Political sources of growth and competitiveness contemporary Serbia in comparative perspective

Abstract

The present paper explores the levels of growth and competitiveness in Serbia with regard to the institutional, political and economic environment of the country, providing a detailed report. The paper explains: 1) the significance of economic growth in general in order to inform the reader about the importance and necessity for an environment reinforcing economic growth within a country, 2) the link between economic growth and the levels of competitiveness in the country, as well as on the institutional, political and economic determinants that can positively or negatively affect growth, 3) the political, institutional and economic background of the Balkan region and Serbia in particular, in order to assist the reader in understanding how the current institutional and economic environment of the Balkan region and Serbia were formed during the period of post-communist transition, 4) the level and trends of the competitiveness of Serbia’s institutional, economic and business environment, in a longitudinal and comparative examination, in order to detect specific inefficiencies in its growth performance. The analysis concluded that the country has many weaknesses, but the most important ones are inefficient institutions and a weak rule of law, which have allowed corruption to spread to every sector. To further analyze the issue, a regression and two correlation models were created in order to detect the factors that have the strongest impact on Serbia’s economic competitiveness, using quantitative methods. The results confirmed that economic growth is Serbia mostly depends on efficient institutions and a solid rule of law, and not on FDIs, which are not sufficient by themselves to guarantee growth. Based on the findings of this comprehensive analysis, the paper makes specific recommendations about improving the most problematic aspects of Serbia’s competitiveness performance. In addition, the qualitative and quantitative studies led to a number of conclusions regarding growth and competitiveness in Serbia, and the country’s future prospects. It seems that major reforms are needed, in the direction of Serbian EU accession, for the country to enter a stable path towards development. Those reforms need to be complementary, taking place in all required sectors simultaneously, to have a strong impact