SR

Twenty years of Cavtat Group

Publisher
Peace and Crises Management Foundation
Dositejeva 4, 11 000 Belgrade

Author
Boris Vukobrat
Vladimir Gligorov

Co-authors
Elisabeth KOPP, Professor Jean- François AUBERT, Professor Aloïs RIKLIN, Professor Kurt ROTHSCHILD, Professor Vojislav STANOVČIĆ

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Sample Chapter: What is the price of nationalism?

Economic outcomes before and after the break-up of Yugoslavia

What are the costs of nationalistic policies? The expectations may be more optimistic than is warranted as the example of the breakup of Yugoslavia suggests. Assuming that nationalists expected that economic results would be better than in federal Yugoslavia, it makes sense to get some idea of what an alternative to a nationalistic strategy would have achieved in the last 20 years. The alternatives are nationalism vs. integration, not necessarily independence vs. federal Yugoslav state.

That allows Slovenian development to be the basis for counterfactual simulations of where would have other Yugoslav states been had they followed its strategy of transition. This because (i) Slovenia opted for gradual transformation of the inherited Yugoslav institutions to those characteristic of the European Union (this is sometimes seen as a type of economic nationalism though in view of the next characteristic it is more of a gradualist strategy of transition) and that allows for an indirect evaluation of the Yugoslav institutions; (ii) chose to integrate with the EU and indeed the EMU, both as soon as possible, rather than pursue a protectionist, nationalistic strategy, which enables the comparison of these two strategies; and fared well, though not miraculously well, so its performance can be used as unbiased basis for comparative assessment of the price of nationalism.

I will rely on four indicators: GDP growth and GDP per capita, employment and unemployment, openness in terms of exports, and industrial development. There are two points to stress before actual comparisons are made. First, the Slovenian economy grew faster than those of most other transition countries in the last 20 years, except for Poland and Slovakia when the last two crisis years are included. Still, that growth was not exceptionally high, in real terms about 2.3% per year. As a consequence, Slovenian GDP in 2010 stood at 157.2% of that in 1990 (at constant prices).

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