INDICES OF ECONOMIC FREEDOM AS A MEASURE OF CROATIA’S INSTITUTIONAL CONVERGENCE TO THE EU

The paper deals with the relevance and applied usage of two different measures of economic freedom. Given the concept and liberal doctrine on which the indicators have been developed, the paper provides a comparative analysis of the Index of Economic
Freedom (of the Heritage Foundation) and the Index of Economic Freedom of the World (of Gwartney and Lawson). An insight into the structure components of both aggregate indices is followed by a review of scores for Croatia, in time and compared to the EU
countries. The results indicate the differences in evaluating the level of economic freedom in Croatia by two similar measures. That calls for a prudent interpretation and usage of economic freedom indicators. The concept of economic freedom indices supports the introduction of nominal system with no respect for the country institutional specifics. The paper argues that the measures of economic freedom stand as useful preliminary information
for international investors, yet are not to be used as relevant indicators of institutional quality achieved in the process of Croatia’s accession to the EU.