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The Role of EU Integration in Accelerating Structural Reforms in the Western Balkans: Evidence, Theory and Policy. LEQS Paper No. 140/2019 January 2019

Besimi, Fatmir and Monastiriotis, Vassilis (2019) The Role of EU Integration in Accelerating Structural Reforms in the Western Balkans: Evidence, Theory and Policy. LEQS Paper No. 140/2019 January 2019. [Discussion Paper]

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    Integration with the European Union has been an important driver of economic, political and social transformation in the Western Balkans. In recent years, however, the pace of structural reforms in the region has decelerated and the trend of economic catch-up seen in the 2000s has not resumed after the slowdown of the global economic crisis. This has coincided – at least temporally, if not causally – with a ‘temporary freeze’ in the EU’s enlargement towards the region. Against this backdrop, this paper seeks to investigate the role of EU conditionality on economic reforms and convergence in the Western Balkans. To do so, it provides original, albeit descriptive, empirical evidence showing a strong link between EU-related structural reforms (towards the Copenhagen Criteria) and economic growth; and subsequently presents an analytical model demonstrating the mechanisms of policy decisions for reforms under EU conditionality. The model assumes away sectoral interests, policy uncertainty and coordination problems, allowing the analysis to focus specifically on the tension between two objectives: the pursuit of EU accession, through the implementation of jointly agreed reforms, and the accommodation of domestic policy concerns (maintaining policy stability and public support). Our results unveil a policy dilemma for the EU, having to choose between maximising the reform effort and minimising non-compliance. Drawing on this model, we discuss extensively the policy options that the EU faces in trying to enhance the reform performance, growth trajectories and, ultimately, European perspective of the countries in the region.

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    Item Type: Discussion Paper
    Uncontrolled Keywords: Structural reforms, European integration, Political Economy, Economic Western Balkans: Albania, Bosnia and Herzegovina, Croatia, Montenegro, North Macedonia and Serbia. convergence
    Subjects for non-EU documents: EU policies and themes > Treaty reform > enlargement
    EU policies and themes > Policies & related activities > political affairs > political union & integration/European Political Union
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > London School of Economics and Political Science (European Institute) > LEQS Discussion Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 07 Feb 2020 09:16
    Number of Pages: 46
    Last Modified: 20 Mar 2020 12:58

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