Business Location Quality and Trust in Public Institutions

A recent article in WIFO-Monatsberichte (monthly reports) summarises selected results for Austria and compares them with the average values of three groups of countries that are particularly relevant as peers for Austria. This year's focus in the present article topic is on managers' trust in public institutions. Special attention is paid to subjective perceptions of corruption.

In an international comparison, Austrian managers traditionally show a high level of trust in public institutions (government, judiciary and police). However, the numerous crises of recent years have increasingly strained this trust.

Corruption impairs a country's business location quality primarily because of the uncertainty it creates for companies. In particular, a high level of corruption jeopardises investment activity.

According to the managers surveyed, covert payments and opportunistic corruption at the administrative level are less widespread in Austria than "political corruption", i.e. exerting influence on elected political decision-makers and executives in the administration.