Relationship between regional disparities and national growth in Croatia

Purpose : This paper analyzes the applicability of Williamson’s inverted U-curve hypothesis to Croatian regional development from 2000 to 2021. According to the theories of Kuznets (1955) and Williamson (1965), regional disparities tend to increase initially and then decline as economic development progresses. This phenomenon, known as the Kuznets-Williamson hypothesis, serves as the foundation for this study, which aims to test its validity in the context of the development of the Croatian counties from 2000 to 2021. Methodology: This paper employs Pearson’s correlation coefficient to examine the relationship between regional disparities, measured by the coefficient of variation, and economic growth, measured by the annual growth rate of national GDP per capita. Results: The results of the analysis confirm the validity of the Kuznets-Williamson hypothesis in the case of Croatia. During the first phase of economic growth (until 2010), regional disparities increased, while in the second phase (from 2010 onwards), they decreased. Evidence of β-convergence (2015-2021) suggests that poorer regions grew faster, reducing the development gap. Conclusion : Regional disparities in Croatia from 2000 to 2021 follow the Kuznets-Williamson hypothesis, i.e. disparities increased until 2010 and declined thereafter. Additionally, Zagreb’s economic dominance played a key role in regional disparities, particularly between 2000 and 2014. However, after 2014, regional disparities decreased despite a slight increase in Zagreb’s dominance, an outcome that is somewhat unexpected. The stronger integration of Croatia into the European Union may have played a crucial role in accelerating the growth of poorer counties and reducing regional disparities.