Online Book: Neoclassicism in the Balkans and other Essays

Association of Non-Governmental
Organisations of Souteast Europe CIVIS
Dositejeva 4, 11 000 Belgrade

Vladimir Gligorov
Belgrade, 2012

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Papers and essays collected in this book were written over the last more than 15 years and mostly reflect one aspect of my work since I joined The Vienna Institute for International Economic Studies (WIIW). I have chosen them mostly for three reasons. First, some were influential at the time of writing; second, some country studies were written in order to support particular policy approach that I favour; third, some reflect my general view on the transition and development in the Balkans. The earliest piece was written in 1995 and the latest appeared in print in 2011. Practically all of the papers appeared originally in one or the other of the WIIW publications.

Perhaps the more controversial has been the paper on trade in the Balkans because of the impression that it casts a pessimistic light on regional integration and cooperation. Some later work of mine as well as other people has suggested that indeed potential trade is even lower than the actual one and that further relative decline of intra-regional trade could be expected. That view has remained controversial. As in the case of the other essays and papers in this collection, no changes in the original piece have been made.

The most read piece was the one on the costs of the Kosovo crisis which Niclas Sundstrom and I wrote in the middle of the NATO bombing campaign against the former Yugoslavia in 1999. It attracted interest both for the speculations about the costs that we made and for the methodology that we adopted.

Some discussion was ignited by the short paper on the crisis in Albania in 1996-1997. Prior to the crisis, Albania was praised by the IMF and some researchers for providing a small miracle of fast transition. The title of the article alludes to that and the article itself goes on to argue for a particular explanation of the crisis and its enduring consequences. Both have
been controversial.

The paper on the debt in Croatia was also controversial. It is representative of my understanding of economic transition in that country and has some bearing on the general issue of debt policies in the Balkans. I have worked before and after on the issues of current account and debt sustainability, but this is probably the better known paper that I published on these issues.

I wrote a short essay on Bosnia and Herzegovina just after the signing of the Dayton agreement. It reflects my reading of the constitution that is part of this agreement. I have written other papers on B&H economy, but this is probably the one that advances claims that are still of some interest.

The paper on Macedonia, co-authored with Silvana Mojsovska, was an attempt to suggest a redirection in the policy stance advocated by the IMF for that country for a long time. It was received critically by the then government. It remains the most extensive piece I have written on the economic developments in this country.

The extensive paper on Yugoslavia, at the moment of writing consisting of Serbia and Montenegro, is in part a summary of much of what I have written on this country or countries. I have included it in this collection because it illustrates my assessment of the 6 policy stance taken by the reformist governments. I have written extensively on Serbia and also Montenegro before and after, but this paper was probably more controversial than the others at the time of writing.

There is a long paper on transition and development that reflects my work within the Global Development Network that I have run projects for for more than a decade now. It is a summary of the framework, methodologies, and the findings. It offers a general approach to these issues in the context of the Balkans.

Another long paper on delayed integration tackles the costs for countries, not only in the Balkans, that choose to stay out of integrations, in particular out of the European Union. It relies on a simple public choice methodology and looks specifically on the issue of the usefulness of independent monetary policy. The paper complements the other ones that deal with Balkan regional disintegrations.

The lead essay in this collection can also serve as an introduction and was written for a conference organized by the Bank of Greece and updated for a conference organized by the National Bank of Austria and has appeared in the proceedings of the latter in 2011. It is a short summary of my view of the interplay of economic science and Balkan policies. I have followed up on this topic, but this is the shortest and most topical statement.

Finally, there is a short piece on the history of divergence which I wrote for a WIIW publication of data sources on Balkan economies. It is a reflection on the economic balkanization and the consequences of that process.

I occasionally teach courses in Balkan economics and this collection also reflects the preference of my students on the reading material that I assign. I hope that it may prove useful in future courses too.

Vladimir Gligorov