Corruption as an Obstacle for Doing Business in the Western Balkans: A Business Sector Perspective

Jelena Budak () and Edo Rajh

No 1104, Working Papers from The Institute of Economics, Zagreb

Abstract: This paper investigates business people’s perceptions of corruption as an obstacle for doing business and their attitudes towards corruption. It is based on a survey conducted on the sample of over 1800 business owners and managers in the Western Balkans region. Using the original survey data collected in 2010 for seven countries – Albania, Bosnia and Herzegovina, Croatia, Kosovo, FYR Macedonia, Montenegro and Serbia – the paper explores business people’s views on the ways in which the business sector is dealing with corruption as well as on the perceived role of private and government agents in curbing corruption. The factor analysis produced three distinct factors: (1) Understanding corruption as “grease in the wheels”; (2) Individual action can contribute to the curbing of corruption; (3) Corruption is a government-related issue. The main research question was whether the respondents’ attitudes towards corruption are related to the following variables: country of origin, their own corruption experience, perceptions of corruption as an obstacle for doing business and the general corruption prevalence trends. The results of the analysis of variance show that the country of origin strongly determines business people’s attitudes on corruption. Respondents with corruption experience tend to justify corruption as “grease in the wheels” more than “clean” respondents. Business people who believe that corruption is on the rise or that it poses a big obstacle for their business put greater emphasis on the government dealing with the issue of corruption than on individual or private anti-corruption initiatives. The findings provide useful policy recommendations for countries in the Western Balkans region to design a more entrepreneurship-friendly environment.

Keywords: corruption; business sector; attitudes and perceptions; corruption experience; Western Balkans (search for similar items in EconPapers)
JEL-codes: D22 D73 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-12
New Economics Papers: this item is included in nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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