Corruption in Croatia: A
Short Guide for Visitors
Corruption: The six phases
• 1990–1995 War and Corruption
• 1995-1999 Cohabitation with
• 2000–2003 The Time of
• 2003-2006 The return to issue
• 2006-- War against
1. CPI index
2. Corruption barometar
3. Public opinion
4. Public Scandals
5. Economic indicators
Position on the list
Position 70 from 159
2004 2003 2002 2001 2000
3,5 3,7 3,7 3,9 2,7
-0,2 -0,2 -0,4 +0,8
2005 (3,4) (0,44)
2004 2003 2002 2001 2000
67 from 59 from 52 from 47 from 91 77 from
146 133 102 90
(0,45) (0,51) (0,86)
Corruption in Croatia:
Beyond the facts
• CPI contribute to a knowledge map on
which policy action can be taken.
– No single index contains the concept in its
• To provide a cardinal or ordinal index as a
basis for comparison.
• Common units does not imply
comparability of meaning.
BEEPS World Bank
Maeasure of SC
Nations in Transit 2006
GfK Septembar 2006
We live in a corrupt state.
Czech Republic 52
0 10 20 30 40 50 60 70 80 90
CEE AVERAGE: 69%
Nations in Transit
Numerous surveys highlight the public perception that corruption has actually gotten worse over
the past year. According to the European Bank for Reconstruction and Development's 2005
Transition Report: "Croatia was among the few transition countries (Hungary, Azerbaijan,
Armenia) in which corruption in 2005 was higher than in 2002."
Transparency International indicates in its Corruption Perceptions Index for 2005 that Croatia has
dropped three places from the previous year, which places it in the company of Burkina Faso,
Egypt, and Syria.
Citizens feel that corruption is especially widespread among political
parties, in the judiciary, and in representative bodies. On a scale of 1 to
5, with 5 representing total corruption, political parties scored a grade
of 4, followed closely by representative bodies with 3.9 and the
judiciary with 3.8.
Citizens evaluated NGOs, the military, and the church as being the least corrupt.
Hospitals were among the institutions with the worst reputations. Agence France-Presse reports that 90
percent of Croatians feel that bribing doctors is not out of the ordinary.bribery, nepotism, and
political patronage are a legacy of the former regime and the nation’s past.Numerous surveys also
highlight that corruption is perceived to be widespread in land registration.
Preliminary findings Dimension specific results
3. Anti-Corruption Policy
• Croatia has made solid progress in signing and ratifying
Main Components of Anti- key international conventions and has aligned key
components of criminal legislation to international
Corruption Policy standards.
3.1 Anti-Corruption Legal • Conflict of interest policy has improved (e.g. wealth
Framework & Adoption declaration of public managers) but still inconsistencies in
the legislation and the institutional basis for resolution of
of International conflicts must be strengthened.
• Although public procurement is largely in line with the
3.2 Anti-Corruption Strategy acquis communautaire, rules and procedures for fair and
3.3 Promotion of Good transparent procurement are not always respected
Governance and Reliable according to the private sector.
Public Administration • Croatia needs to develop a clear plan to tackle corruption
3.4 Transparency with customs officials. Training of customs officials is still
• Public/private consultation, monitoring and evaluation and
public awareness campaigns should become more
extensive if the national strategy is followed.
Preliminary findings Dimension specific results
Anti- • Croatia has signed and ratified key international conventions related to corruption, such as:
Corruption • The UN Convention against Corruption
Legal • The Council of Europe (CoE) Criminal Law Convention on Corruption
• The CoE Convention on Laundering, Search, Seizure and Confiscation of Proceeds of Crime
• The CoE Civil Law Convention on Corruption.
International • Significant progress has also been made in aligning the legislative framework with international
• Criminal offences include active and passive bribery (including private sector corruption),
money laundering, account offences and trading in influence.
• The Act on the Liability of Legal Persons for Acts of Crime was passed in 2003 (Official
Anti- • A new national anti-corruption strategy and an Action Plan has been recently adopted but now needs
to be implemented.
Promotion of • Croatia has taken steps to improve its conflict of interest policy (e.g. introduction of wealth declaration of public managers).
Good • However, the most recent SIGMA evaluation identified inconsistencies and other shortcomings in various pieces of legislation.
Governance • For example, the Law on Election of Representatives to the Croatian Parliament (LER) and the Law on Prevention of Conflict
of Interests in Pursuance of Public Offices contradict each other with regard to the ability of MPs to serve on the boards of
and Reliable SOEs.
Public • Furthermore, implementation of conflict of interest policy needs to be improved, namely by strengthening the Commission for the
Administration Resolution of Conflicts of Interest.
Preliminary findings Dimension specific results
3. Anti-Corruption Policy: Good
Promotion of • Until recently the Croatian civil service remained highly politicised due to:
Good • Inadequate provisions for merit-based recruitment and promotion.
• Lack of obligation on the part of civil servants to maintain impartiality or political neutrality in
Reliable Public the performance of official duties.
• Staffing of senior civil service positions mainly with political appointees.
• Changes have been made to the Law on Civil Servants and Employees in 2005. It is too soon to
evaluate the implementation or the results of these changes.
• Croatia should develop an anti-corruption strategy for customs. There are plans to introduce an e-
system for customs administration.
• The legal framework for public procurement is largely in line with the Acquis communautaire,
although some changes are still needed to fully align the system with EC Directives. According to
private sector, public procurement is not always conducted in a transparent way.
• As is the case in many SEE countries, anti-corruption training programmes for customs, tax and law
enforcement officials need significant strengthening.
Transparency • A monitoring council is planned to oversee implementation of anti-corruption strategy.
Representatives from the private sector will be included on the council.
• Oversight bodies, namely the State Audit Office and the Ombudsman institution, have been established
and are functioning. The State Audit Office submits reports to Parliament and has uncovered several
cases of misconduct. However, strengthening the capacity of the Ombudsman institution is needed.
• A public awareness campaign is anticipated in the anti-corruption strategy.
• Second Strategy
• Political Will
• Credible leadership
• Entry point
• Assessment of the political culture
The first challenge that all transition countries face in
launching an anticorruption strategy is credible
leadership. A serious anticorruption program cannot be
imposed from the outside, but requires committed
leadership from within, ideally from the highest levels of the
state. Yet it is precisely the credibility of the state that is
undermined by pervasive corruption, creating a potential
vicious circle in which entry points for an anticorruption
strategy are hard to find. Building a demand for reform
amongst the general public through diagnostic survey work
can be an effective way of convincing the political leadership
that serious anticorruption efforts will win them popular
The third challenge is to develop a detailed diagnosis of the
nature and extent of corruption in the particular country.
Experience has already shown that domestic surveys of
households, firms, and public officials can be a powerful
tool in any anticorruption strategy. The purpose of such an
exercise is to gain essential information about the nature of
the corruption beyond the general categories analyzed in
this report and to identify possible entry points (see below)
into effective anticorruption work. The process of
implementing surveys, running workshops, and developing
a dialogue within civil society on the nature of the problem
can play a major role in galvanizing support for an
anticorruption strategy and building constituencies at
various levels of the system.
Who: Actors in Corruption
• Political parties
• Local Government
Money and Politics
• “There are two things important in
politics. The first is money
• and I can’t remember what the
second one is”.
• Mark Hanna,1904
The party finance reform and
regulation of electoral
campaigns, beside the
manifest goals have effects
in development of
culture. It is a learning and
constructive process and
not a set of tricks to make
politics a vocation for the
The changing nature of
• Increase of costs
• Public relations
• Electronic media
• Trading of influence
• Lobbyng costs
Inside the parties: soft
• Oligarhization and concentration of power
and knowledge on finances
• Records and secrecy, books and soft
• Connections and influence of donors (“no
• Law on Political Parties (LPP: Zakon o
političkim strankama OG 164/98,
• Law on Elections in Sabor (LES:
Zakon o izborima zastupnika u Hrvatski
drzavni Sabor,OG 116/99)
• Law on Presidential Elections (LPE:
Zakon o izboru predsjednika Republike
Hrvatske ,OG 22/92).
• Law on financing of Campaign for
Election of the President (Zakon o
financiranju izborne promidžbe za
izbor predsjednika RH OG 22/94).
Elements Of The Party
• Non for profit entities
• Financed by membership fee and state
• 20% equally + 80% mandates
• The right for compensation of costs from
budget if the have representative elected
• Limit of 5% of votes
• Obligation to disclose the estimation of
• PP are “obliged to publicly disclose source
and assignments of their financial funds in
• If not “ the amount of money from budget
will be designated to humanitarian actions”
Law on financing of Campaign for
Election of the President¸2004
Disclosure regulations ?.
Bans against certain
types of contribution?.
Local budgets, state owned
corporations, trade unions or
foreign organisations and
Money lies at the root of
several political evils:
(1) Corruption. Politicians and parties may be
tempted to give improper favours in return
for political contributions. The search for
founds has often led to corruption.
(2) Unfairness. Money may lead to unfairness and
may distort electoral competition.
(3) Financial barriers against standing for
political office. The health of democracy
demands that members of every group –
rich or poor - should be able to undertake
a career in politics.
Types of Regulations
Contribution limits. Restrictions on the amounts an
individual is permitted to donate.
Disclosure regulations. Mandatory declaration of the
names of contributors to campaigns and to parties and
disclosure of the amounts contributed by each.
Bans against certain types of contribution.
For example, the regulation or restriction of political
payments by business corporations, trade unions or foreign
organisations and foreign citizens.
Public subsidies: Financial payments to parties or
candidates from public funds.
Rational balance of
financing (public and
• Fair criteria for distribution
• Strict rules and limits of
• Limits to overall costs of
• Full transparency of
• Independent auditing
Why are Political Financing
Regulations Often Evaded ?
(1) Loopholes. Although contributions to political parties
and to election campaigns are two of the most important
and most direct channels through which money may be use
to influence politics, they are not the only ones. Restrictions
on the financing of parties and elections are likely to prove
ineffective if other forms of 'politically relevant' financing
(2) Inadequate enforcement. In a field as
controversial and complex as the funding of parties and
campaigns, laws require effective supervision and
implementation. Election law has been a burgeoning field of
activity - and of profit - for the legal profession.
• Financing of political parties is priority in
• Standards and principles of regulation are
developed, in spite of loopholes and
• Respect for local circumstances
» The Role of Civil Society
• Internal organizational issues of political
Governance Obstacles to Business Croatia
Based on relative rating of each obstacle by the country's enterprises
Eastern Europe Average
Excessive Taxes and Regulations
Former Soviet Union Average
Financial Instability Street Crime/Theft/Disorder
Inflation Organised Crime/Mafia
Policy Instability Malfunctioning Judiciary
Results are based on the firms' perceptions of how much each of these factors Estimates are subject to a margin of error, and thus precise rankings ought not be
affect their performance. Results are scaled from 0 (no obstacle, least negative inferred. These charts are based on research in progress, and in no way reflect the
official position of the World Bank, its Executive Directors, or the countries they
influence on the firm) to 1 (serious obstacle, maximum negative influence on the
Note: The thick blue line represents the severity of each obstacle for business performance in the country you chose. Distance from the origin indicates higher obstacles, and thus poorer governance performance on
each dimension. The thin green line represents the average severity of each obstacle in the countries in the Former Soviet Union. The thin red line indicates the average severity of each obstacle for the countries in
Eastern Europe (outside the Former Soviet Union). To select a different country, please click on the "Input" tab below .
Source: "Seize the State, Seize the Day: State Capture, Corruption, and Influence in Transition" (PRWP 2444, http://w w w .w orldbank.org/w bi/governance/).
• More then 70% Bolivia, Brazil, Peru
• 51% - 70% Argentina, Bosnia and Herzegovina, Bulgaria, Cameroon, Costa
Rica, Ecuador, France, Greece, Israel, Italy, South Korea, Latvia, Lithuania,
Nigeria, Philippines, Poland, Romania, Taiwan, Turkey, Ukraine, Uruguay,
• 31% - 50% Albania, Canada, Croatia, Czech
Republic, Georgia, Germany, Ghana, India, Indonesia,
Ireland, Kenya, Macedonia, Mexico, Moldova,
Pakistan, Portugal, Russia, South Africa, Spain, USA
• 11% - 30% Afghanistan, Austria, Denmark, Estonia, Finland,
Guatemala, Hong Kong, Japan, Iceland, Kosovo, Luxembourg,
Malaysia, Norway, Singapore, Switzerland, UK, Venezuela
• Less 10% Netherlands
Un presidente de Mexico
entro cantando la letra de la anti-corrupcion
y salio con las maletas llenas
cantando la misma cancion
A president of mexico/began singing the verse of anti-corruption and left with
full suitcases/singing the same song.
Corruption in Croatia, especially at high levels of government, is
endemic¸and systemic. Officials typically excuse Croatia with
the empty phrase “corruption is a problem in all transition
countries”. The too frail international strategy emphasises
“process” and “capacity building” – the passing of laws and the
training of officials to, as one official says, “reduce the
opportunities for corruption”. It is both naïve and negligent to
rely on weak indigenous watchdogs like the USKOK, the Anti-
Corruption Council, or the media and civil society, to stand up
alone to the corrupt elite.
A dramatically different mind-set is needed. Croatia is not “just
another transition country” but an inherently weak state with
external and internal challenges to its very existence.