Croatia

   

Policy Performance

#35

Economic Policies

#40
Despite a number of notable gains, Croatia’s overall score for economic policies places it in the bottom ranks (rank 40) in international comparison. Its score on this measure has improved by 0.6 points since 2014.

Several years of robust growth have helped ease the pain of a long recession. Public debt levels remain high, but deficits have been reduced to moderate levels, and the country has exited the EU’s excessive deficit procedure. Little progress has been made with regard to economic reforms.

Unemployment rates have fallen substantially from very high levels. However, this is largely due to labor emigration, and long-term unemployment remains a problem. Employment rates are low but rising. Labor demand is skewed toward low-skilled jobs, driving university graduates abroad.

A newly implemented taxation package has made the tax system more transparent and competitive. However, the personal-income tax is less progressive, limiting redistributive effects. A planned property tax has been postponed. Both private and public R&D investment rates are very low.

Social Policies

#34
With significant inclusion concerns, Croatia scores relatively poorly overall (rank 34) in the area of social policies. Its score on this measure has improved by 0.1 point relative to 2014.

The education system is inefficient, with outcomes lagging behind EU standards. A curriculum reform is underway, with a particular focus on improvements in STEM subjects. Poverty and social exclusion are major problems. Some war-affected areas have not yet recovered economically.

The health care system is inclusive, but quality varies widely by region, and the system runs deficits. An alarming number of medical professionals have left the country since EU accession. Labor-market discrimination against younger women and women with children is widespread, and women’s employment rates are low. Child allowances are rising, and new measures will increase child care availability and extend afternoon child care.

Recent reforms have improved pension-system sustainability, but pensioner poverty rates are high. Reintegration of ethnic-Serbian returnees remains a problem. The country has hardened its border policies, and made it illegal to assist irregular migrants in accessing basic needs except in case of emergencies.

Environmental Policies

#20
With new programs in the early phases of implementation, Croatia receives middling overall scores (rank 20) with regard to environmental policies. Its score in this area has declined by 0.1 point relative to 2014.

The country’s environmental policy has been strongly shaped by EU accession. Waste management, water management and air quality are the most important issues. However, program implementation has been slow, with a medium-term waste-management plan passed only after the initiation of EU legal action.

The country supports U.N. environmental programs, and works closely with the European Union on related issues. It has reduced its emissions of greenhouse gases, with renewable sources accounting for a 20% share of energy consumption.

Democracy

#34

Quality of Democracy

#33
While electoral procedures are largely fair, Croatia receives comparatively low scores (rank 33) with regard to quality of democracy. Its overall score in this area has improved by 0.2 points relative to 2014.

New media-access laws remove private broadcasters’ obligation to cover campaigns, and allow public broadcasters to cover candidates more selectively. Recent campaign-finance laws have increased transparency, but enforcement is difficult, with many means of evading legal restrictions available. Public funding of parties has been reduced.

The government has intensified control over the public media, with controversial journalists fired and critical programs discontinued. Access to government information has substantially improved. Civil rights are formally protected, but Roma and ethnic-Serbian citizens face discrimination. Domestic war-crimes prosecutions remain biased.

Regulation is sometimes inconsistent and changes often. A judiciary reform effort has been abandoned. Courts lack independence, often acquitting prominent individuals accused of corruption. Judicial appointments are politicized.

Governance

#39

Executive Capacity

#39
With its unstable political environment, Croatia falls into the bottom ranks internationally (rank 39) with respect to executive capacity. Its score in this area has declined by 0.3 points relative to its 2014 level.

Conflicts within the first Plenković government led to a collapse of the initial coalition. The new government resulted in new ministers, but the cabinet structure remained unchanged. Incentives for ministers to implement the government’s program remain weak.

While strategic-planning capacities have grown since EU accession, policymaking continues to be dominated by short-term political interests. A unit in the Prime Minister’s Office carries out policy coordination and monitoring, but has limited analytical capacities. Line ministries possess considerable autonomy in drafting proposals, with informal coordination playing a key role.

EU accession has spurred RIA development, though assessment obligations are only selectively met, and RIAs as yet have little impact on regulatory plans. Consultation with outside stakeholders has been limited. A proposal to reorganize the public administration structure was never implemented.

Executive Accountability

#35
With several notable weaknesses, Croatia scores relatively poorly (rank 35) with regard to executive accountability. Its score on this measure is unchanged relative to its 2014 level.

Citizens’ policy knowledge is on average comparatively limited. While most media are focused on entertainment, a few newspapers do provide good coverage of political and economic affairs. Independent, objective broadcasters are capturing market share from the partisan public broadcaster.

Parliamentarians have limited resources. Formal oversight powers are sufficient, with a conflict-of-interest body proving particularly effective. The Audit Office is independent with a wide-ranging scope of activity, but the government tends to react slowly to Ombudsman requests.

Political parties are dominated by their leadership ranks. Economic-interest organizations are influential, but most have lacked the will or capacity to develop their own proposals. A number of other interest organizations have sophisticated policy-development capabilities.
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