Croatian co-operatives’ story of revival: Overcoming external obstacles

Abstract

While in many European countries co-operative entrepreneurship manages to fulfill its economic and social functions successfully, in Croatia a large majority of almost 1200 registered co-operatives struggle hard to accomplish in demanding market conditions while sustaining their social dimension and few succeed. Only 19% of co-operatives accounted for 96% of overall income earned by Croatian co-operatives in 2015. We critically examine obstacles related to external legal, policy, infrastructural and other conditions that are either insufficient, completely missing or, if existent, adversely affect co-operatives. The obstacles were indicated by co-operatives themselves in a qualitative research project conducted between September 2017 and March 2018. We offer two possible explanations for the existence of the obstacles: one concerning immaturity of the Croatian institutional system, the other related to cronyism pervading the system. We see bottom-up integration of the co-operative sector, based on the principle of co-operation among co-operatives, as the best way of moving forward.