The dilemma over Washington consensus guidelines or industrial policy: Lessons from Croatia
In: Notitia: časopis za održivi razvoj : journal for sustainable development, Band 6, Heft 1, S. 49-62
ISSN: 1849-9066
During the 1990s Croatia went
through the process of transition to market economy mostly following the
Washington Consensus policy guidelines. Since the period before the last global
financial crisis, Croatia has shown almost no convergence to developed European
Union member states and has been among the least developed ones. This paper examines
the causes of Croatian development lag, while providing an overview of contemporary
development policies and international production fragmentation trends that
affected them. The paper points out to several important factors that shaped
the Croatian development path. Expectations from foreign capital were
overrated, as the foreign direct investment consisted mainly of brownfield
investment in large monopolistic companies and was rarely directed to
export-oriented sectors. Accession to the World Trade Organisation was followed
by stronger growth of imports than exports and joining the European Union did
not bring economic growth as fast as expected. Lack of industrial policy implementation
has led Croatia to deindustrialisation and increasing importance of the tourism
sector as a form of the Dutch disease.