Tackling the Undeclared Economy in Croatia

To evaluate how undeclared work is being tackled in Croatia this paper reports an e-survey and in-depth interviews with key stakeholders in Croatia. It is revealed that, compared with the European Economic Area countries, Croatia has a weak institutional infrastructure for tackling undeclared work and pursues a narrower range of policy measures. The outcome is a call to develop a single body to better coordinate actions to tackle the undeclared economy in Croatia and for a shift towards an approach that seeks to provide gateways to formalisation. Furthermore, Croatia needs to modernise its work and welfare regime through higher levels of state expenditure in the labour market and social protection, coupled with redistribution via social transfers so as to construct a more equal society.