Over the past few years Kosovo's economy has shown significant progress in transitioning to a market-based system and maintaining macroeconomic stability. However, it remains highly dependent on the international community and the diaspora for financial and technical assistance. In partnership with the private sector, Kosovo has been developing a modern and diverse economy that generates revenues, invests in strategic commercial infrastructure, provides business opportunities for SMEs, and attracts foreign investment. According to a December 2010 Council of Europe Report, crime, corruption and politics are intertwined - meaning that corruption is still widespread and remains a major problem in Kosovo. Insufficient legislative and implementation measures, lack of political will, a culture of clientelism and weakness of the judicial system are the main causes of corruption.

Positive developments in relation to corruption and investment:

• Over the recent years, Kosovo has achieved some progress in key structural reform areas, including public enterprise restructuring and law enforcement.
• In addition, in order to reduce red tape and promote transparency in the regulatory processes, the government has launched several internet portals and has created one-stop shops to reduce propensity for corruption, as direct encounters between civil servants and companies decrease.
• Furthermore, Kosovo has begun to move towards a somewhat more competitive political landscape, with the ability to penalise corrupt officials at the polls.
• A total of 1830 (or 96%) public officials declared their assets in 2011. Cases have been initiated against 84 persons who did not.

Risks of corruption:

• The judicial system is identified by several sources and surveys as the institution which is most affected by corruption in Kosovo.
• Public administration in Kosovo can be characterised as inefficient and subject to political interference, while the civil service and public finance management functions lack full transparency and accountability.
• According to Global Integrity 2009, areas that require particular attention in regards to anti-corruption efforts include public procurement, privatisation, the judiciary, as well as public administration.