Corruption and economic growth in Croatia

Today, more and more authors are involved in researching the economic phenomenon of corruption and its impact on many macroeconomic indicators. Nevertheless, transitional surroundings have offered a unique opportunity in history to explore the relationship between corruption and economic growth in entirely different environment from the one in developed western economies. Researching of, at first sight, two unrelated social phenomena gave additional light on the causes of economic growth in Croatia. The researching paper also gives Croatian position among ten transition EU member countries. The corruption perception index was used as the best measuring method of corruption in Croatia and other countries while economic growth was measured by GDP per capita instead of growth rates. We explained reasons why we did so. The time period covered by the research was from 1999 to 2009 for Croatia and from 1995 to 2009 for ten transition EU member countries. Total of 137 cases were evaluated. The researching paper demonstrates the negative impact of corruption on economic growth where the strength of its influence is relatively obvious. It is also evident that the impact of corruption on economic growth is substantially a direct one and that it takes place without a significant time delay. Results for the period of research related to Croatia, more closely fit the observed data of other transition countries. Corruption could be an additional explanation (certainly not the only one) for low or high level of GDP per capita in Croatia. Misunderstanding of all the factors that encourage the economic growth may lead to macroeconomic structural misbalances in Croatian economy.