Abstract
The chapter discusses the institutional context and principal actors in the policy-making process in Croatia. The introductory section describes the basic features of political and economic development after dissolution from Yugoslavia at the beginning of the 1990s. Leaving the Yugoslav federation and socialism did not take place in the context of peaceful establishment of market and democratic institutions, but was followed by a devastating war, which ended in 1995. It was within this context that a democratic system was established, with strong authoritarian tendencies, cronyism and corruption. The direct consequence of such development was the creation of a relatively non-effective framework in policy-making, permeated by strong clientelistic networks and non-efficient mechanisms in governing fundamental public policies. After 2000, the process of strengthening democratic institutions and Europeanization began, which resulted in more inclusive forms of policy-making process. The governance capacity in Croatia is, however, still relatively weak, with low capacity for steering and implementing public policies.
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Notes
- 1.
As early as in 1990—the year of the first multiparty elections and introduction of democracy—GDP already dropped by 9.9%. As it kept dropping in the years that followed (as much as by 21.1% in 1991, by 11.7% in 1992 and by 8.0% in 1993) (Franičević and Bićanić 2007: 643), in the first four years of the development of democracy and transformation of economy, GDP recorded a staggering drop of 50.7%.
- 2.
Croatian companies’ sales of goods to other Yugoslav republics (Bosnia-Herzegovina, Macedonia, Montenegro, Serbia and Slovenia) exceeded their exports to other countries (primarily to the then EEC member states) by 2.19 times. Also, the purchases from the companies from other Yugoslav republics exceeded the total import from other countries by 2.36 times. This illustrates the importance of the then Yugoslav single market, where the companies from all parts of Yugoslavia made significantly more of their total sales than in the markets of third countries. True, there were differences in the dependency on the said single market. While Slovenian companies’ export to and import from this market was only 1.86 and 1.71 times, respectively, higher than their export to and import from other countries, the dependency on this market in the case of companies from other federal units was significantly higher. As regards exports, those made to the markets in other republics exceeded those made to other countries as follows: in Bosnia-Herzegovina by 3.15 times; in Macedonia by 4.91 times; in Montenegro by 5.35 times; and in Serbia by 4.20 times. As regards imports, those from the markets of other republics exceeded those from other countries as follows: in Bosnia-Herzegovina by 3.52 times; in Macedonia by 3.01 times; in Montenegro by 7.49 times; and in Serbia by 3.93 times. The ratios were calculated on the basis of the 1986 data published in Ekonomska politika, Belgrade, 1991. See Petak (2005: 60).
- 3.
Decentralization reforms enacted in 1970s in the former Yugoslavia led to a situation where little more than approximately 20% of the budget funds was allocated to the federation. A total of 75% of the budget funds went to the sub-national units. In the 1980s, a decade before the disintegration of Yugoslavia, Croatia and other federal units had in place a markedly decentralized system in which more than 35% of public revenue went to local authorities—only a portion less than the share that went to the federal units (republics and autonomous provinces). The smallest of the shares went to the federation—somewhat more than 20% of public expenditure. See Bogoev (1991).
- 4.
In their comparison of the development of capitalism in Romania, Bulgaria and Croatia, Bohle and Greskovits point out that between them—as the countries that neither have the democratic corporatist order in place (unlike, for example, Slovenia) nor have they developed a capable state—there is a substantial difference nevertheless. Unlike Romania and Bulgaria, which saw the introduction of the democratic order as weak states, Croatia saw the beginning of the transition period as a capable state. However, the political processes and the war of the 1990s “undermined an originally capable state” (Bohle and Greskovits 2012: 194).
- 5.
Such a definition of governance steering capacity uses the same approach used in Bertelsmann’s Sustainable Governance Indicators concept, where steering capability includes five dimensions: strategic capacity, interministerial coordination, evidence-based instruments, societal consultation and policy communication (Bertelsmann 2017).
- 6.
The first development document adopted by the Croatian government was “The Basics of the 1991/1992 Economic Policy with a Program of Measures” (Mirošević 2012: 7) and the first document to contain the word “strategy” in its title was “The Development Strategy of Croatian Tourism” (Mirošević 2012: 17), adopted in 1993.
- 7.
“Croatia is lacking proper strategic plans—in most cases the accepted strategies have technical shortcomings and serve mainly for excuse purpose.” (Koprić 2011: 15).
- 8.
In its 2017 European Semester: Country Report—Croatia, the European Commission expressly mentions in three places the need to eliminate the inadequacies in the implementation of the strategic planning tools as the crucial shortcoming in fundamental policy formulation. The report first assesses strategic planning as one of two crucial weaknesses in fiscal governance, then it points out that the absorption of EU funds remains hindered by the limited administrative capacity and strategic planning and, finally, that the supervisory boards controlling local public enterprises are not involved in the strategic planning system (European Commission 2017: 2, 10, 50).
- 9.
For example, experts were rather intensively involved in the tax system reform of 2016, but that was one of a very few examples of their relevant involvement in policy formulation. The problem, however, is the fact that in only 24% of the cases when working groups were formed for drafting bills were scientists and other external experts invited to join them (GONG 2013b).
- 10.
Croatian governments often take their time preparing policy proposals and allocate substantial funds for their formulation, only to give them up when they face a resistance to them in a form of petitions, protests or referendum threats. Recent examples include Zoran Milanović government’s abandoning of its 2015 highway monetization program and Andrej Plenković government’s abandoning of the introduction of real estate tax.
- 11.
Cerami and Stubbs (2011) make a distinction between state-enabled market economies (in which they include Central European countries), state-influenced market economies (in which they include Croatia, other former Yugoslav countries except Slovenia, and Romania, Bulgaria and Albania), and state-interfered market economies (in which they include the countries emerged from the former USSR).
- 12.
The researchers of the public sector in Croatia have several times reported on the problem of corruption as the key problem for Croatian governance reformers. The problem of tackling with corruption appears in their view an even bigger problem than coping with excessive public expenditure, because a weak government and a rather high level of corruption considerably impairs the efficiency of the public sector (Bađun et al. 2014).
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Petak, Z. (2019). Policy-Making Context and Challenges of Governance in Croatia. In: Petak, Z., Kotarski, K. (eds) Policy-Making at the European Periphery. New Perspectives on South-East Europe. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-73582-5_2
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