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REGIONAL DEVELOPMENT IN THE REPUBLIC OF CROATIA AND HUNGARY: CURRENT SITUATION AND FUTURE PERSPECTIVES

Regional development has become one of the most challenging issues in the era of globalization, which shifts increasingly greater responsibility for economic growth and development from the nation-state to the region. In terms of GDP per capita, production growth, employment, etc. uneven regional development represents in the long-run one of the greatest obstacles in sustainable development of national economy. Bearing all economic and social consequences of regional disparities in mind, balanced regional development has become one of the most important guidelines of the European Union, which uses one-third of its budget through its cohesion policy in order to reduce existing regional disparities. Central and Eastern European Countries (CEECs) such as the Republic of Croatia, Hungary, Poland, Slovakia or the Czech Republic, are all witnessing the rise of regional inequalities within their borders. Thus, national governments have become increasingly aware of the role of regional development and the necessity to define coherent regional development policies. This paper focuses on the Republic of Croatia and Hungary. In most respects Croatia and Hungary bear a close resemblance to one another especially in terms of regional disparities/inequalities. Both countries have already strongly acknowledged the value of regional development and the importance of reducing regional disparities. Consequently, they have been developing the institutional and organizational framework to promote even regional development. However, in both countries government policies and programs still have much room for improvement. The purpose of this paper is to analyze regional development and policies in the Republic of Croatia and Hungary in the context of the EU effort to promote economic and social cohesion with the ultimate goal of reducing regional disparities across 271 various regions. The statistical analysis of regional inequalities in both countries will be supported by descriptive statistics of the causes of uneven regional development considering various elements of regional disparities such as economic, social, spatial, and the like. Furthermore, the regional policy instruments focusing on issues such as regional competitiveness, the role of regional and local actors in managing development, etc. will be discussed. The paper will conclude by selected suggestions/guidelines for improvement of the current policy approach.

regional development, regional disparities, regional policy, regional competitiveness, Croatia, Hungary

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