Original scientific paper
https://doi.org/10.5559/di.20.2.01
The Relationship between Political Corruption and Public Investment – The Case of Croatia
Marijana BAĐUN
orcid.org/0000-0001-9645-1540
; Institute of Public Finance, Zagreb
Abstract
The goal of this paper is to show possible effects of political
corruption on public investment, with special reference to
Croatia. At the beginning of the paper the correlation
between public investment and corruption in the EU
countries is observed. Then the case of Croatia is analyzed,
where quality of infrastructure, size of capital public
expenditure, irregularities in public procurement, role of
government in the construction sector, and effects of
political corruption on public capital projects are considered.
The paper shows that countries with high public investment
have bigger (political) corruption. Despite the high share of
public capital expenditure in GDP, Croatia's infrastructure
is in a bad state. Judging by the size and the structure of
public investment, as well as weak control mechanisms,
there are plenty of opportunities for political corruption in
Croatian public capital projects, for which there are strong
indications that they are being used. Instead of investing
in new, highly visible projects, policy makers should direct
more attention and money towards maintaining and
improving the existing infrastructure, because in Croatia
billions of kunas are flowing away. Focusing on fighting
political corruption would have significant effects
on budget expenditure rationalization and economic
growth.
Keywords
corruption; public investment; infrastructure; Croatia
Hrčak ID:
69558
URI
Publication date:
15.6.2011.
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