Fostering local economic development in Croatia is primarily an administrative task of the 21 counties, the current units of regional self‐government. However, the big cities alone succeed in attracting population and economic activity, and have therefore
more strength and capacity to support economic development than other counties. Also, counties are small regions by European standards. The analysis shows that the existing administrative‐territorial setup and functions that derive from the relevant legislation in
Croatia do not match the needs of economic growth and development at the local level. The situation could be improved by a clarification in the responsibilities of the counties, the establishment of sound governance mechanisms, a local statistics base and the recognition
of the development role of the urban centres.