestry (11. 8 per cent). The county’s agricultural production is
not anymore the main development generator. Trade, especially retail trade, holds the
dominant position in all local economies in the county. The grey economy also has a
significant share in the county’s GDP.15 Food industry, timber-processing and non-metal
industry, has the highest potential as sources of new employment.
15
According to the estimations (Investment in Croatia, KPMG, 2001), the (grey economy accounts for around 25
per cent of the county’s GDP.
10
4.2.2. Regional operation plan of the Vukovarsko-srijemska County
The underdeveloped Vukovarsko-srijemska County is the first county in Croatia to develop a
Regional operation plan. It is interesting to note that this county is the only one that has a
County Development Strategy 2007-2013. (VSŽ, 2007).
The institutional framework for the future regional development is given in the Regional
Operational Plan /ROP/ 2004-2010. Its creation was supported by the international
organisations.16
Starting from the current socio-economic situation in the county, ROP defines its vision,
strategic goals, and defines the priorities and the measures for its implementation on the basis
of a SWOT analysis.
In the introductory notes of ROP (VSŽ, 2004:45) it is emphasized that the holistic and
integrated approach to the county’s development is needed as the means to tackle the
economic, social, administrative and environmental issues.
The SWOT analysis identified the main strengths of the county among the rich and
differentiated natural resources, and its excellent geographic position, while its main
weaknesses are high unemployment and a low level of exploitation of the valuable natural
resources. The basic opportunities were found in the traffic and logistic position, and
infrastructure was mentioned and as the main threat, as well as depopulation (especially of the
young highly educated people) and a high level of social exclusion. (VSŽ, 2004:46.)
As already stated and confirmed by this specific analysis, the structure of the ROP is
standardised: vision, long-term goals, priorities and their goals and measures. And all cities in
the county developed their strategies.
4.2.3. Development agency –LEDA
LEDA-entrepreneur’s centre in the Vukovarsko srijemska County was established in 2001 by
initiative from abroad and it works as a development agency. During the first two years the
agency operated as an Entrepreneurs’ Centre of the Vukovarsko-srijemska County later to
become the Local Development Agency of the Vukovarsko srijemska County.
The main goal of LEDA is to coordinate plans and strategies of regional policies on national
level and their implementation on regional/local levels.
The Vukovarsko-srijemska County was the first to found a development agency and establish
the ROP. The first results of the Agency’s successful work in meeting the set goals where
confirmed by granting 6.5 million euros for a strategically important project: building four
entrepreneurial zones /Vinkovci, Otok, Lovas and Gradište/ and the renewal and equipment of
eight vocational/craft schools in the Vukovarsko-srijemska County.
16
The county has faced major challenges over the past number of years. The local stakeholders want to grasp
the opportunities afforded by EU and other international support to turn the county's considerable advantages
into dynamic and inclusive economic growth. The ROP presents an important contribution for new, sustainable
and balanced socio-economic growth in the county.
11
5. The research results17
5.1. The Zagreb County
Regarding the question of the development of institutional infrastructure, the majority of
respondents? (most enquired) answered that the county’s strategy exists, while this was not
the case with the action plans and policies for its implementation.
Most answers emphasised the following regional development strengths:
 Excellent geographic and transport position (the Zagreb ring as the crossroad of European
transport corridors);
 Polycentricism – several cities located in the county;
 Well-protected natural resources ( underground waters, geo thermal water, woods; mineral
resources, eco-agriculture);
 Satisfactory road infrastructure;
 Good train connections;
 Developed craft sector, tradition, flexibility;
 Existing and potential business zones for the construction and agriculture
Constraints are seen mainly in the public sector:
 legal regulation that does not respond to the developmental activities;
 abuse in law implementation;
 decentralisation of the duties but not of the financial resources;
It is also stressed that the civil sector initiatives are strong and are developing according to the
successful examples from other counties and EU regions, supported by the national, EU and
other programs in terms of the technical support.
All respondents also emphasized the lack of partnership and trust between the stakeholders.
The overall analysis /at the institutional and research level/ demonstrates the lack of
government capacities in implementing built-in institutional framework (ROPs and agencies).
17
The research was based on based on the questionnaires and interviews with 10 administrative officials in
county offices and regional development agencies in both counties.
12
5.2. Vukovarsko- srijemska County
All respondents agreed that the institutional infrastructure has been built up in County
development strategy 2007-2013, ROP and Strategic City Plans. All the documents are
adjusted to the European standards. This county was the first in the country to accomplish this
successfully.
All respondents agreed that the main strengths for the future regional development are:
 Rich and diverse natural resources;
 Good geographic position;
 Dynamic sector of small and medium-size enterprises;
 Unpolluted environment;
 Good traffic connections;
 Rich cultural and historic heritage.
The main constraints according to the answers are:
 Depopulation;
 High unemployment;
 Growing poverty – social exclusion;
 Low level of high educated people;
 The significant share of unofficial economy;
 Absence of new technologies in industry;
 Weak environment protection;
 Migration of young educated people.
The concluding remarks according to the research results state that there is a huge gap in
Croatia between the high standard of the strategic regional institutional infrastructure on the
one side and the low level of economic development on the other. It is particularly worth
noting that in most answers we found that the stakeholders have a vision and know what they
want. In most answers the respondents demonstrated a high level of sensitiveness for
developing partnerships and trust in other stakeholders. It is to be expected, hence, that the
high level of aspirations, partnership and trust will attract the attention of both foreign
organisations and of national and regional stakeholders in the country in the near future.
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6. Conclusion
The analysis of strengths and constraints in Croatia’s regional development highlights the
basic institutional as the key prerequisite for regional development. The National
Development Strategy as well as the Regional Development Plans and the Regional
Development Agencies are in place in both studied counties as is the case in most counties in
Croatia. The regional statistical accounts /statistical regions/ have been made and some
development agencies for these new regions have been created too. The institutional
framework has been adjusted to the European standards. Furthermore, in 2008 the new
Government established the new Ministry for Regional Development.
Nevertheless, the analysis has identified a number of constraints: there is no coordination
among ROPs, i. e. between the inter- and intra- regional strategies, and among the regional
agencies; the existing disparity between the built institutional infrastructure and its
implementation is evident at different levels. At the national level, 21 counties do not
coordinate nor do they strategically rethink their future development in a partnership manner.
At the regional level, each county protects its position. Statistical regions have produced an
opportunity for future new regional development.
The research results have demonstrated:
 a lack of trust in public institutions;
 no experience in industrial cooperation;
 inefficient public administration as the main constraint to further development;
It can be concluded that the gap between the existing institutional framework (strategy, ROPs,
development agencies), their contest and suitable policies and actions for strategies
implementation permanently exists. Also there is a permanent gap between the declared and
the implemented: the institutional role and documents versus the policies and actions.
There is no comprehensive, mutually motivated institutional, more policy/action oriented
shift. There are only accidental individual efforts, proposals, projects, programmes, actions on
the local basis.
As the analysis has demonstrated all the regional documents were carried out by the support
of international institutions, and as the gaps are widening, this reflects the lack of the
government’s creativeness, strong leadership and political support.
According to aforementioned, the implementation of new regions should be carried out on
partnership basis and as the new ministry is in charge of governing the whole process the
crucial question is whether it has the capabilities and the competences to implement intraministerial policies and actions to resolve the said problems of developmental gaps among
counties. It should also initiate and involve the knowledge and expertise of all existing
institutions in private, public and civil sectors at local, regional and national levels in efforts
to support this process.
Regional strategies, policies and action plans should be dynamic and innovative. This means
that, according to the specific regional situation in Croatia (huge economic and social
differences), it is not suitable to “import” or imitate foreign institutions’ strategies and
policies.
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Data and documents available at:
www.centar-jls.com
www.dzs.hr
www.eurostat.com
www.hzz.hr
www.leda-vk.com/
www.mptpr.hr/
www.puls.hr
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www.zaklada.civilnodrustvo.hr
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