Ledeneva, A; Efendic, A; (2019) The cost of informal networking in the Western Balkans region matters. In: Gordy, E and Efendic, A, (eds.) Meaningful reform in the Western Balkans: between formal institutions and informal practices. (pp. 85-102). Peter Lang: Bern, Germany.

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Abstract

This chapter explores the prominence of informal networking of individuals in the Western Balkans (WB) and their associated costs. We find that informal networking, or use of personal contacts for getting things done, is frequent and that the informal costs of networking amount to 100 Euros per month, which is substantial, given that the average income reported by respondents is around 250 Euros. In the structure of networking costs, the estimated costs of invested time, a proxy for sociability, dominate. We find that incurred costs are systematically higher for males, educated individuals and for entrepreneurs. As our key policy relevant finding, we establish that individuals in the WB region who invest into informal networking do so at a high cost, which implies that the culturally determined sociability of informal networking has an instrumental purpose. The evidence highlighting the power of economic factors points to the ambivalence – both sociability and instrumentality – of informal networking.

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