Corruption and public procurement: example from Croatia

Social and economic aspects of transition processes have been the focus of theoretical and empirical study for about two decades. After the fall of communism and state-planned economic systems, new market and democratic government systems were introduced with controversial results. There is an abundant literature on institutional issues that emerged during those transition processes. Most researchers have argued that the success of the transformation is country-specific and path-dependent. The countries of the Western Balkans shared some problems with other transitional countries, yet have also been troubled by a series of conflicts with far-reaching consequences. Many Western Balkan problems have been direct products of the complex model of transition that was applied, as well as of the institutional vacuums and democratic deficits created in the wake of the collapse of state structures. The Western Balkan states have been stabilized politically as they put their efforts into accessing international integrations such as the EU and NATO. The integration process speeded up reforms, yet economies across the region still lag behind other transition countries and are losing competitive edge in the world market. The situation in the 1990s resulted in weak national legal structures providing fertile grounds for the emerging class of the ‘entrepreneur-oligarch’ including wartime and political loyalists, and those close to various networks of organized crime. This contributed to the phenomenon of ‘state capture’ in which the business of a country’s elite shapes the rules of the economic game and