The purpose of this paper is to analyse corruption as a political economic phenomenon. Corruption has existed in various forms for thousands of years and today it is present in almost all the countries of the world. It can generally be defined as the misuse of position, entrusted power or authority for more or less personal gain. Apart from its existence in the public sector, corruption is present in the private sector too, which is often neglected. Hence, in the political economic analysis of corruption in this paper equal attention is given to the public corruption and private corruption, using primarily this classification. The major causes of corruption arise from the imperfections of politics, bureaucracy, institutions, management, and market, while its consequences on society, economy, political system, and individuals are numerous and although sometimes they can be positive, in the end they are negative. Considering that, corruption is prohibited by law in most of the states in the world and many other politics and measures to control corruption have often been carried. Although corruption can be reduced, its efficient level is not zero because an attempt to completely eliminate corruption would be too expensive. In Croatia corruption is recognized as a problem and it has been fought against with more or less success for years. According to the results of the survey research conducted on public and civil officials’ and private sector businesses’ (private companies’) perceptions and experiences of corruption in the public and private sector in Croatia it can be concluded that the progress has been made in the suppression of corruption in the last years, although the level of corruption in the country hasn’t been optimal yet.