Texas is a great example for Croatian transformation

Texas is a great example for Croatian transformation. Texas’ public policies have created good business climate with low taxes and low regulations. Texas does not have lots of natural riches and unused potentials as Croatia. Now we just have to ask where Croatia would be should it use its full potential? The key is to open opportunities for value creation and cutting the red-tape. We can learn successful examples of Texas.

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Daniel Hinšt, President of Center for Public Policy and Economic Analysis (CEA)

Texas is a great example for Croatian transformation. We could only wish the prosperity which Texas offers. Why are we so skeptical in Croatia? Even today we can believe in what is the best!


It was former governor Rick Perry who launched the transformation of Texas into even greater economic freedom. Rick Perry is known as “Americas’ Greatest Job Creation Governor”. If any Croatian politician needs free campaign guide, he/she can see this informative video for Texas story. Texas’ economic legacy is rich. It is a capital with which Texas has started its journey through 21st century. That capital is useful for regulatory fitness of public policies of Croatia when we want to achieve sound results.

Texas has less than one tenth of American population. Every third American job has been created in Texas. During the last financial crisis nearly every second American job was created in Texas. It is the economic freedom as a political brand that attracts entrepreneurs. Perry is active in circling other states to attract investors into Texas.

The Silicon Valley was created in California. Texas has become the Silicon Prairie. Northern Texas is a place of prosperity where entrepreneurial initiative is developed quickly. Residents of Northern Texas value the Protestant work ethic. They like taking individual responsibility for the prosperity of community. It is most notable for the Dallas-Fort Worth metroplex which welcomes many entrepreneurs. Good social system which values work and productivity has been created. Texas is a great example for Croatian transformation because we see that social problems are best solved by opening up business opportunities.

In front of the Center for public policy and economic analysis (CEA) we had the chance to attend the annual conference of the Economic Freedom Network. The Economic Freedom Network is organized by free market think tank Fraser Institute. The host was the Southern Methodist University in beautiful Dallas. One of the conference’s topics was a question Which Way America? – Economic Freedom or the Road to Serfdom? According to the new Fraser Institute’s report on economic freedom, United States have fallen to the 16th place. Texas is not as bad as the Union but the federal government has a bad influence on Texas.

We have also visited Texas Public Policy Foundation, the partner free market think tank which contributed the increase of economic freedom for Texans.

While U.S. federal government has raised taxes and bureaucracy, Texas opted for different story. The “Lone Star State” is one of those states which have many complaints to Washington which is more and more ruled by “progressive” central planners. Many Texans do not believe in central planning. Texans believe in the power of local initiatives of hard working individuals. The problem is federal regulation.

Texas is so called No Income Tax State (one out of seven in the United States). Texans do not pay income tax (personal or corporate income tax). Texas is so responsible towards its taxpayers that it does not permit the introduction of income tax. The state of Texas is mostly financed from 6% sales tax and property tax. Texas constitution forbids state level property tax, so it is only possible to collect property tax on local level.

Public service in Texas is not paid via collective agreements. Every public employees’ work is evaluated individually. Bureaucracy’s enlargement is forbidden and the administration is kept on a reasonable scale which is really needed for taxpayers. Texas does not have a minimum wage. Labor regulation enables the right to work without barriers.

Former governor Perry made sure to deregulate business Therefore Texas is among the best U.S. states for doing business. Texas is third in the economic freedom in North America. That is why we can say that Texas is a great example for Croatian transformation. Oil and energy are not main factors of Texan success. In comparison to other states, much lower taxes and regulations are the reason for Texan success. Energy sector deregulation has brought lower prices. Lower burden on the Texas business sector has made the conditions for free enterprise development and attracted many companies – even from California.

Despite the “progressive Nobel prize winner” Paul Krugman has been skeptical towards Texas economic model and because of it Texas works and opens new jobs. Texas is a great example for Croatian transformation in order to take a path towards economic freedom. The state of Texas has imposed itself restrictions in order to limit its power over its citizens in terms of taxes and regulations. Freedom which brings good living standard and new jobs is only made that way.

We need much less regulation and bureaucracy so that entrepreneurial initiative could be freer. We believe that Croatian entrepreneurs have the best solutions which can bring us very far. Texas offers a good a model for new practical experiences. Texas is a great example for Croatian transformation. Texas encourages us to learn to obey the Article 49 of Croatian Constitution.