Long-Term Trends in Croatian GDP Growth

  • Anita Čeh ČasniEmail author
  • Petra Palić
  • Maruška Vizek
Part of the New Perspectives on South-East Europe book series (NPSE)


We analyze the long-term trends in Croatian income convergence with respect to the EU. Croatia is the worst performer among new EU members in terms of β-convergence. Stochastic income convergence tests with breaks suggest Croatia is not able to catch up to old EU members, but could still diminish the difference between Croatian and new EU members’ income levels over the long term. Analysis of Croatian gross domestic product (GDP) and gross value added (GVA) growth drivers suggests services-led growth fueled by investments in nontradable sector and government consumption contributed to the observed income divergence as new EU members grew faster, dominantly drawing from the personal consumption, international trade and manufacturing growth. Deindustrialization and technological downgrading of the tradable sector also contributed to slower GDP growth in the observed period.


Income Convergence Income Variable Worst Performers Central And East European Countries (CEEC) Croatian Economy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Acemoglu, D., Johnson, S., & Robinson, J. A. (2004). Institutions as the Fundamental Cause of Long-Run, NBER Working Paper No. 10481. Downloaded 2 May 2017.
  2. Bađun, M., Pribičević, V., & Deskar-Škrbić, M. (2014). Government Size and Efficiency as Constraints to Economic Growth: Comparing Croatia with Other European Countries. Post-Communist Economies, 26(3), 297–323.CrossRefGoogle Scholar
  3. Barro, R. J. (1991). Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics, 106(2), 407–443.CrossRefGoogle Scholar
  4. Baumol, W. J. (1986). Productivity, Growth, Convergence, and Welfare: What the Long-Run Data Show. American Economic Review, 76, 1072–1085.Google Scholar
  5. Bennett, J., Estrin, S., & Urga, G. (2007). Methods of Privatization and Economic Growth in Transition Economies. Economics of Transition, 15(4), 661–683.CrossRefGoogle Scholar
  6. Berg, A., Borensztein, E., Sahay, R., & Zettlemeyer, J. (1999). The Evolution of Output in Transition Economies: Explaining the Differences, International Monetary Fund Working Paper No. 99/73.Google Scholar
  7. Böwer, U., & Turrini, A. (2010). EU Accession: A Road to Fast-Track Convergence? Comparative Economic Studies, 52(2), 181–205.CrossRefGoogle Scholar
  8. Campos, N. F., & Coricelli, A. (2002). Growth in Transition: What we Know, What we Don’t, and What we Should. Journal of Economic Literature, 40(3), 793–836.CrossRefGoogle Scholar
  9. Cheptea, A. (2007). Trade Liberalization and Institutional Reforms. Economics of Transition, 15(2), 211–255.CrossRefGoogle Scholar
  10. Darvas, Z. (2010). Beyond the Crisis: Prospects for Emerging Europe, Bruegel Working Paper 2010/06. Downloaded 2 May 2017.
  11. De Melo, M., Denizer, C., & Gelb, A. (1996). From Plan to Market: Patterns of Transition, The World Bank, Policy Research Working Paper No. 1564.Google Scholar
  12. De Melo, M., Denizer, C., Gelb, A., & Tenev, S. (2001). Circumstance and Choice: The Role of Initial Conditions and Policies in Transition Economies. The World Bank Economic Review, 15(1), 1–31.CrossRefGoogle Scholar
  13. Drezgić, S. (2011). Public Investments and Regional Income Convergence: Empirical Analysis of Croatian Regions. Social Research, 3(24), 43–55.Google Scholar
  14. Eicher, T. S., & Schreiber, T. (2010). Structural Policies and Growth: Time Series Evidence from a Natural Experiment. Journal of Development Economics, 91(1), 169–179.CrossRefGoogle Scholar
  15. Falcetti, E., Raiser, M., & Sanfey, P. (2002). Defying the Odds: Initial Conditions, Reforms, and Growth in the First Decade of Transition. Journal of Comparative Economics, 30(2), 229–250.CrossRefGoogle Scholar
  16. Franičević, V., & Kraft, E. (1997). Croatia’s Economy After Stabilisation. Europe-Asia Studies, 49(4), 669–691.CrossRefGoogle Scholar
  17. Hall, R. E., & Jones, C. I. (1999). Why do Some Countries Produce so Much More Output Per Worker Than Others? The Quarterly Journal of Economics, 114(1), 83–116.CrossRefGoogle Scholar
  18. Havrylyshyn, O., & Van Rooden, R. (1998). Recovery and Growth in Transition Economies 1990–97: A Stylized Regression Analysis, IMF Working Paper No. 98/141.Google Scholar
  19. Hossain, A. (2000). Convergence of Per Capita Output Levels Across Regions of Bangladesh, 1982–97, IMF Working Paper 2000/121.Google Scholar
  20. Islam, N. (2003). What Have we Learnt from the Convergence Debate? Journal of Economic Surveys, 17(3), 309–362.CrossRefGoogle Scholar
  21. Kolodko, G. W. (2000). From Shock to Therapy: The Political Economy of Postsocialist Transformation. Oxford: Oxford University Press.CrossRefGoogle Scholar
  22. Kornai, J. (1998). From Socialism to Capitalism: What Is Meant by the Change of System? London: Social Market Foundation.Google Scholar
  23. Kornai, J. (2000). Ten Years After ‘The Road to a Free Economy’: The Author’s Self-Evaluation. Annual Bank Conference on Development Economics, 2000, 49–66.Google Scholar
  24. Kornai, J. (2006a). The Great Transformation of Central Eastern Europe. Success and Disappointment. Economics of Transition, 14(2), 207–244.CrossRefGoogle Scholar
  25. Kornai, J. (2006b). The Great Transformation of Central Eastern Europe: Success and Disappointment-First Published. Montenegrin Journal of Economics, 2(4), 11–38.Google Scholar
  26. Nuti, D. M., & Portes, R. (1993). Central Europe: The Way Forward. Economic Transformation in Central Europe: A Progress Report, 1–20.Google Scholar
  27. Podkaminer, L. (2013). Development Patterns of Central and East European Countries (in the Course of Transition and Following EU Accession). Vienna: Verein Wiener Inst. für Internat. Wirtschaftsvergleiche (WIIW).Google Scholar
  28. Quah, D. (1993). Galton’s Fallacy and Tests of the Convergence Hypothesis. The Scandinavian Journal of Economics, 95(4), 427–443.CrossRefGoogle Scholar
  29. Rodrik, D., Subramanian, A., & Trebbi, F. (2004). Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development. Journal of Economic Growth, 9(2), 131–165.CrossRefGoogle Scholar
  30. Roland, G. (2000). Transition and Economics: Politics, Markets, and Firms. Cambridge: MIT Press.Google Scholar
  31. Schweickert, R., Melnykovska, I., Belke, A., & Bordon, I. (2011). Prospective NATO or EU Membership and Institutional Change in Transition Countries. Economics of Transition, 19(4), 667–692.CrossRefGoogle Scholar
  32. Stojčić, N., Benić, Đ., & Karanikić, P. (2012). Regional Determinants of Export Competitiveness in Croatian Manufacturing Industry. Proceedings of Rijeka Faculty of Economics: Journal of Economics and Business, 32(2), 193–212.Google Scholar
  33. Tkalec, M., & Vizek, M. (2009). The Impact of Macroeconomic Policies on Manufacturing Production in Croatia. Economic Trends and Economic Policy, 121, 61–92.Google Scholar
  34. Tkalec, M., & Vizek, M. (2014). Real Estate Boom and Export Performance Bust in Croatia. Proceedings of Rijeka Faculty of Economics: Journal of Economics and Business, 32(1), 11–34.Google Scholar


  1. Eurostat database, GDP per capita. Downloaded 24 April 2017.
  2. FINA database. (2000–2015). agregati po djelatnostima.Google Scholar
  3. Maddison database. (2013). The Maddison-Project. Downloaded 24 April 2017.
  4. Wiiw, GDP. Downloaded 25 April 2017.
  5. Wiiw, Wages. Downloaded 25 April 2017.

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Anita Čeh Časni
    • 1
    Email author
  • Petra Palić
    • 2
  • Maruška Vizek
    • 2
  1. 1.Faculty of Economics and BusinessUniversity of ZagrebZagrebCroatia
  2. 2.The Institute of EconomicsZagrebCroatia

Personalised recommendations