How Different Forms of Corruption Affect the Economy of Bosnia and Herzegovina: A Research Project

Corruption is globally viewed as dishonest and illegal behavioral activity that has negative influence on the overall economic and social environment. The aim of this research paper is to identify and examine effects of bribery, fraud, and favoritism on the economy of Bosnia and Herzegovina (B&H). The research was conducted on the territory of B&H including two hundred economic experts. The objective was to collect participants' opinions and experiences with corruption and its forms. Secondary data was extracted from books, journals, articles, and web pages. The findings show that majority of the participants encountered corruption but they did not report because they were mainly afraid of the illegal consequences they may face. The most widespread corruption form in B&H is bribery and the participants emphasized some of the effects of corruption on the economy such as uneven distribution of wealth, inefficient allocation of resources, lower growth rates, unfavorable business environment, demotivation of workers, slower process towards the European Union (EU) membership, etc. I concluded that as B&H needs more time to become EU member, it loses the opportunity to establish fair and efficient trade, higher EU protection, larger budget, etc. Also, I realized that there is a high presence of corruption in B&H which does not decrease from year to year and appears in both public and private sector. This also destroys the legitimacy of the state and the quality of public services as well as the economic growth of B&H.