Building on Croatia’s decade-long efforts to create a legislative, regulatory and governance framework that supports regional and local development planning, implementation, monitoring and evaluation, Croatia adopted, in 2021, its National Development Strategy 2030 with the clear goal of delivering balanced regional development. To assist in meeting that objective, and in response to a request from the Government of Croatia and its Ministry of Regional Development and EU Funds (MRDEUF), this report reviews Croatia’s multi-level governance and strategic planning arrangements supporting regional development. It is part of the “Enhanced Strategic Planning at Regional and Local Levels in Croatia” project, funded by Norway Grants.

Since joining the EU in 2013, Croatia’s macroeconomic performance has improved significantly. With average annual real GDP growth of 2.8% between 2013 and 2022, Croatia’s GDP per capita gap with the OECD average has narrowed by 11.5 percentage points. However, this growth has not been uniform across the country, with large and sometimes growing disparities across Croatian regions including in other areas driving well-being, such as educational attainment.

Since its accession to the European Union (EU) in 2013, Croatia’s macroeconomic performance at the national level has been impressive. Between 2013 and 2022, Croatian real GDP per capita grew by an average of 3.8%, more than double the average in the EU (1.6%) and in the OECD (1.3%) (OECD, 2023[1]). In tandem, Croatian living standards have begun to converge towards EU standards, with the country’s GDP per capita only 27.1% below the EU average in 2022, as compared with 38.6% a decade earlier (Eurostat, 2023[2]; World Bank, 2024[3]). Other positive economic trends over the period have included rapid export growth, a sharp and sustained fall in long-term unemployment, rising labour productivity and stable inflation rates.

This chapter provides an overview of regional development trends in Croatia at the national, regional and county levels. By analysing a wide range of demographic, economic and well-being indicators, this chapter provides the foundation for the policy assessment and recommendations that will appear in subsequent chapters. Main findings confirm trends such as a rapidly shrinking population, fast economic growth and modest improvements in citizen well-being at the national level but with large disparities across regions and counties. Regional inequalities remain large in Croatia, with residents in Zagreb and coastal counties earning higher incomes than in other parts of the country, for example.

This chapter examines recent advances in Croatia’s regional development policy and how it could be strengthened. First, it looks at how the country has reformed its legislative and regulatory framework for regional development since 2014. Second, the chapter explores the tasks and responsibilities of the main public actors involved in designing and implementing the country’s regional and local development planning documents. In particular, it focuses on the mandate of Croatia’s 21 regional development agencies and their position in the country’s multi-level governance framework. Finally, the chapter assesses the effectiveness of existing co-ordination mechanisms for regional development in ensuring vertical and horizontal policy coherence.

This chapter examines how Croatia’s mechanisms and processes for regional development planning, implementation, monitoring and evaluation work in practice, and assesses their effectiveness. First, it conducts an in-depth exploration of the key national-level planning documents guiding regional development in Croatia. It assesses the extent to which those documents embed balanced territorial development as a cross-cutting government priority. Second, the chapter explores recent advances and challenges related to the design and implementation of county- and local-level planning documents, while also considering the various incentives that could support implementation. Finally, the chapter assesses the monitoring and evaluation mechanisms supporting regional development, including how results from such processes are used to improve policy implementation.

This chapter examines how regional and local development is funded and financed in Croatia. First, it assesses the changes in subnational public finances in Croatia between 2010 and 2022, while outlining the implications for the country’s regional development. Second, it identifies the main EU and national government funding mechanisms supporting the implementation of Croatia’s regional development policy. Finally, the chapter proposes policy solutions to address five key challenges Croatia faces in mobilising and using funding and financing mechanisms.