Croatia

After more than a decade of transition, Croatia is the most developed economy in Southeast Europe, with the exception of Greece. This article discusses that development and how it led to a second transition that began in 2000. The first section deals with initial conditions, including the level of development, the Yugoslav legacy and the costs and benefits of independence. The second examines the main features of Croatia's first transition: economic liberalization, privatization and macroeconomic stabilization. The third section covers the path dependency this generated, as well as reforms of the second transition, followed by a conclusion.