DFG Business Subproject



in Serbia and Croatia since 1990

As the Berlin Wall came down and the fall of communism began in Eastern and Central Europe in 1990, Serbia and Croatia held their first multi-party elections. The nationalist parties won the elections in both countries, and this paved the way for a bloody dissolution of the Yugoslav Federation.

The first multi-party elections brought economic changes as well. Both countries became economies in transition, meaning they abandoned the Yugoslav economic model of central planning and embraced, to a varied extent, a liberal economy.

This particular period of transition in combination with wars in the Balkans created a perfect setting for opportunistic political and economic elites to abuse their office. Checks and balances were practically non-existent (everything is allowed in love and war!), and elites were able to misuse their positions of power any way they wanted. This was especially the case in Serbia, where due to the UN sanctions and political and economic isolation, ruling elites turned to extreme behaviour that can be observed in famous corruption scandals such as money extraction to Cyprus and pyramidal scams dubbed ‘Dafina and Jezda’.

After the wars ended, both countries found themselves en route to actual democratization. In Croatia. this followed the death of Tuđman in 1999, while Serbia had to experience the fall of Milošević regime in 2000 in order to organise free elections. The democratization of these societies meant that political, economic, and war elites were to be included and integrated into political and economic life. Many of the controversial businessmen who acquired their wealth through looting and war profiteering became part of the democratically elected establishment in Serbia and Croatia. With these people included in political and economic processes, failure to reform these societies was inevitable. It is indeed true what they say: old habits die hard!

During the 2000s, both countries fought corruption with varied success. Croatia made more progress, which was rewarded with EU membership in 2013. This process required certain reforms that included more rule of law. Serbia, on the other hand, is a membership candidate, which leaves room for its elites to further abuse their political office and its economic actors to observe corruption and make their decisions accordingly.

As corruption is a social-economic construct, it may be perceived differently by different social groups. It is evident that what may be construed as corruption in Switzerland may be viewed as something completely different in Serbia. Finally, the perception of corruption among businesspeople is disparate to the perception of corruption among ordinary citizens. Therefore, we will seek to examine how businesspeople in Serbia and Croatia perceive corruption and how this perception influences their businesses. This study will explore corruption scandals and investigate how the business actors behave in the economic and political landscapes of Serbia and Croatia.

Finally, this study aims to answer questions such as: how do businesspeople in Serbia and Croatia view corruption? Do they perceive it as a positive or negative phenomenon? Or as a phenomenon with no valuative orientation? More specifically, how do business actors comprehend and assess the phenomenon of corruption? By answering these questions, we will be able to delve deeper into the correlation between the perception of corruption and business parameters, such as growth, competitiveness, innovation, etc. Finally, this study will be of benefit for other future empirical work in the field.

Barbara Frey (STE 1088/6-1)

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