At a club level there’s no contest - our domestic leagues are usually ranked higher in the UEFA coefficient than Croatia’s and traditionally we’ve had greater success in Europe. We are at a slight disadvantage re our restricted ability to field emigre players (ie had Eduardo Da Silva signed for, say, Dundee United rather than Dynamo Zagreb he would not have been eligible for Scotland so easily) but I do not believe this has impacted us significantly. Though we are losing players to Ireland due to stupid self-inflicted eligibility rules at schools level - James McCarthy and Aiden McGeady opting to play for Ireland still saddens me to this day.
I've heard talk of poorer countries turning out better players because at a crucial age (14-18) when you're choosing to commit to professional football you're basically choosing between rolling the dice at a professional career in football, or a more realistic longer term career through learning a trade or heading to university. And in this situation, it could be that the risk/reward is higher in somewhere like Croatia, Brazil or Argentina. But this doesn't explain why other small high-income countries like Denmark, Sweden, Belgium, Switzerland are routinely competing at a higher level than we are.
If I was a director at the Scottish Football Association I’d be closely studying what these countries are doing differently because there’s something we are desperately missing. I have my thoughts, but I'm just another armchair analyst with no power so it makes little sense to share them :)
Croatia has basketball, but the talent pools for basketball and football do not overlap. Then, we are talking here about national teams. At the club level, the performance of teams from Denmark, Sweden, Belgium, Switzerland is far from that of teams from the most, football-wise, prestigious countries.
[0] - I actually read a while back that Cricket had more registered players than Rugby in Scotland, but I take this with a pinch of salt. But make no doubt about it, our sporting focus is roughly similarly focussed on Football to Croatia's.
If Scottish club football is the pinnacle for Scottish players then this may be a factor?
That said, you may have a point. Many Scots boys grow up idolising Celtic or Rangers. It could be that many get signed for their boyhood club and choose to remain there, even if a club who is better for their long-term development is interested.