Governance and Local Economic International Conference on «Local Development and Governance in Central, East and Development: In search of an appropriate South-East Europe», governance structure in Croatia OECD LEED Trento Centre for Local Development Trento, Italy, 6-8 June 2005 1. Theoretical basis for local and regional economic development 2. The institutional framework for local Governance and Local Economic Development: economic governance in Croatia In search of an appropriate governance structure in Croatia 3. Local economies and economic governance in Croatia Authors: 4. Fiscal capacities for local economic Ivana Rašić Bakarić ([email protected]) Marijana Sumpor, MSc ([email protected]) - presenter development Jelena Šišinački, MSc ([email protected]) 5. Conclusion - local economic governance Institute of Economics, Zagreb, Croatia structures in Croatia (www.eizg.hr) 2 1 1.1 Specificities of locations in 1.2 Governance and good local regional development theory governance defined fundaments of contemporary regional governance - “the exercise of political, development theory - concentration and economic and administrative authority to manage agglomeration, importance of institutions and a society's affairs” (UNDP, 1997) structural considerations good governance - emphasis on characteristics Recognition of economic importance of certain reflecting values and principles, norms and locations (regions) and their developmental practices that derive from putting people first and effects/impacts on the surrounding territory at the centre (positive & negative) good local governance - institutional system focus has shifted towards complex relations of for managing local public affairs, characterized by competitiveness, cohesion and sustainability three dimensions: performance, participation, partnership (“3 P”, Romeo, 2002) 3 4 2 1.2 Governance and good local 2.1 The administrative-territorial governance defined – cont. structure of local governments in Croatia government became more variegated within 1992 – Law on local self-government and different levels of government (Carmichael, 2002) government (cities and municipalities, counties - dual status) horizontally differentiated, provided by multiple agencies; vertically differentiated, conducted on multiple levels 2001 - new Law on Local and Regional Self- Government (LLRSG) multi-level governance stresses the complexity of policy making, implementation and regional self-government – 20 counties + city of Zagreb responsibilities among different governmental and local self-government – 124 cities/towns and 426 municipalities (CBS, 2004) societal actors in their activities on different levels Main changes: new role of counties – dual Changes in governing towards multi-level status abolished, new deconcentrated offices of governance are a result of changes in the modes national government on county level and nature of public sector activities 5 6 3 2.2 The territorial size and population of the units on different government levels Croatia - continental surface th. km Total population 2 Max. Adriatic Sea; of Medjimurje (162 inh./km ConcentrationMin. –1. city of Zagreb (1,217 inh./km Zagreb, Split, Rijeka, Osijek Differences in –CountyGDP of Lika-Senj (10 inh./km 4 counties 4.4 mil.; a (8%), Split-Dalmatia (8%) and Istria (6%) of inhabitants in 4 cities (>100,000):56.5 th. km : City of Zagreb (30%), Primorje-Gorskiverage Kotar density 2 ); - 53% of national GDP produced in 2 and 31.4 2 ); 2. 78County inh./km 2 ) 2.2 The territorial size and population of the units on 2 No. of inh./kmdifferent government levels 180 2 160 162 140 Population density and % of population in county centres (2001) 120 147 100 80 60 116 40 7 102 20 101 0 87 Densit y: City of Zagreb Međimurje/ Čakovec 85 Varaždin/ Varaždin 1,217 84 Krapina-Zagorje/ Krapina inh./km Spl it-Dalmatia/ Split 80 2 Zagreb county/ Veli ka Gorica 73 72 Slavonski Brod-Posavina/ Sl. Brod Pr imorje-Gorski Kotar/ Rijek 69 Vukovar-Sirmium/ Vinkovci Osijek-Baranja/ Osijek 50 Istria/ Pula 47 Koprivnica-Križevci/ Koprivnica 46 50% Dubrovnik-Neretva/ Dubrovni 44 42 Bjelovar-Bilogora/ Bjelova 40% Požega-Slavonia/ Požega 39 Virovitica-Podravina/ Virovitica 30% Zadar/ Zadar 38 20% County-density Sisak-Moslavina/ Sisak 10 Karlovac/ Karlovac 10% Šibenik-Knin/ Šibenik Lika-Senj/ Gospić 0% County centre -Inhabitants 8 4 2.3 Functions of local governments – 2.3 Functions of local governments cont. LSGs should perform tasks of local importance, LLRSG only lists mandatory functions of local which directly address the needs of citizens, and and regional self-governments which are not assigned to state bodies by the Details on actual responsibilities of levels of Constitution or by law; government defined in broad number of RSGs should perform tasks of regional importance, special laws, by-laws, regulations and cities >30,000 inhabitants can provide services that are county responsibility, if they have As many responsibilities are shared between sufficient resources for their provision levels of government, implementation problems Economic development, as a task is not on local level are common due to unclear explicitly a task of local self-governments, but a definition, lack of communication, frequent task of counties (RSG), while many LSGs are changes or financing is not ensured active in economic development 9 10 5 3.1 Employment and active companies across sectors and counties 400000 350000 300000 250000 200000 Croatia - Active population by counties (2001) 150000 100000 50000 0 City of Zagreb Split-Dalmatia Zagreb county Primorje-Gorski Kotar Osijek-Baranja Istria Vukovar-Si rmium Varaždin Sisak-Moslavina Slavonski Brod-Posavina Krapina-Zagorje Zadar Bjelovar-Bilogora Karlovac % Međimurje 35 Koprivnica-Križevci 30 31,0 Dubrovnik-Neretva 25 Šibenik-Knin 27,7 20 Virovitica-Podravina Croatia - Unemployment rates by counties (2001) 26,5 Požega-Slavonia 15 Lika-Senj 26,0 10 25,1 25,1 Counties11 5 0 24,2 23,7 Šibenik-Knin 23,5 Zadar 22,6 Vukovar-Sirmium Split-Dalmatia 20,2 Slavonski Brod-Posavina 19,7 19,6 Sisak-Moslavina Osijek-Baranja 17,1 Dubr ov ni k -Ner etva Karlovac 16,8 Lika-Senj 16,5 16,5 Virovitica-Podravina Požega-Slavonia 15,9 15,9 Primorje-Gorski Kotar Zagreb county City of Zagreb 13,5 Istria 12,1 Varaždin Bjelovar-Bilogora Koprivnica-Križevci Krapina-Zagorje Međimurje Counties 12 6 Šibenik-Knin - Employment structure by sectors (2001) Šibenik-Knin - Legal entities by sectors (2001) Croatia - Employment structure by sectors (2001) Croatia - Legal entities by sectors (2001) Agr icult ur e Public sector Agri cultur e Agr icultur e Public sector Agr icult ur e 3% Public sector services 1% Public sector 2% services 2% Manufacturing Manufacturing services Manufacturing 30% services Manufacturing 24% 26% 29% 14% 13% 14% 12% Services Services Services Services 44% 71% 43% 72% City of Zagreb - Employment structure by sectors (2001) City of Zagreb - Legal entitities by sectors (2001) Virovitica-Podravina - Employment structure by sectors Virovitica-Podravina - Legal entitites by sectors (2001) (2001) Public sector Agr icult ur e Agr icult ur e Agri culture Manufacturing services 1% 3% Agri culture 5% 23% Public sector Manufacturing Public sector Manufacturing 12% 26% services 11% Public sector services 18% Manufacturing 19% services 21% 41% 21% Services Services Services Services 50% 1367% 14 26% 56% 7 Sisak-moslavina - Employment structure by sectors (2001) Public sector services 23% Agriculture 3% Manufacturing 44% Services 30% Sisak-moslavina - Legal entities by sectors (2001) Public sector services 14% Agriculture 1% Manufacturing 3.2 Economic performance on county level 11% 8.000 Regional GDP per capita (USD) and Export/Import of goods - coverage (2001) 7.000 6.000 Services 5.000 74% 4.000 3.000 2.000 1.000 15 0 City of Zagreb Istria Primorje-Gorski Kotar Koprivnica-Križevci Varaždin Dubrov nik-Neretva Sisak-Moslavina Karlovac Međimurje Lika-Senj Virovitica-Podravina Krapina-Zagorje RGDP (000 USD) Bjelovar-Bilogora Osijek-Baranja 2,50 Split-Dalmatia 2,00 Požega-Slavonia Zadar 1,50 Coverage (EX/IM) Zagreb county 1,00 Šibenik-Knin 0,50 Slavonski Brod-Posavina Vukovar-Sirmium 0,00 16 8 3.2 Economic performance on county level 600 607 500 535 400 529 Trade in Goods - Exports 300 387 200 100 355 287 Exports:City 1,486 of mil.Zagreb USD Imports: 3,641 mil. USD 0 119 & Imports in 112 Istria 210 Primorje-Gorski Kotar 173 24 53 mil. USD (2001) Koprivnica-Križevci 160 Varaždin 93 136 174 Dubrovnik-Neretva Sisak-Moslavina 486 148 280 Karlovac 4 267 57 142 Međimurje 2 32 266 Lika-Senj 471 52 70 Virovitica-Podravina Krapina-Zagorje Bjelovar-Bilogora 49 Osijek-Baranja 30 45 89 95 Split-Dalmatia 3.3 Local economic governance in 103 Požega -Slavonia 68 Croatia Zadar 58 67 Zagreb county 42 50 Šibenik-Knin Legislation – prepared, adopted and managed at Sla vonski Br od- Posavina national level Vukovar-Si rmium Implementation – top-down Exports institutions, government offices) 17 or LSGs Imports Economic development programmes - implementation managed across levels of government SMEs – domain of LSGs and RSGs big industry – domain of the national government (deconcentrated national or delegated to RSGs 18 9 4.1 Fiscal analysis based on the 4.2 Fiscal capacity of the local consolidated general government data government in Croatia LSGs that are more developed and have economic On aggregate level for all LSGs, the share of cities/ advantages due to concentration of businesses are towns in total revenues was 73% and counties