Social Capital and Corruption: Evidence from Western Balkan Countries

Abstract

Throughout the last decade, empirical evidence from transition countries has confirmed low levels of social capital, a resource often regarded as a determinant of the speed of reforms, economic growth and social development in these countries. On the other hand, corruption is considered to be closely related to social capital, whereas high levels of corruption reflect institutional weakness, which impedes contract enforcement. Such environment prevents building trust relations between economic actors. There are opinions that certain types of social capital are likely to increase corruption, which brings into question the causal direction of their relationship. The aim of the paper is to measure and compare the levels of social capital and corruption in Western Balkan countries. In addition, relations between social capital, corruption and GDP per capita levels will be explored in order to establish whether higher corrupt countries report lower levels of trust and civic participation and therefore lower GDP per capita.