The paper addresses the main changes in the Third Sector development in Croatia over the past 20 years, its main contours, changing role in social policy and service production, as well as its role in governance and relations with other sectors and stakeholders. The growing role and the impact of the Third Sector is illustrated in the examples of two service fields: care for the elderly and preschool education. Broader processes of decentralization, privatization and pluralization of service providers have opened space for Third Sector initiatives in the field of social services, where their growth is notable. However, unfavourable socio-political environment and low levels of trust in Third Sector organizations hinder their development and positioning in the social service system and in the governance arrangements. The system of service provision in Croatia is still not grounded in the principles of civicness and good governance, although improvements are noticeable. The practice of co-management and cogovernance based on greater involvement of Third Sector organizations is still in its early phase, and its future development will depend on policy improvements, but even more so on the potential for democratization and changes of the socio-cultural environment.
Keywords: Third Sector; Civil Society; Social Services; Governance; Croatia