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1. The FDI-led Growth Regimes of the East-Central and South-Eastern European Periphery

Author:
Dragos Adascalitei and Cornel Ban
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:
The East-Central European countries that joined the EU in the 2000s are the unsung success of economic development. This paper discusses the consolidation of an export-led growth model in this region by drawing on an alternative school of thought to Varieties of Capitalism: growth regimes. By focusing on three distinct time periods (2000-2008, 2008-2012 and 2012-2019), it shows that despite marginal shifts towards consumption-led growth through personal debt or wage increases, the core of the region’s economic model continues to be heavily dependent on exports. Combining IPE and CPE analytical frameworks, we show that the consolidation of the CEE export-led model has both systemic and national roots. Specifically, we argue that growing international competition from Asia in the beginning of 2000s has forced firms in Western economies to seek alternative sources of competitiveness that involved a mix of wage moderation at home and expansion towards the East. The internationalization of Western firms met capital hungry Eastern governments, which were all too happy to use FDI to restore the competitiveness of their outdated SOEs. Backed by a social bloc that involved domestic and foreign capital as well as workers in the tradeable sectors, the export-led growth model took off and generated growth rates well above those in core countries. The 2000s also saw an increase in debt fueled consumption, that partially compensated for the lack of wage growth in the region. The crisis provided an opportunity to put an end to hybridization and to reinforce the export-led component of growth through short-term austerity measures and deeper labor market reforms. These changes consolidated the export-led model that remained in place even amidst political reconfigurations that, at least rhetorically, aimed to fight the economic dependency of the region on FDI. After the crisis ended, however, the closing of the debt-finance consumption channel combined with the German export boom to the rest of the world and local demographic decline to put upwards pressure on wage-financed consumption increases without inflationary or external balance problems. Yet despite historically low spreads in the region’s bond markets, this did not count as a full Kaleckian turn, however, with the region’s contribution of consumption to GDP growth remaining far below both consumption-led growth regimes and balanced ones.
Topic:
Economics, International Political Economy, Foreign Direct Investment, Economic Growth, Exports, State-Owned Enterprises, and Consumerism
Political Geography:
Eastern Europe and Central Europe

2. Exchange rate pass-through to import prices: Accounting for changes in the Eurozone trade structure

Author:
Valérie Mignon and Antonia Lopez-Villavicencio
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper assesses whether the emergence of new trading partners (i.e., China and Eastern Europe) as suppliers reduces the exchange rate pass-through (ERPT) in Eurozone countries which differ regarding their external exposure. Using bilateral data on import prices at the two-digit sector level, we find that (i) pass-through is complete in many cases, (ii) ERPT from China is higher than from the United States, and (iii) there is no compelling evidence of a generalized link between ERPT and the increasing integration of some emerging markets in European imports. We also show that the launch of the single currency has not provoked a sufficient change in the part of trade exposed to exchange rate fluctuations and, therefore, has not affected the pass-through. Overall, the trend of liberalization in new players' markets has not altered the competitive environment such as to induce exporters of other countries to absorb exchange rate depreciations.
Topic:
Economics, International Political Economy, International Trade and Finance, Exchange Rate Policy, Eurozone, Trade, and Imports
Political Geography:
China, Europe, and Eastern Europe

3. Why does the IMF assign labor conditions? The Burden of Adjustment, Exchange Rate Regimes, and Labor Conditions

Author:
Saliha Metinsoy
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Centre for Global Political Economy, University of Sussex
Abstract:
Why does the International Monetary Fund (IMF) assign more stringent labor conditions in some cases and not others? This paper argues that the Fund’s bureaucratic organizational culture and neoliberal economic beliefs dictate its interpretation of international economics and predict the stringency of labor conditions in its programs. Particularly, the Fund staff envisage that lower unit labor costs would indirectly increase competitiveness, boost exports, and contribute to the balance of payments in fixed exchange rate regimes, where currency depreciation is not possible. To this end, the Fund assigns more stringent labor conditions in fixed regimes compared to floating ones. To test this theory, the paper uses a mixed method. It firstly demonstrates the association between exchange rate regimes and the stringency of labor conditions in Fund programs in a global sample. It then complements this analysis by showing particular organizational habits and beliefs at work in two cases, namely in Latvia and Hungary in 2008 under their respective IMF programs. Furthermore, the paper shows that distribution of income away from labor groups (i.e. lowered wages) is in fact by design in IMF programs in an attempt to increase competitiveness in fixed regimes.
Topic:
Economics, International Monetary Fund, International Development, and Neoliberalism
Political Geography:
Europe, Eastern Europe, Hungary, and Latvia

4. Political and Economic Governance in the Balkans and Eastern Europe Compared

Author:
Michael Emerson and Gergana Noutcheva
Publication Date:
07-2018
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The not-yet EU member states of the Balkans and three states of Eastern Europe – Georgia, Moldova and Ukraine – have much in common: geographic proximity to the EU, political priority to become members of the EU, and similar struggles to improve their political and economic governance in line with EU standards and values. The EU’s main differentiation between the two groups is over the ‘membership perspective’, which has been offered to the Balkans but not to the East Europeans. Beyond this formal political stance, however, in practice the EU been extending virtually the same comprehensive array of economic and political instruments to both groups by signing Association Agreements with the three Eastern European states. This paper breaks new ground by comparing the record of both groups in terms of the quality of their political and economic governance. Using original material and existing sources, it finds that the two groups are comparable at two levels; it looks at both the frontrunners and laggards in each group. Most striking is that the East European frontrunner, Georgia, ranks even slightly ahead of the Balkan frontrunners. This leads into a case for reconsidering the EU’s present political doctrines over both its enlargement and neighbourhood policies, which are manifestly obsolescent. The paper concludes with three options for how the EU might adapt to these realities and make consequential policy changes.
Topic:
Economics, Politics, Governance, and Regional Politics
Political Geography:
Europe, Ukraine, Moldova, Eastern Europe, Balkans, and Georgia

5. Incomplete Hegemonies, Hybrid Neighbours: Identity games and policy tools in Eastern Partnership countries

Author:
Andrey Makarychev
Publication Date:
02-2018
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper applies the concepts of hegemony and hybridity as analytical tools to help understand the structural changes taking place within the Eastern Partnership (EaP) countries and beyond. The author points to the split identities of many post-Soviet societies and the growing appeal of solutions aimed at balancing Russia’s or the EU’s dominance as important factors shaping EaP dynamics. Against this background, he explores how the post-Soviet borderlands can find their place in a still hypothetical pan-European space, and free themselves from the tensions of their competing hegemons. The EaP is divided into those countries that signed Association Agreements with the EU and those preferring to maintain their loyalty to Eurasian integration. Bringing the two groups closer together, however, is not beyond policy imagination. The policy-oriented part of this analysis focuses on a set of ideas and schemes aimed at enhancing interaction and blurring divisions between these countries. The author proposes five scenarios that might shape the future of EaP countries’ relations with the EU and with Russia: 1) the conflictual status quo in which both hegemonic powers will seek to weaken the position of the other; 2) trilateralism (EU, Russia plus an EaP country), which has been tried and failed, but still is considered as a possible option by some policy analysts; 3) the Kazakhstan-Armenia model of diplomatic advancement towards the EU, with some potential leverage on Russia; 4) deeper engagement by the EU with the Eurasian Economic Union, which has some competences for tariffs and technical standards; and 5) the decoupling of security policies from economic projects, which is so far the most difficult option to foresee and implement in practice.
Topic:
Diplomacy, Economics, European Union, Partnerships, Identity, and Post-Soviet Space
Political Geography:
Russia, Europe, and Eastern Europe

6. The Rules of Reproduction of Capitalism: A Historicist Critique

Author:
Samuel Knafo and Benno Teschke
Publication Date:
01-2017
Content Type:
Working Paper
Institution:
Centre for Global Political Economy, University of Sussex
Abstract:
Marxism has often been associated with two different legacies. The first rests on a strong exposition and critique of the logic of capitalism, which has been grounded in a systematic analysis of the laws of motion of capitalism as a system. The second legacy refers to a strong historicist perspective grounded in a conception of social relations and an emphasis on the centrality of power and social conflict to analyse history. In this article, we challenge the prominence of structural accounts of capitalism, which are inspired by the first of these legacies and argue for the need to radicalize the agent-centered and historicist contribution of Marx that derive from the second. Our claim is that Marxists operating within a structural framework systematically fall into economistic readings of capitalism, which hinder the practice of historicisation Marxism was supposed to buttress. To make this argument, we show how this tension between these legacies has played out within Political Marxism (PM). We argue that both orientations – encapsulated in the simultaneous programmatic emphasis on historically specific social conflicts and determinate rules of reproduction that are logically deduced from definitive social property relations – co-existed already uneasily in Robert Brenner’s original contributions to the Transition Debate. We proceed by critically exploring the increasing reliance on a structural conception of the ‘rules of reproduction’ in later works of PM’s early proponents and by some of its contemporary followers. This, we argue, has led to the reification of capitalism and a growing divide between theoretical premises and historical explanation. In response, we seek to return to the early historicist innovation of PM and to recover and develop its commitment to a more contextualised and open-ended interpretation of social conflicts. Through this internal critique and re-formulation of PM, we wish to open a broader debate within Marxism on the need for a more agency-based account of capitalism, which builds more explicitly on the concept of social relations.
Topic:
Economics, Socialism/Marxism, and Capitalism
Political Geography:
United States, Japan, Eastern Europe, Germany, and Western Europe

7. Global Value Chains or Global Poverty Chains? A new research agenda

Author:
Benjamin Selwyn
Publication Date:
06-2016
Content Type:
Working Paper
Institution:
Centre for Global Political Economy, University of Sussex
Abstract:
Global Value Chain (GVC) analysis is part and parcel of mainstream development discourse and policy. Supplier firms are encouraged, with state support, to ‘link-up’ with trans-national lead firms. Such arrangements, it is argued, will reduce poverty and contribute to meaningful socio-economic development. This portrayal of global political economic relations represents a ‘problem-solving’ interpretation of reality. This article proposes an alternative analytical approach rooted in ‘critical theory’ which reformulates the GVC approach to better investigate and explain the reproduction of global poverty, inequality and divergent forms of national development. It suggests re-labelling GVC as Global Poverty Chain (GPC) analysis. GPC’s are examined in the textiles, food, and high-tech sectors. The article details how workers in these chains are systematically paid less than their subsistence costs, how trans-national corporations use their global monopoly power to capture the lion’s share of value created within these chains, and how these relations generate processes of immiserating growth. The article concludes by considering how to extend GPC analysis.
Topic:
Development, Economics, International Political Economy, Labor Issues, Inequality, and Global Political Economy
Political Geography:
United States, Eastern Europe, and Asia

8. Sustainable Northern Development: The Case For An Arctic Development Bank

Author:
Alan Gill and David Sevigny
Publication Date:
01-2015
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The creation of the multilateral development bank (MDB) model represents one of the most ingenious financial innovations in recent times. Initially designed to address the problems of financing reconstruction after World War II, this model has shown itself to be surprisingly adaptable to meet a range of other challenges. These have included fostering developing country growth, dealing with the developing world debt problem and facilitating the transition of countries within Central and Eastern Europe from centrally planned to market-based economies.
Topic:
Economics and War
Political Geography:
Eastern Europe and Chicago

9. The Hour of Truth: The Conflict in Ukraine–Implications for Europe’s Energy Security and the Lessons for the U.S. Army

Author:
Dr. Ariel Cohen and Ivan Benovic
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
The Strategic Studies Institute of the U.S. Army War College
Abstract:
Since the breakup of the Soviet Union, a number of gas disputes between Russia and Central and Eastern European countries have unveiled the strategic dependence of Europe on Russian piped gas. The recent Ukrainian crisis demonstrated that Europe has a desperate need to improve the security of its gas supply. The United States is interested in the economic stability and growth of Europe, because the European Union (EU) is its principal and largest economic partner. The United States and the EU enjoy the largest trade and investment relationship in the world, which should not be jeopardized by disruptive, anti-status-quo powers. Europe’s energy independence is not only an economic interest of America, but also a political and security one. Europe’s dependence on Russian natural gas undermines European unity and weakens the primary U.S. allies in their relations with Russia. U.S. Armed Forces in Europe and the U.S. Army in particular can and should play an important role in promoting energy security. This involvement includes: increased situational awareness; deployment to the sensitive areas; and enhanced training activities, including with the allies of the U.S. military in Central and Eastern Europe.
Topic:
Security, Economics, Energy Policy, Natural Resources, Military Affairs, and Gas
Political Geography:
Russia, Europe, Eastern Europe, and Soviet Union

10. A Political Economy of Slum Spaces: Mathare Valley

Author:
Tiberius Barasa and Andvig Jens Chr
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The starting point of the paper is the spatial characteristics of slums when it seeks to explain why rulers tend to neglect the welfare of their dwellers: they don't have to. Their economies are fairly closed. While located close to the centers of power, their high population density implies that they cover small space and are easy to cordon off in case of danger. The ease of control from the outside allows rulers to spend less attention to the control of their complex inside. Particularly when a slum is based on shack architecture, the high degree of mutual monitoring among dwellers may cause sharp shifts in the control regime of crime. The emphasis on spatial configurations motivates the focus on one specific slum: Mathare Valley. Paths back to colonial rule are outlined. The paper is stylistically unkempt.
Topic:
Economics, Human Rights, Human Welfare, and Politics
Political Geography:
Europe and Eastern Europe

11. Unemployment and Unemployment Protection in Transition

Author:
Wayne Vroman and Vera Brusentsev
Publication Date:
04-2008
Content Type:
Working Paper
Institution:
Urban Institute
Abstract:
Nearly twenty years have passed since the transition from a centrally-planned towards a market-oriented economy in the countries of Central and Eastern Europe and the Former Soviet Union (CEE-FSU). This paper documents the differing patterns of unemployment during the period 1990 to 2006 in the 28 countries that constitute the CEE-FS U group and outlines how unemployment protection programs developed in response. We also suggest some tentative explanations for the observed trends in unemployment and unemployment compensation. Our approach is novel in that we compare the performance of the CEE-FSU group to the worldwide average and to other major economies. In addition, we demonstrate important contrasts across the CEE-FSU sub-regions.
Topic:
Economics
Political Geography:
Russia, Europe, Eastern Europe, Asia, and Soviet Union

12. Divergence and Convergence in Eastern Europe Eurasia: One Transition Path Or Two?

Author:
Robyn Murphy and Ron Sprout
Publication Date:
02-2007
Content Type:
Working Paper
Institution:
United States Agency for International Development
Abstract:
This paper attempts to assess the transition “divide” between Eastern Europe and Eurasia by examining and updating trends across the economic, political, and social transition dimensions. Is there evidence that the transition to market-oriented democracies between the Central and Eastern Europe (CEE) countries and Eurasia is diverging along these dimensions? To what extent are the CEE countries taking one transition path and the Eurasian countries an alternative one?
Topic:
Development, Economics, and Markets
Political Geography:
Eurasia and Eastern Europe

13. Labor Markets in Eastern Europe and Eurasia

Author:
Robyn Murphy, Ron Sprout, and Ayo Heinegg
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
United States Agency for International Development
Abstract:
This research attempts to look systematically at the available data regarding labor market characteristics of the transition in Eastern Europe and Eurasia. A primary focus is the examination of the data in light of a World Bank working hypothesis that “there are signs of an emerging divide between labor markets in the transition economies of Eastern Europe and those of low-income Eurasian countries.” We find significant labor market gaps and differences between the CEE countries (particularly the Northern Tier CEE) and Eurasia but mixed evidence at best that these gaps are growing. We also find that there remain some key challenges and adverse trends in labor markets even among the Northern Tier CEE countries.
Topic:
Development, Economics, and Markets
Political Geography:
Eurasia and Eastern Europe

14. Making and Unmaking Money: Economic Planning and the Collapse of East Germany

Author:
Jonathan R. Zatlin
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
This paper locates the collapse of East German communism in Marxist- Leninist monetary theory. By exploring the economic and cultural functions of money in East Germany, it argues that the communist party failed to reconcile its ideological aspirations - a society free of the social alienation represented by money and merchandise - with the practical exigencies of governing an industrial society by force. Using representative examples of market failure in production and consumption, the paper shows how the party's deep-seated hostility to money led to economic inefficiency and waste. Under Honecker, the party sought to improve living standards by trading political liberalization for West German money. Over time, however, this policy devalued the meaning of socialism by undermining the actual currency, facilitating the communist collapse and overdetermining the pace and mode of German unification.
Topic:
Communism and Economics
Political Geography:
Europe, Eastern Europe, Germany, and West Germany

15. Monitoring Country Progress in Eastern Europe and Eurasia

Author:
Robyn Murphy and Ron Sprout
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
United States Agency for International Development
Abstract:
This paper presents an abridged version of USAID/E's 10th edition of its annual report which monitors country progress in the twenty-nine transition country region. The salient findings include: (1) 2005 progress in economic reforms in the transition region was comparable to the good pace of economic reforms in recent years. (2) 2005 data show a continuation of the growing democratization gap between CEE and Eurasia that has been evident since the early transition years. (3) The twenty nine transition countries generally fall into four fairly distinct reform groups: (a) Northern Tier CEE; (b) Southern Tier CEE; (c) Eurasian reformers; and (d) Eurasian non-reformers (Turkmenistan, Belarus, and Uzbekistan). (4) Economic growth rates in the region continue to exceed global norms, and within Eastern Europe and Eurasia, continue to be highest in Eurasia in large part due to favorable primary product trends. (5) Many social indicators continue to recover, apparently at least partly in response to improving economic conditions, including falling poverty and infant mortality rates, and rising real wages and education enrollment rates. (6) Yet many countries are (still) experiencing increasing unemployment rates and the life expectancy gap between CEE and Eurasia continues to grow. (7) And some of the transition countries have among the highest crude death rates worldwide along with among the lowest fertility rates (and birth rates) worldwide.
Topic:
Development, Economics, and Health
Political Geography:
Eurasia, Eastern Europe, Uzbekistan, Turkmenistan, and Belarus

16. The Miniskirt and the Veil: Aid and Islam in Bulgaria

Author:
Dana Steinberg (ed)
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
The Wilson Center
Abstract:
In 1989, while traveling through Spain, Kristen Ghodsee stared in disbelief at the television in the bus station in Barcelona as images appeared of the Berlin Wall crumbling. A year later, she backpacked through Eastern Europe to witness the unprecedented changes in the region. But these countries that held such promise soon suffered economic collapse, and Ghodsee wondered what went wrong.
Topic:
Economics, Gender Issues, Islam, and Religion
Political Geography:
Eastern Europe and Bulgaria

17. Obstacles Impeding the Regional Integration of the Kvemo Kartli Region of Georgia

Author:
Jonathan Wheatley
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
European Centre for Minority Issues
Abstract:
This report is intended to provide an overview of the current social, economic and political situation in five rayons (districts) of Kvemo Kartli province in south-eastern Georgia: Gardabani rayon, Marneuli rayon, Bolnisi rayon, Dmanisi rayon and Tsalka rayon. By identifying and providing information about the current problems impeding the regional integration of those parts of Kvemo Kartli province in which national minorities are concentrated, this working paper will act as a guide for defining priorities and ensuring more informed intervention in the area.
Topic:
Civil Society, Economics, and Politics
Political Geography:
Eastern Europe

18. Collective Bargaining Practices in Eastern Europe: Case Study Evidence from Romania

Author:
Aurora Trif
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
There are several studies on recent developments in collective bargaining in Eastern Europe, but there is still a debate about the extent to which collective bargaining practices resemble those in continental Western Europe. This paper aims to contribute to this debate, by examining primary data on collective bargaining practices in Romania using an actor-centred institutionalist approach. It focuses on collective bargaining in four large chemical companies. Comparisons are made to other countries in order to highlight the developments in Romanian cases. Unexpectedly, the study's findings point to an increase in state intervention in establishing the terms and conditions of employment after 1989, due to the state's new roles during the transformation process that affected job security. The study suggests a considerable increase in the influence of top managers in determining pay and working conditions, while trade unions retained the considerable influence over social benefits in large companies. The findings show continuance of certain pre-1989 practices, such as a persistence of high state intervention and a limited independence of the trade unions from the management. This paper contributes to a deeper understanding of institutional changes in the context of a shift from a centrally planned economy to a market-based economy.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Eastern Europe and Romania

19. Economic Reforms, Democracy and Growth in Eastern Europe and Eurasia

Author:
Robyn Murphy, Ron Sprout, and Paul Pleva
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
United States Agency for International Development
Abstract:
This research analyses the interaction between economic reforms, reforms, and economic growth. One of the salient characteristics of the transition region has been two very distinct patterns between economic and democratic reforms: convergence of the two reform dimensions in the CEE countries and divergence Eurasia. Nevertheless, results from econometric tests (which attempt to control for possible intervening influences) suggest that economic and democratic reforms are mutually reinforcing throughout the region, even in Eurasia. We also found evidencthat: (1) economic reforms have a stronger impact on democratic reforms than the reverse; (2) economic reforms favorably affect economic growth; (3) democratic refavorably affect economic growth indirectly (via economic reforms) if not directly; and (4) while the feedback effects from economic growth to reforms are more ambiguous, there is some evidence that economic growth may actually stifle democratic reforms, and/or economic contraction may facilitate democratization.
Topic:
Democratization, Development, and Economics
Political Geography:
Eurasia and Eastern Europe

20. Collective Bargaining Practices in Eastern Europe: Case Study Evidence from Romania

Author:
Aurora Trif
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
There are several studies on recent developments in collective bargaining in Eastern Europe, but there is still a debate about the extent to which collective bargaining practices resemble those in continental Western Europe. This paper aims to contribute to this debate, by examining primary data on collective bargaining practices in Romania using an actor-centred institutionalist approach. It focuses on collective bargaining in four large chemical companies. Comparisons are made to other countries in order to highlight the developments in Romanian cases. Unexpectedly, the study's findings point to an increase in state intervention in establishing the terms and conditions of employment after 1989, due to the state’s new roles during the transformation process that affected job security. The study suggests a considerable increase in the influence of top managers in determining pay and working conditions, while trade unions retained the considerable influence over social benefits in large companies. The findings show continuance of certain pre-1989 practices, such as a persistence of high state intervention and a limited independence of the trade unions from the management. This paper contributes to a deeper understanding of institutional changes in the context of a shift from a centrally planned economy to a market-based economy.
Topic:
Economics, Markets, and Political Economy
Political Geography:
Europe, Eastern Europe, and Romania

21. Strategic Unionism in Eastern Europe: The Case of Romania

Author:
Aurora Trif and Karl Koch
Publication Date:
07-2005
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The shift from centrally planned economies to market-oriented economic models presented trade unions in Eastern European countries with crucial choices in relation to their roles as industrial relations actors. This paper investigates whether (and why) unions have chosen adversarial and/or co-operative relationships with the employers, based on a strategic choice conceptual framework. It focuses on trade union relations with employers at national, sectoral and company levels in Romania. It is argued that adversarial and co-operative relations between unions and employers developed simultaneously after 1989, but co-operation was the prevalent approach. Evidence suggests that ideological legacies, former institutions and the initial decision to participate in the macroeconomic transformation played a key role in shaping unions' choices towards co-operation with employers. Although this paper confirms the widespread view that labour is rather weak in Eastern Europe, it indicates that unions can be proactive and shape their own future if they have the capacity to mobilise their members and union leaders have the skills and willingness to use both conflict and co-operation in their relationships with employers. The comparison of evidence from Romania with other Eastern European countries reflects on the stage of Romanian transformation and also illustrates a wider possible applicability of the theoretical framework employed for the study.
Topic:
Economics, Industrial Policy, and Political Economy
Political Geography:
Europe, Eastern Europe, and Romania

22. Trade Openness and Vulnerability in Central and Eastern Europe

Author:
Pierluigi Montalbano, Alessandro Federici, Umberto Triulzi, and Carlo Pietrobelli
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper offers a substantive contribution to the debate on the role of international trade on the development of emerging countries. The aim is to detect empirically the phenomenon of vulnerability induced by trade openness. The methodology adopts a forward-looking approach and tries to fill a missing link in the theory between trade shocks, volatility, and the wellbeing of countries, distinguishing between 'normal' and 'extreme' volatility.
Topic:
Development, Economics, Globalization, and International Trade and Finance
Political Geography:
Eastern Europe

23. From Bound Duties to Actual Protection: Industrial Liberalisation in the Doha Round

Author:
Mohamed Hedi Bchir, Lionel Fontagné, and Sébastien Jean
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
In the background of the Doha Round of trade negotiations, this study proposes a CGE assessment of multilateral liberalisation of market access for non-agricultural products. The scenarios considered include the so-called 'Girard proposal' (with alternative choices for the coefficient involved), the removal of tariff peaks and complete liberalisation. This study is the first to take into account the difference between bound and applied tariffs, while considering all the enforced preferential trade arrangements and computing tariff cuts at the detailed product level (HS-6 classification). Although the liberalisation of market access for non-agricultural products is found to be welfare-enhancing at the world level, cross-country distributive effects prove significant. A soft liberalisation would not significantly reduce applied duties in developing countries, owing to their considerable binding overhang. By contrast, a deep liberalisation would entail fierce price competition among those developing countries that are largely specialised in similar sectors and in the same product quality range.
Topic:
Economics, International Trade and Finance, and Treaties and Agreements
Political Geography:
Eastern Europe

24. The Politics of Institutional Learning and Creation: Bank Crises and Supervision in East Central Europe

Author:
Gerald A. McDermott
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This article examines the political conditions shaping the creation of new institutional capabilities. It analyzes bank sector reforms in the 1990s in three leading postcommunist democracies–Hungary, Poland, and the Czech Republic. It shows how different political approaches to economic transformation can facilitate or hinder the ability of relevant public and private actors to experiment and learn their new roles. With its emphasis on insulating power and rapidly implementing self-enforcing economic incentives, the “depoliticization” approach creates few changes in bank behavior and, indeed, impedes investment in new capabilities at the bank and supervisory levels. The “deliberativ e restructuring” approach fostered innovative, cost-effective monitoring structures for recapitalization, a strong supervisory system, and a stable, expanding bank sector.
Topic:
International Relations, Economics, and Politics
Political Geography:
Europe, Eastern Europe, Poland, and Hungary

25. Obstacles Impeding the Regional Integration of the Javakheti Region of Georgia

Author:
Jonathan Wheatley
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
European Centre for Minority Issues
Abstract:
This working paper is a consolidated and condensed analysis of a longer field report originally carried out as part of ECMI's action-oriented project “Defusing interethnic tension and promoting regional integration – the Javakheti Region of the Republic of Georgia”. Both the original field report, and this resulting analysis aim to provide an insightful overview of current the social, economic and political situation in two rayons (districts) of Georgia; Akhalkalaki rayon and Ninostminda rayon; which together combine to form a geographical area better known as the Javakheti Region in southern Georgia. By identifying and providing information about the current problems impeding the regional integration of Javakheti, this working paper will act as a guide for defining priorities and ensuring more informed intervention in the area.
Topic:
Economics, Ethnic Conflict, and Politics
Political Geography:
Eastern Europe and Georgia

26. Performance Indicators for the Monitoring and Evaluation of SALW Control Programmes

Publication Date:
11-2004
Content Type:
Working Paper
Institution:
South Eastern Europe Clearinghouse for the Control of Small Arms and Light Weapons
Abstract:
The trend is for SALW control (and DDR) programmes to become more integrated into national socio-economic development, therefore programme evaluation and the use of performance indicators are important to; 1) monitor the impact of a programme during its implementation; 2) provide management information during the implementation of a project; 3) verify that the programme is making progress towards achieving its objectives; and 4) to satisfy donors, governments and other stakeholders.
Topic:
Arms Control and Proliferation, Civil Society, and Economics
Political Geography:
Eastern Europe

27. Are the Balance of Payments Deficits in the Baltic Countries Sustainable?

Author:
Jorgen Drud Hansen and Morten Hansen
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
For almost a decade all three Baltic countries have witnessed substantial deficits on the current accounts of the balance of payments. This paper discusses whether this situation should be a matter of concern. Recent literature on the sustainability of balance of payments deficits is reviewed and put into a Baltic context. The main conclusion is that the recurrent large deficits in the Baltic countries pose a risk for the fixed exchange-rate policies until the countries adopt the euro. In the longer term, large deficits will influence the time path of convergence of living standards between the Baltic countries and the EU as a whole.
Topic:
Development and Economics
Political Geography:
Europe and Eastern Europe

28. Capital, Labor, and the Prospects of the European Social Model in the East

Author:
Dorothee Bohle and Bela Greskovitz
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
During the past decade of European economic integration vastly worse standards have emerged in work conditions, industrial relations, and social welfare in Eastern Europe than in the West. Area scholars explain this divide by labor weakness caused by the ideological legacy of communism, and do not problematize the impact of transnational capital. In contrast, this essay argues that the reason why the European social model has not traveled to the East is that its socio-economic foundations, the industrial building blocks of the historical compromise between capital and labor, have not traveled either. In the West, the compromise had been rooted in capital-intensive consumer durables industries, such as car-manufacturing, and their suppliers. These sectors brought together organized and vocal labor with businesses willing to accommodate workers' demands, because for them labor had been less a problem as a cost-factor and more important as factor of demand. However, the main driving force of the eastward expansion of European capital has been the relocation of labor-intensive activities where business relies on sweating masses of workers, whose importance as consumers is marginal, and who are weak in the workplace and the marketplace. With this general conceptualization of how the emerging new European division of labor constrains the social aspects of East European market societies as a background, the essay studies the cases of Hungarian electronics and Slovak car industries in order to better understand how particular features of various leading sectors mediate the general pattern.
Topic:
Economics, Government, and Human Welfare
Political Geography:
Europe and Eastern Europe

29. Los Balcanes: Entre el Pasado y el Presente. Una Introducción Históica a los Estudios Balcánicos

Author:
Slobodan Pajovic
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This working paper deals with the complex, turbulent and contradictory history of the Balkans region. It is argued that the tragic realities confronting the region derive mainly from its asymmetric geopolitical, economic and cultural position, and its high degree of vulnerability and dependence on Western Europe and the Near East. It suggests that it is possible to study the history of the region by examining processes of both internal fragmentation and external subordination. While the paper cannot constitute a complete or systematic study of the Balkans, it presents and overview of the most salient features in the region's historical, politico-economic and cultural development. Two case studies, Yugoslavia and Kosovo, help to highlight the broader trends.
Topic:
Economics, Human Welfare, and Politics
Political Geography:
Europe, Iran, Middle East, Eastern Europe, Kosovo, Yugoslavia, and Balkans

30. Sustainable Regional Development through Institutionalised Trans-frontier Cooperation in the Sofia-Skopje-Nis Triangle--Towards the Establishment of a Euroregion

Author:
Stoyan Totev and Maria Boyadjieva
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
The transition process in Central and Eastern Europe was associated with increasing intra-regional disparities. It appears also that the regional inequalities in South east Europe are relatively high creating in the same time significantly higher economic and social problems. That refers to Bulgaria, Macedonia and FR Yugoslavia whereas every reform face serious difficulties due to the lower readiness for accession to the EU structures as well as for their backwardness in the economic development. In countries like Czech Republic, Hungary and Slovenia there exist enough resources for facing the negative effects from one or another reform as well as the necessary readiness of the population the reform s to be carried out.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe, Eastern Europe, Yugoslavia, Bulgaria, and Macedonia

31. Cross-border business activities in the Small and Medium Enterprise sector in the Southern Adriatic border areas of Croatia, Montenegro and Bosnia and Herzegovina

Author:
Ivo Grkovic and Nikola Kalafatovic
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
Analyzing the area of our interest and its economic perspective requires us to take a step back in to the past and conclude that history rep eats itself. Traditionally, this has been the area of trade, communication, as well as war. The last fifty years, up until the disintegration of ex-Yugoslavia, represented the longest period of peace in this region of different cultures, nations and history. In ex-Yugoslavia, these differences did not represent a limiting factor, and therefore the transport of people as well as goods was free and unlimited. Although the state borders existed, in the legal sense they were not of great importance. We can say that people living in this region were both geographically and economically directed towards each other. However, economic differences were present, and Croatia ranked as the second most developed state of ex-Yugoslavia (after Slovenia).
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Bosnia, Herzegovina, Eastern Europe, Yugoslavia, Maryland, and Slovenia

32. Cross Border Trafficking in South Eastern Europe - Assessing Trafficking Activities in the Southern Adriatic Region

Publication Date:
09-2003
Content Type:
Working Paper
Institution:
South Eastern Europe Clearinghouse for the Control of Small Arms and Light Weapons
Abstract:
This study was commissioned by the South Eastern Europe Clearinghouse for the Control of Small Arms and Light Weapons (SEESAC). The purpose of the Ammunition Detection Study is to determine if there is evidence to support the SEESAC hypothesis that it may be more productive to specifically target the detection of ammunition for Small Arms and Light Weapons rather than the weapons themselves. SEESAC is a developing organisation, with a responsibility to identify information on the precise level of smuggling activity and also advise on measures to reduce cross border trafficking; clearly current search methodologies used to detect weapons and ammunition within the region are an important component of this advice. Following discussions with the SEESAC Team Leader a set of assumptions, to support the Terms of Reference (TOR), were agreed.Initial desktop research examined weapons and ammunition design and manufacture to determine if and why weapons can be more easily concealed than ammunition and what constituent parts are common or exclusive to one particular commodity. Further analysis was conducted to determine if ammunition and weapons are consistently transported together and examples of occurrences are provided. The investigation has involved visits to specialist organisations and national security agencies that have undertaken to provide data on suitable search and detection methodologies. (PDF, 30 pages, 1.02 MB)  Â
Topic:
Security, Arms Control and Proliferation, and Economics
Political Geography:
Bosnia, Moldova, Eastern Europe, Kosovo, Serbia, Bulgaria, Balkans, Romania, Macedonia, Albania, and Croatia

33. Optimality and Overuse of Labour in Estonian Manufacturing Enterprises

Author:
Almas Heshmati and Jaan Masso
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
For transition economies labour market flexibility is necessary for successful restructuring and reallocation of labour force and for coping with the requirements of the European Monetary Union. In this paper we apply a novel approach to the issue of labour market flexibility in transition countries by studying the optimality and efficiency of labour usage among Estonian manufacturing enterprises. A dynamic model is employed where both the long run optimal level of employment and the speed at which actual employment is adjusted to the optimal are modelled as functions of several variables. Firm level panel data from 1995 to 1999 were used. The results showed that in the long run employment responds greatest to wages, followed by valueadded and capital stock. Speed of adjustment and labour use optimality and efficiency show much greater variations over firms than over time. In the course of time there occurs both labour saving technical change and an increase in the efficiency of labour usage. On average there is shortage of labour compared to firm's own optimal level, while over use of labour compared to best-practice technology. Capital seems to be a binding constraint on the development of employment in the Estonian labour market.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
Eastern Europe

34. The Stabilization Efforts in the Balkan -Seven Theses -

Author:
Bernd Papenkort
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Austrian National Defence Academy
Abstract:
In the Balkans, the international community has made numerous costly efforts with the intention of laying the foundations for political stability and economic prosperity as well as giving the local population social perspectives. In view of recent developments in international politics (e.g. the fight against terrorism, the developments in Afghanistan) and political focal points such as the conflict between Israel and Palestine, we should, however, critically take stock of what has been achieved so far and consider measures of adjustment, where necessary. The following theses are food for thought, and I hope they will trigger a lively discussion.
Topic:
Economics, International Cooperation, International Organization, Non-Governmental Organization, and Terrorism
Political Geography:
Afghanistan, Israel, Eastern Europe, Palestine, and Balkans

35. Security Sector Reform in Lithuania: Theory and Practice

Author:
Robertas Sapronas
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Geneva Centre for Security Sector Governance (DCAF)
Abstract:
During the first half of the 1990s all Central and Eastern European (CEE) countries, including the three Baltic states of Lithuania, Latvia and Estonia, were struggling through the difficult process of transition toward a democratic system and market economy. The transformations of the post Cold War era had profound effects on practically every sector of the respective societies, which had to find their new role and place in the new world.
Topic:
Security, Cold War, Democratization, and Economics
Political Geography:
Eastern Europe

36. Banking and Finance Assistance

Author:
Eugene Spiro
Publication Date:
08-2001
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
The Banking and Finance Assistance Centre (BFAC) of the East West Institute is an independent, international centre whose mission is to provide assistance to financial sector leaders in the transition economies of Central and Eastern Europe (CEE) and the former Soviet Union (FSU). BFAC was established in 1992 by the East West Institute in response to the need expressed by bank executives and finance officials in CEE for a centre to provide impartial, professional, technical advice and assistance in the course of designing and implementing reform initiatives. Supported, among others, by the EWI network and in particular the United States Agency for International Development, BFAC's projects also cover capital markets and pension reform and small- and medium-sized enterprise development.
Topic:
Development and Economics
Political Geography:
United States, Europe, and Eastern Europe

37. The Role Of Transition Assistance: The Case Of Kosovo

Author:
Glenn Slocum
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
United States Agency for International Development
Abstract:
The Center for Development Information and Evaluation (CDIE) has responsibility for conducting Agency-wide evaluations of USAID assistance topics of interest to USAID managers. In 2000, USAID initiated an evaluation of the role of transition assistance, with a specific emphasis on the role and activities of the Office of Transition Initiatives (OTI). Transition assistance, as used here, refers to the OTI-administered programs providing flexible, short-term responses to help advance peaceful, democratic change in conflict-prone countries. This assistance is usually provided during the two-year critical period after conflict when countries are most vulnerable to renewed conflict or instability.
Topic:
Democratization, Development, Economics, Government, and Politics
Political Geography:
Eastern Europe and Kosovo

38. Reducing Urban and Industrial Pollution in the Czech Republic

Author:
Steve Gale and Matthew Addison
Publication Date:
08-2001
Content Type:
Working Paper
Institution:
United States Agency for International Development
Abstract:
A USAID project in the Czech Republic confronted air pollution at two levels: nationally, through a state environmental fund, and locally, through direct support to municipalities. The national approach proved to be far more effective. Results in Poland, though, suggest regional funds may be the ideal.
Topic:
Economics, Environment, Human Welfare, Politics, and Science and Technology
Political Geography:
Eastern Europe, Poland, and Czech Republic

39. Aftermath: Internally Displaced Women and Women's Organizations in Postconflict Georgia

Author:
Pat McNees
Publication Date:
04-2001
Content Type:
Working Paper
Institution:
United States Agency for International Development
Abstract:
ALL POST-SOVIET STATES underwent difficult political and economic transitions in the years after the breakup of the Soviet Union, but Georgia's was especially traumatic. Ethnic conflict broke out in Georgia virtually as soon as the Soviet Union collapsed. By 1992, Georgia's central authority had been diminished to near anarchy, the economy was in complete disarray, and the country had plunged into civil war that tore its fabric.
Topic:
Civil Society, Economics, Education, Gender Issues, and Migration
Political Geography:
Eastern Europe and Georgia

40. Urban and Industrial Pollution Programs: Czech Republic Case Study

Author:
Matthew Addison, Steven Gale, Keith Forbes, and Michael Gould
Publication Date:
04-2001
Content Type:
Working Paper
Institution:
United States Agency for International Development
Abstract:
In 1995 USAID Launched the Environmental Action Program Support Project. EAPS grew out of a 1993 international conference held in Lucerne, Switzerland, to develop a joint environmental action program. The project sought to decrease environmental degradation in six central and eastern European countries that were making the transition from centrally controlled economies and authoritarian governments to open markets and more democratic institutions. The Czech Republic was the first USAID-assisted country where EAPS was implemented.
Topic:
Development, Economics, Environment, and Government
Political Geography:
Eastern Europe, Switzerland, and Czech Republic

41. Pathways of Property Transformation: Enterprise Network Careers in Hungary, 1988-2000 Outline of an Analytic Strategy

Author:
Balázs Vedres and David Stark
Publication Date:
10-2001
Content Type:
Working Paper
Institution:
Institute for Social and Economic Research and Policy at Columbia University
Abstract:
This study analyzes the restructuring of a national economy by identifying the career pathways of its enterprises. This analysis is conducted in a setting strategically chosen as a case of rapid and profound economic transformation: the postsocialist Hungarian economy between 1988-2000. The goal of this study is to chart the multiple pathways of property transformation. Property pathways are conceptualized as the patterned sequences of change that firms undergo 1) in the composition of their ownership structure and 2) in their position within network structures of ties to other enterprises. These career pathways are neither unidirectional nor plotted in advance. The landscape and topography of the socioeconomic field are given shape and repeatedly transformed by the interaction of the multiple strategies of firms attempting to survive in the face of variable political, institutional, and market uncertainties. These different types of uncertainties will have different temporalities, and the study explores whether and how they increase or diminish in various periods. We develop and test specific hypotheses about how enterprise pathways along the compositional and positional property dimensions are related to the shifting contexts of these types of uncertainty. The core dataset for this study includes the complete ownership histories of approximately 1,800 of the largest enterprises in Hungary for a twelve year period, starting with the collapse of communism in 1989, recording each change in a company's top 25 owners on a monthly basis. Monthly entries for each enterprise also include changes in top management, boards of directors, major lines of product activity, raising or lowering of capital, and location of establishments and branch offices, as well as the dates of founding, mergers, bankruptcy, etc. Data on revenues, number of employees, and operating profit will be compiled from annual balance sheets. These rich data make it possible to map the life cycles of the business groups that are formed by network ties among enterprises, identifying not only when they arise, merge, or dissipate, but also the changing shapes of their network properties. To identify patterns of change, the study draws on sequence analysis, a research tool that makes possible the study of historical processes in an eventful way similar to historiography while retaining social scientific abstraction. Whereas sequence analysis has given us a perspective on careers as historical processes but has not been applied to business organizations, network analysis has been applied to business organizations but has not been done historically. The methodological innovation at the heart of this study is to combine the tools of sequence analysis and network analysis to yield a sequence analysis of changing network positions.
Topic:
Economics and Government
Political Geography:
Eastern Europe and Hungary

42. The Myth of Output Collapse after Communism

Author:
Anders Åslund
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
According to official statistics, output plunged in almost all Soviet-type countries toward the end of communism. Then in the first year of transition, the plunges turned even more dramatic, continuing for years. The total registered declines in GDP range from 13 percent in the Czech Republic from 1989 to 1992 to 77 percent in Georgia from 1989 to 1994. This collapse has been widely proclaimed as the worst depression in the industrialized world, exceeding the Great Depression of 1929–33. Both communist and post-communist statistics are deeply flawed, however—and in different ways.
Topic:
Communism and Economics
Political Geography:
Eastern Europe

43. Kosovo: A Strategy for Economic Development

Publication Date:
12-2001
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Kosovo cannot have a stable future without sustainable economic development. This report considers the task of promoting such development. After surveying the present state of the economy, it assesses the international efforts so far to lay the groundwork for future prosperity. It also considers the prospects for the former socially owned sector, including plans for privatisation and prospects for restructuring and investment.
Topic:
Economics, Emerging Markets, and Government
Political Geography:
Eastern Europe and Kosovo

44. Bosnia's Precarious Economy: Still not Open for Business

Publication Date:
08-2001
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Bosnia's economic reality is still bleak. After more than five years and five billion dollars of Dayton implementation, the country seems only at the beginning of an economic transition that should have begun in 1996.
Topic:
International Relations, Development, and Economics
Political Geography:
Bosnia and Eastern Europe

45. Kalmykia: From Oblivion to Reassertion?

Author:
François Grin
Publication Date:
10-2000
Content Type:
Working Paper
Institution:
European Centre for Minority Issues
Abstract:
This paper provides background information on Kalmykia, one of the least known constituent republics of the Russian Federation. It then assesses recent developments in the fields of culture and language, and presents the recently adopted (October 1999) Language Act of Kalmykia. The following discussion highlights the key features of the Act, and argues that it reflects a thoroughly modern approach to linguistic diversity, in particular in its handling of the respective position of the Russian and Kalmyk languages.
Topic:
Development, Economics, and Education
Political Geography:
Eastern Europe

46. Regional Economic Development in Eastern Europe: An Example from Poland

Author:
Raymond Struyk and Sharon Cooley
Publication Date:
07-2000
Content Type:
Working Paper
Institution:
Urban Institute
Abstract:
Small cities and towns are rapidly being recognized as key actors on the road to sustained economic development in the countries of Eastern Europe. Whether they are able to execute this central role will depend on their being able to undertake essential investments—which in turn requires the availability of finance and the strengthening of local administrative capacity.
Topic:
Development, Economics, and Government
Political Geography:
Europe and Eastern Europe

47. Serbia: The Milosevic Regime on the Eve of September Elections

Publication Date:
08-2000
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
The regime in Serbia has recovered its footing after the 1999 war with NATO and remains as hard-line as ever. Learning and gaining experience over the years has enabled the regime to “improve” its performance and become more efficient. Most analysts in Serbia agree that Milosevic will be able to stay in power indefinitely.
Topic:
Security, Foreign Policy, Economics, Government, Human Rights, and Politics
Political Geography:
Eastern Europe and Serbia

48. Serbia's Grain Trade: Milosevic's Hidden Cash Crop

Publication Date:
06-2000
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Nearly a year after NATO defeated Serbia in the war over Kosovo, the international community appears uncertain about how to remove Yugoslav President Slobodan Milosevic from power.
Topic:
Agriculture, Economics, International Trade and Finance, Politics, and United Nations
Political Geography:
Eastern Europe, Kosovo, Yugoslavia, and Serbia

49. Kosovo's Linchpin: Overcoming Division In Mitrovica

Publication Date:
05-2000
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Mitrovica has become the linchpin of Kosovo's future united status. The stakes are high. If the international community cannot re-establish Mitrovica as a single city, efforts to preserve a united Kosovo will also fail.
Topic:
Defense Policy, Economics, and Politics
Political Geography:
Eastern Europe, Kosovo, and Mitrovica

50. Montenegro: In the Shadow of the Volcano

Publication Date:
03-2000
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Montenegro has been a crisis-in-waiting for two years now, with Belgrade opposing efforts by a reform-minded government under President Milo Djukanovic to distance itself ever further from its federal partner Serbia. Federal President Slobodan Milosevic has steadily escalated the pressure against Djukanovic, probing the extent of NATO support for Montenegro and pushing the Montenegrins toward a misstep that might undermine their international backing. Each of the three possible policy-paths facing the Montenegro government, however, is unappealing in its own way:Going ahead with a referendum on independence for Montenegro would risk radicalising a population still peacefully divided over the issue, and would offer maximum provocation to Belgrade, which retains a powerful military presence in Montenegro. Maintaining the status quo may offer a better chance of avoiding open confrontation with Belgrade, but it leaves Montenegro in a limbo. Its friends are not offering all the help they could, on the grounds that it is not a sovereign state; but prospects for selfgenerated income through inward investment or revival of the tourist industry are still hostage to international risk perceptions. Achieving rapprochement with the Serbian government would be possible if Milosevic went. But Montenegro cannot afford to leave its future in the unsure hands of the present Serbian opposition. And as the atmosphere in Serbia steadily worsens, political and public opinion in Montenegro appears to grow ever less willing to compromise.
Topic:
Conflict Resolution, NATO, Economics, and Politics
Political Geography:
Eastern Europe, Serbia, and Montenegro