Confidence in Formal Institutions and Reliance on Informal Institutions in Bosnia and Herzegovina
20 Pages Posted: 28 Jun 2011
Date Written: July 2011
This article uses survey data to investigate the relationship between citizens’ confidence in formal institutions and reliance on informal institutions in Bosnia and Herzegovina (BiH). We find an endogenous substituting relationship and that the different institutional structures currently existing in the two entities in BiH are significantly linked to respondents’ confidence in formal and reliance on informal institutions. In addition, perceptions of higher indirect costs of institutions and a lack of their improvement are associated with a lower confidence in formal and a greater reliance on informal institutions; the minority ethnic groups in each region are less confident in formal and rely more on informal institutions compared to the majority group; and more reliance on informal institutions is found amongst males and respondents from urban areas.
Keywords: Formal institutions, informal institutions, Bosnia and Herzegovina
JEL Classification: P14, P30, P39
Suggested Citation: Suggested Citation