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Governance and local economic development: In search of an appropriate governance structure in Croatia

Fostering local economic development in Croatia is primarily an administrative task of the 21 counties, the current units of regional self-government. However, it seems that some units of local self-government, particularly bigger cities, attract population and economic activity, and have therefore more strength and capacity in supporting economic development activities than counties. Also, counties are far too small to be considered as regions in the European context. This research will primarily question if the existing administrative-territorial setup and functions of counties, which derive from the related legislation, are corresponding to the needs of economic growth and development on local level. Accordingly, the focus of the paper will be on examining governance relations between bigger cities and counties in fostering local economic development in Croatia. Regional economic theory can also give some insights into spatial considerations of economic activities as well as the necessary governance structures. In this respect, some theoretical concepts that derive from trade theory, location theory and economic geography will be briefly reviewed. Based on the analysis of main local and regional data, it will be researched if the contemporary theoretical concepts are applicable in the Croatian context. In addition, through the discussion of a Croatian case on existing governance structures, qualitative insights on the appropriateness of the current situation will be presented. The main goal of this research paper is to find quantitative and qualitative justification for an appropriate governance structure for fostering local economic development in Croatia.

local governance; regional governance; local economic development; development capacity

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