COMPETITIVENESS OF CROATIA: THE ROLE OF BUSINESS ENVIRONMENT

Abstract

The purpose of this paper is to analyze the Croatian business environment quality, with the primary goal of identifying reforms needed for achieving the full potential of the private sector in stimulating national competitiveness. Using the specific competitiveness indictors – Global Competitiveness Index, Worldwide Governance Indicators and Doing Business – it is shown that the overall business environment in Croatia must be profoundly improved in order to become a driver of country’s competitiveness growth. Not only that for a decade Croatia stagnates on the competitiveness scales, but it also lags behind comparator countries selected for the purpose of the analysis in this paper (Romania, Bulgaria, Hungary and Poland). As the biggest opportunities for increasing competitiveness in Croatia are found to be in the tax system and property registration area, as well as in the area of contract enforcing which would involve a more systemic judicial reform.