Perceived Corruption and Informality among Croatian Businesspeople

Abstract

The pervasiveness of corruption in Croatia is documented by corruption perception indicators and surveys, yet there is no comprehensive knowledge about corruption and informality in the private sector. This quantitative study uses primary survey data of Croatian business actors to determine business perceptions and attitudes towards corruption and informality. The results show that Croatian businesspeople express low trust in institutions, but do not see them as obstacles to doing business. Similarly, Croatia’s EU membership is perceived as insignificant in the fight against corruption and informality. The SMEs are allegedly suffering more due to corruption, whereas the large companies are seen as the main generators of corruption. Corrupt behaviour and informal practices in everyday business are more accepted and used by the owners and managers working in small and micro firms. This study thus contributes to research on doing business and managerial behaviour and offers policy recommendations to mitigate the harmful effects of corruption and informality.