Doing Business Without Cash: The Art of Resolving Debts in Istria, Croatia

This article shows how small-scale family businesses in Istria, Croatia, navigate chronic debt. Drawing on long-term research with winemakers and farmers, it introduces the practice of lanac kompenzacija, a cooperative practice of debt settlement by organising chains of clients willing to write off the debts of others in exchange for erasing a debt of their own. Lanac kompenzacija allows for the management of seasonal liquidity issues and the maintenance of long-term relationships and reputations. The practice relies on clients being pošten – a disposition of honesty, integrity, and transparency in business and social relations – and illustrates its profound nature. Situating their debt resolutions within a broader Croatian political economy marked by arrears, this article argues that small family business owners in Istria reconfigure market participation in socially generative ways that allow them to make ends meet from one year to the next without always having cash on hand.