engleski

High Profile Corruption and Trust in Politics

Political economy analysis of Croatia’s transformation process since 1990s indicates that Croatia has gone through a multiple process of transformation: state, political and economy with state transformation being the only process that has finished since then. Several characteristics of Croatia’s model of political economy of capitalism enacted have emerged out of which clientelism, crony capitalism, low transparency and overarching corruption stem among the most important. We focus on the latter since corruption creates constraint to successful political and economic transformation. Namely, we are interested in how does a high-profile corruption scandal change trust in politics and politicians? This paper answers this question by examining the consequences of the arrest and prosecution on corruption charges of Prime Minister of Croatia Ivo Sanader on political preferences and trust. Using a difference in differences methodology, this shock allows to identify the effect of a corruption scandal by comparing the average change in political attitudes over time in Croatia as compared to the average change in the control group of countries consisting of Slovenia, Bulgaria, Romania, Slovakia and Hungary. To do so, we use three waves of the European Social Survey (ESS) measuring individual level socio-demographic characteristics and political attitudes for over 20, 000 respondents before and in the aftermath of the corruption scandal. We find that the corruption scandal had a significant large and negative effect on trust in politicians, the serving parliament and politics overall. We find this decrease in trust is mainly driven by young voters that are on the Left, the ideological opposite of the party of Ivo Sanader. We conduct a series of robustness analysis that confirm our findings.

Difference in Differences Design ; Croatia ; Corruption

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