This article describes and assesses the impact of evolving labour market institutions after the onset of transition in South-East Europe on economic performance and, at the same time, the impact of international advice on the direction and speed of institutional change. Institutions analysed include employment protection legislation, features of passive and active labour market policies and trade unions and collective bargaining structures. Countries of the region could roughly be divided into two groups – first, covering successor states of former Yugoslavia, with more rigid, and second, covering former centrally planned economies, with more flexible labour market institutions. This divide suggests the importance of institutional tradition. A simple test is undertaken to indicate whether the two groups differ significantly with regard to economic and labour market performance. No firm evidence is found to support the assumption that more flexible labour regimes induce better economic results, contrary to what has been the leading paradigm in the region, promoted by World Bank and IMF. Conditionality is only a partial explanation for their dominant influence; we argue that their agenda is better articulated and communicated than competing agendas of ILO and EU.
International aid and assistance to the Western Balkans, which began more than two decades ago after the disintegration of sfr Yugoslavia, has been severely criticised on various grounds by academics, politicians, and domestic elites. One of the main points of criticism has been heavy foreign interference into domestic affairs, which deprives local policy-makers of ‘policy ownership.’ This paper uses four paradigmatic examples of reform in Serbia – in the areas of labor market, income taxation, pensions system, and privatization – to show that, despite the widely accepted view of the dominant role of international actors in the creation of the reform agenda, there was significant room for local policy-makers in Serbia to exercise full ownership over the ongoing reforms. What policy-makers really needed was expertise, a clear vision of the desired reforms, the determination to defend their agenda, and technical skills to implement it. The significantly different outcomes of the four areas of reform analyzed in this paper, despite involving virtually the same actors of international intervention, seem to illustrate well our hypothesis that the failure of some important sectoral reforms in Serbia during the post-2000 period was the result of the policy-makers’ own weaknesses, rather than the result of external conditionality.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.