Politics of Decentralization Policy: Explaining the Limited Success of Croatian Case after 2001

Abstract

The Croatian “decentralization package” from mid-2001 has shown how multiple pressures for shifting power to the local level may actually result in relative failure. The central government has ceded the control in particular policy sectors by shifting responsibilities for certain educational, welfare and health services to the counties and municipalities. However, the decentralization initiative was excessively marked as very limited and strongly labeled by the vertical policy dimension, expressing the dominance of top-down incentives of the central government in comparison to bottom-up initiatives stemming from the local government units. The 2001 decentralized package did not substantially increase the portion of local governments finance in total public finance, showing a failure to provide local government units with stronger fiscal capacity. The central government bodies also did not take into account the alternative proposals made by various policy actors ranging from academic institutions, researchers in NGOs, and associations of local government organizations. All these things have contributed to a relatively negligible influence of the horizontal policy dimension on the decentralization outcome. The whole process can therefore be described as centrally controlled decentralization, or decentralization from above.