Serbia: documented application of the same framework
Academic research base
How does a private company become dependent on the government's goodwill?
A private company becomes politically dependent when its contract, license, tax treatment, credit or even property security no longer depend on the foreseeable rule, but on the relationship with the government. The owner then knows that supporting an independent media, financing the opposition or refusing the requested service can trigger an inspection, job loss or regulatory obstacle.
At the same time, political closeness can open access to public procurement and protection from competition. In such an environment, investing in relationships becomes more rational than investing in productivity, and economic power is transformed into political obedience. A bad business result in itself is not a proof of pressure. A trace of a specific state reward or threat, different treatment of similar firms and changes in behavior associated with political demand are needed.
A private company in Serbia can be formally independent, and its survival still depends on the state: permission, inspection, urban planning, public procurement, subsidies, loans or access to a large state project. When these rules are applied unpredictably or selectively, the owner learns that it is safer to maintain good relations with the political top than to rely on equal rights. Dependence does not have to be pronounced; it is enough that the state can quickly build on business.
How the finding is separated in the matrix
Studies of political economy and clientelism describe links between parties, business elites and public resources, while anti-corruption reports record non-transparent state aid, special projects and poor control of conflicts of interest. ASTRA’s case of 11 Indian workers on the Linglonga construction site shows the reverse side of dependence: a politically important foreign firm can act as a privileged one, while workers find it difficult to obtain effective institutional protection.
If the business result depends on a discretionary political decision, the firm has the incentive to finance, advertise or at least not criticize the government, even without a formal order.
To a significant extent systemic risk is substantiated, but the political dependence of a company cannot be assumed without concrete evidence.
Companies legitimately deal with the state and ask for permissions. Boundary is unequal treatment: a hidden condition of loyalty, selective control, conflict of interest or convenience without a publicly defensible criterion.
The company can also change its behavior due to ordinary market or legal risk. For political dependence, a specific state threat or reward should be shown.
Works supporting this answer, with their evidence type and an explanation of how they relate to the claim.
comparing several countries or cases
Carothers, C. (2022), „Taking Authoritarian Anti-Corruption Reform Seriously“, Perspectives on Politics 20(1): 69–85.
- Contribution to this answer
- Carothers shows that the authoritarian government can use the fight against corruption selectively and centrally: since the political leadership determines how the rules will be applied, business actors can become dependent not only on the law but also on how the government will decide to use the law.
comparing several countries or cases
Carothers, C. (2023), „The Autocrat’s Corruption Dilemma“, Government and Opposition 58(1): 22–38.
Carothers, C. (2023), "The Autocrat's Corruption Dilemma", Government and Opposition 58(1): 22–38.
- Contribution to this answer
- “Corruption can bring business and political elites together through a common interest: privileges, contracts and access to rents give businesses the benefit of the existing system, but at the same time make them vulnerable because political change or loss of protection can threaten exactly what they have gained.
Explain how the system works
Gehlbach, S. i Sonin, K. (2014), „Government Control of the Media“, Journal of Public Economics 118: 163–171.
- Contribution to this answer
- Gehlbach and Sonin, on the example of the media, show a wider mechanism of dependence of the private owner: the state can influence the business decision when it controls the regulation or when the political goal of the government changes the value of private profits. The media can remain private property, and yet have a strong reason to adapt the content to the interest of the state.
Explain how the system works
Greene, K. F. (2007), Why Dominant Parties Lose, Cambridge University Press.
- Contribution to this answer
- Greene shows how the dominant party gains political strength when controlling the resources on which other actors in the economy depend. In such a system, business success is not necessarily just a market issue: proximity to the state can open access to resources that competitors do not have.
Historical data and comparison
Moustafa, T. (2007), The Struggle for Constitutional Power: Law, Politics, and Economic Development in Egypt, Cambridge University Press.
- Contribution to this answer
- Moustafa shows why the authoritarian government sometimes wants more reliable courts and rules: private investors need predictability to invest. But it is this case that shows the paradox the government wants enough rights for the economy to function, and not necessarily enough rights for private actors to be completely protected from political power.
Sources supporting the Serbia example, with the claim they support and their limitations.
Reviewed scientific work - Verified 21.08.2026
Pavlović, Dušan. 2020. “The Political Economy Behind the Gradual Demise of Democratic Institutions in Serbia.” Southeast European and Black Sea Studies 20(1): 19–39. https://doi.org/10.1080/14683857.2019.1672929
Pavlović, Dušan. 2020. “The Political Economy Behind the Gradual Demise of Democratic Institutions in Serbia.” Southeast European and Black Sea Studies 20(1): 1939. https://doi.org/10.1080/14683857.2019.1672929
- What the source records
- The work links the weakening of democracy with the rules and economic incentives that enable the authorities to turn public resources into a political advantage.
- Claim it supports
- The claim that a firm becomes politically vulnerable when a license, inspection, contract or subsidy depends on a discretionary and unequally controlled decision of the state.
- Source limitation
- It is a causal interpretation of a long process; it does not cover developments beyond 2019 and does not exclude other explanations.
Reviewed scientific work - Verified 21.08.2026
Cvejić, Slobodan. 2016. “On Inevitability of Political Clientelism in Contemporary Serbia.” Sociologija 58(2): 239–252. https://doi.org/10.2298/SOC1602239C
Cvejić, Slobodan. 2016. “On Inevitability of Political Clientelism in Contemporary Serbia.” Sociology 58(2): 23952. https://doi.org/10.2298/SOC1602239C
- What the source records
- The paper describes clientelist networks that connect party tops, economy, public sector and voters in a weak institutional environment.
- Claim it supports
- The claim that a firm becomes politically vulnerable when a license, inspection, contract or subsidy depends on a discretionary and unequally controlled decision of the state.
- Source limitation
- It is based on qualitative interviews and theoretical synthesis; it does not measure the frequency of every practice in the entire population.
Domestic NGOs anti-corruption parallel report - Verified 21.08.2026
Đorđević, Miloš, i Nemanja Nenadić. 2023. Civil Society Report on the Implementation of UNCAC Chapters II and V in Serbia. Beograd: Transparentnost Srbija i UNCAC Coalition.
orđević, Miloš, and Nemanja Nenadić. 2023. Civil Society Report on the Implementation of UNCAC Chapters II and V in Serbia. Belgrade: Transparency Serbia and UNCAC Coalition.
- What the source records
- Based on regulations, organ reports, eight requests for access to information, consultations and documented cases, the authors find a broad formal framework, but a significantly larger problem in the ineffective or selective application of the rules.
- Claim it supports
- The claim that a firm becomes politically vulnerable when a license, inspection, contract or subsidy depends on a discretionary and unequally controlled decision of the state.
- Source limitation
- The report is thematically related to UNCAC and ends in mid-2023, so it does not specify the type of regime or cover later development and all forms of political control.
Official international monitoring - Verified 21.08.2026
European Commission. 2025. Serbia 2025 Report. Commission Staff Working Document. Brussels: European Commission.
- What the source records
- The report notes weak election conditions, limited parliamentary scrutiny, strong political pressure on the judiciary and concerns that the president is in practice directing decision-making beyond the constitutional idea.
- Claim it supports
- The claim that a firm becomes politically vulnerable when a license, inspection, contract or subsidy depends on a discretionary and unequally controlled decision of the state.
- Source limitation
- The report is related to the EU accession process and describes a certain period; it does not represent a scientific causal study or a uniform assessment of the type of regime.
Domestic NGOs documented case study - Verified 21.08.2026
ASTRA. 2024. Neispričana priča 11 radnika žrtava trgovine ljudima u Srbiji. Beograd: ASTRA.
ASTRA. 2024. Untold story of 11 victims of human trafficking in Serbia. Belgrade: ASTRA.
- What the source records
- Document contractual violations and pressures on workers in the project of a politically important foreign investor, with an assessment of the institutional reaction.
- Claim it supports
- Shows how a close relationship of the company with the government can reduce the likelihood of timely control and protection of workers.
- Source limitation
- “It is a case collected in the short term before the departure of the workers; it shows what the privileged position of the investor may look like, but it does not prove the general state policy towards all investors.
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