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In line with the normative frame, the majority of Croatian islands are accounted as areas with unfavourable business/economic environment. Namely, island economies are mostly highly dependent on tourism, to a smaller part to agriculture and processing industry based on agricultural products. The pronounced depopulation is viewed as a result of the inexistence of economic base necessary for keeping the population on islands. Sustainable development, on the other hand, presumes not only environmental and socio-cultural sustainability but the economic one as well. Economic sustainability is the term used to identify various strategies that make it possible to utilize available resources to best advantage. In case of a business operations, economic sustainability calls for using resources in a way that enables the business to function over a number of years, while consistently returning a profit. On state, regional and local level, numerous measures of economic development stimulation for island economies have been introduced so far. As far as the governmental policies are concerned, they are to a large extent aimed at financial support of island-based business subjects. Such policy comes from the assumption that island business environment is more hostile compared to that of the mainland business entities and hence their access to the financial sources is limited. The main goal of this article is to analyze the effects of some governmental economic policy measures aimed at island economy stimulation dominantly through the non refundable forms of financial assistance and credit lines with favourable/stimulating conditions. For that reason a conceptual model of impact analysis is defined focusing on the distribution of financial stimuli according to the type of activities with the special stress on tourism as an important island activity. Furthermore, business performances of island firms that have used support programmes are analyzed. The results of the analysis are valuable in determining which economic activities have been the objects of entrepreneurial interest on Croatian islands as well as for revealing the effects of these policy measures. As such, it creates a valuable base for possible policy adjustments aimed at enhancement of the overall economic sustainability of Croatian islands.

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The effects of chosen governmental financial policy measures aimed at Croatian islands’ economic sustainability enhancement with special stress on tourism