engleski

Explaining the Patterns of Integration of Croatia into the European Economy: The Role of Competitiveness and Institution Building

The paper tackles the economic and institutional determinants of the process of economic integration of Croatia into the European Union and its current position in that process, and examines the competitiveness of the Croatian economy, especially in relation to the reforms related to economic integration and institutional change that have accompanied transition. On the one hand, a progressive integration in terms of international trade, foreign direct investments, and integration of financial markets can be observed. However, the performance of markets for products/services, labour, and capital indicate the suboptimality of integration processes due to weak competitiveness and institutional underdevelopment. Croatia has under-performed in areas such as institution building, privatisation and competitiveness, which are important drivers of economic integration. This has to some extent impeded the pace of integration of the Croatian economy into the European economy. On the other hand, it had much more pronounced consequences on the patterns of integration, economic structures that have emerged, and their implication for the future development of the economy and society. The emergent national innovation system and the system of corporate governance are crucial mechanisms influencing the capability of a country to develop a competitive private sector in high value added activities and thus maximise benefits from trade and financial liberalization and economic integration. The observed shortcomings in terms of competitiveness of the Croatian economy can thus to a large extent be attributed to the ineffective functioning of the national innovation system and the system of corporate governance.

competitiveness ; institution building ; European integration ; Croatia

nije evidentirano