Access to finance is crucial for developing the private sector in all economies. This chapter, along with three sub-dimensions, explores the necessity for businesses to be able to access financing sources to start up, grow, diversify and ultimately contribute to overall competitiveness. The first sub-dimension, bank financing framework, assesses the regulatory framework of bank financing, including the quality of banking industry legal framework, registration and information systems and the policies making bank finance inclusive. The second sub-dimension, access to alternative financing sources, focuses on the various means that businesses can get financing, encompassing access to capital markets, private equity as well as factoring and leasing. The third sub-dimension, digital finance, delves into the effects of digital solutions on payment services and the emergence of new avenues for business finance.
Agricultural development remains a priority for all economies, not only in response to the essential resource needs of a growing population but also due to its substantial contributions to total employment and GDP. The chapter analyses the performance and trends of agriculture policies across three sub-dimensions. The first sub-dimension, rural development and infrastructure, assesses strategies and programs related to rural infrastructure, livelihood support, and irrigation systems. The second sub‑dimension, agricultural support systems, covers the policy, governance and instruments in the agricultural sector. The third sub-dimension, food safety and quality, focuses on the policy framework regulating food safety and on the food quality legislation and agencies, which are key tools in an economy’s path towards productive and sustainable agriculture.
An effective anti-corruption policy is essential for promoting fair competition. This chapter, along four sub-dimensions, explores the effectiveness of the prevention, investigation and prosecution of corruption cases. The first sub‑dimension, anti-corruption policy and risk management, assesses the planning, coordination and monitoring of anti-corruption policies, including corruption risk assessments and corruption proofing of legislation. The second sub-dimension, prevention of corruption, focuses on anti-corruption public-awareness as well as the effectiveness of the legal framework regarding corruption prevention bodies, conflicts of interest, and whistleblower protection. The third sub-dimension, business integrity and corporate liability, explores the robustness of the framework for businesses integrity and regulatory mechanisms, as well as the liability of legal persons. The fourth sub-dimension, investigation and prosecution, assesses the capacities of specialised anti-corruption investigative and prosecutorial bodies in investigating and prosecuting high-level corruption cases.
This note focuses on the multi-faceted structural challenges in the Western Balkans, which have exacerbated by the COVID-19 pandemic, and it assesses the economic impact of COVID-19 on the region, with special focus on SMEs, tourism, education, employment, digitalisation, trade, and investment. As governments combat the economic and societal consequences of the crisis, the note offers policy considerations towards the objective of building back better a better future, with more inclusive, sustainable and resilient economies.
The future sustainable economic development and well-being of citizens in South East Europe depend on greater economic competitiveness. Reinforcing the region’s economic potential in a post-COVID-19 context requires a holistic, inclusive and growth‑oriented approach to policy making. Against the backdrop of enhanced European Union (EU) accession prospects and a drive towards deeper regional integration, the governments of the six Western Balkan (WB6) economies have demonstrated a renewed commitment to enacting policy reforms.
The third edition of Competitiveness in South East Europe: A Policy Outlook comprehensively assesses policy reforms in the WB6 economies across 16 policy dimensions crucial to their competitiveness. It leverages a highly participatory assessment process, which brought together the views of OECD experts, WB6 policy makers and local non-governmental stakeholders to create a balanced and realistic depiction of their performance. The report seeks to provide WB6 policy makers with a multi-dimensional benchmarking tool, enabling them to compare performance against regional peers as well as OECD good practices, and to design future policies based on rich evidence and actionable policy recommendations.
Economy-specific profiles complement the regional assessment for the first time in this edition of Competitiveness in South East Europe: A Policy Outlook, and provide each WB6 economy with an in-depth analysis of their competitive potential as well as policy recommendations tailored to their specific challenges to inform their structural economic reforms and sustainable development agenda.
This chapter offers an overview of Kosovo’s economic developments since the Competitiveness Outlook 2021, with a special focus on the economic impact of recent external shocks and economic convergence. The chapter also examines the progress made and challenges encountered in achieving the Sustainable Development Goals. It also recaps the progress made towards EU accession, including the financial and development support provided by the EU for Kosovo’s accession efforts. Altogether, this sets the stage for in-depth examination across 15 policy dimensions in the subsequent chapters, all necessary for sustaining economic competitiveness.
Digital transformation, driving efficiency and productivity through the adoption of digital technologies and data utilisation, holds promise for fostering economic activity and competitiveness. This chapter, across four sub-dimensions, assesses the scope and quality of the policy framework and strategies and the implementation and adoption by Kosovo. The first sub-dimension, access, explores government policies and initiatives to enable network infrastructure investment and broadband services take-up and increase data accessibility. The second, use, delves into the government’s plan to implement programmes to develop a user-centric digital government and help businesses achieve a digital transformation. The third, society, assesses whether governments have planned and implemented programmes to reduce the digital divide and create an inclusive society through green digital technologies. The fourth, trust, examines the economies’ frameworks and how they are being implemented to protect data and privacy, build trust in e-commerce and ensure cybersecurity through effective digital risk management systems.
The Western Balkans region has clear aspirations to improve its economic competitiveness and integrate further into Europe. A highly skilled population is critical to achieving these goals, which makes creating and maintaining high quality and equitable education systems a vital part of regional development efforts. Results from the Programme for International Student Assessment (PISA) show that learning outcomes in the region have improved over time, but that the improvement has not been equitable. Some students are performing similarly to students from countries in the European Union, while others are lagging further behind.
This report, developed in co-operation with the European Commission and UNICEF, analyses PISA data in detail to identify the strengths, challenges and unique features of education systems in the Western Balkans. Drawing upon a rich knowledge base of education policy and practice in the region, it makes recommendations about how systems in the region can improve learning for all students. This report will be of interest to regional policy-makers as well as individuals who wish to learn more about education in the Western Balkans.
A robust education policy framework is essential for developing human capital and meeting the labour market’s need for a skilled and productive labour force. This chapter, composed of four sub-dimensions, assesses the presence and efficacy of education strategies, legislation, programmes and institutions. The first sub-dimension, equitable education for an inclusive society, examines system governance and the quality of pre-university education starting from preschool. The second, teachers, looks at the selection, initial training and ongoing professional development and management of the teaching workforce. The third sub-dimension, school-to-work transition, focuses on VET governance and the labour market relevance and outcomes of higher education. The fourth sub-dimension, skills for green-digital transition, explores the frameworks and initiatives for fostering green and digital skills in education curricula.
Effective employment policies are crucial for forging a strong economy and fostering economic development and social inclusion. This chapter aims to assess the regulatory framework and policies governing employment, as well as the institutional capacity for implementation. The first sub-dimension focuses on inclusive labour market governance, specifically looking at the employment regulatory and policy framework, labour inspectorates, social dialogue and inclusive employment policies. The second sub-dimension, social protection and activation policies, analyses the public employment services, mutual obligations framework and active labour market programmes. The third sub-dimension, skills for adaptable labour markets, assesses the skills mismatches in the labour market and initiatives for developing digital and green skills. The fourth sub-dimension, expanding the skills pool, focuses on attracting highly skilled migrants and diaspora.
The competitiveness of any economy is heavily influenced by its energy policies. This chapter investigates the energy policies in place to ensure that energy markets are well-regulated, sustainable and competitive. The first sub-dimension, governance and regulation, focuses on how the energy markets are governed and whether policy is conducive for establishing efficient and competitive energy markets. The second, energy security, explores measures taken to make the energy sector more resilient, including through the diversification of energy supply. The third sub‑dimension, sustainability, focuses on the energy sector decarbonisation, including through the promotion of renewable energy and energy efficiency policies. The fourth sub-dimension, energy markets, analyses how energy markets are operated, whether competition is used to promote efficient allocation of energy resources, and the degree of regional integration.
A healthy and sustainable environment is crucial for economic competitiveness as it supports resource efficiency, enhances resilience to climate-related risks, fosters innovation, and attracts investments while mitigating environmental degradation and associated costs. The chapter analyses the robustness and comprehensiveness of environment policies across four sub-dimensions. The first sub-dimension, climate action, assesses strategies aimed at both mitigating and adapting to climate change. The second sub-dimension, circular economy, focuses on policies promoting waste minimisation, resource efficiency, as well as sustainable production and consumption. The third sub-dimension, protection of ecosystems, explores challenges in managing freshwater, biodiversity and forestry, as well as land-use. The fourth sub-dimension, depollution, analyses policies related to air quality, water supply and sanitation, and industrial risk management, all of which are paramount for enhancing competitiveness while ensuring environmental sustainability.
Kosovo has made notable advancements since the 2021 Competitiveness in South East Europe: A Policy Outlook (Competitiveness Outlook), positively progressing across 12 of the 15 policy dimensions, regressing in two and stagnating in one. Kosovo experienced the strongest score increases in the areas of investment policy and promotion, and agriculture and tourism policies. Figure 1 illustrates that Kosovo is outperforming the average of the six Western Balkan (WB6) economies across five policy dimensions, with eight areas lagging. Kosovo positions itself as a regional leader in state-owned enterprises (SOEs) and trade policy. In contrast, Kosovo falls behind in the areas of science, technology and innovation (STI), employment, anti-corruption, and access to finance policies, scoring below at least four of its Western Balkan neighbours, highlighting the areas requiring substantial improvement for achieving convergence with the European Union (EU). For additional insights into Kosovo’s performance across various dimensions, trends over time or comparisons with other economies, please refer to the Western Balkans Competitiveness Data Hub at https://westernbalkans-competitiveness.oecd.org/.
The Western Balkans Competitiveness Outlook (CO) 2024 is the fourth edition of the OECD’s flagship publication that offers an in-depth assessment across 15 policy areas key to bolstering economic competitiveness in the Western Balkans. The CO provides comprehensive guidance to navigate economic reforms, enhance regional co-operation and help the region’s economies align their legal frameworks and policies with those of the OECD and EU. It also enables policy makers to track performance over time, by comparing outcomes against those reported in the previous editions since 2016.
Government at a Glance: Western Balkans presents information on public governance in the Western Balkan region – covering Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia, and compares it to OECD and OECD-EU countries. This first regional edition features 40 indicators on public finance, public employment, centre of government, budgeting practices and procedures, human resources management, public procurement, digital government, core government results and serving citizens. Governance indicators provide important benchmarks on public administration systems, practices and performance. Indicators are presented in a user-friendly format using charts, with brief descriptive analyses of the major findings, and a methodological section on the definition of the indicator and any limitations in data comparability.
The paper provides a comparative analysis of the implementation of the recently adopted laws on administrative procedure in the five Western Balkan administrations. First the paper confirms the compliance of the laws with the principles of good administrative behaviour that have been established by the Council of Europe recommendations, the Charter of Fundamental Rights of the European Union and the Principles of Public Administration. Subsequently, the application of these principles in practice is reviewed on the basis of three sample administrative procedures. Finally, the paper identifies the main implementation challenges and their causes as well as suggests measures for overcoming the challenges on the basis of experiences from EU and OECD member states.
Supreme audit institutions (SAIs) are a critical part of public accountability systems. They ‘watch’ over governments’ use of public money and report about it publicly, helping to increase transparency. SAIs have an interest in strongly engaging with external stakeholders – including citizens – to make sure that their work is relevant, understood and used to hold governments to account.
This paper provides a compilation of European SAIs’ practices on communication, co-operation and collaboration with external partners and is intended to provide inspiration to SAIs of EU candidate countries and potential candidates to further strengthen their engagement with their non-governmental stakeholders.
Creating an attractive environment for investors is essential to stimulate economic activity and to foster sustainable economic growth. This chapter assesses the scope and effectiveness of existing policies and strategies that aim to enhance investment volume and quality. The first sub-dimension, investment policy framework, assesses the robustness of legal framework for investment, the efficiency of dispute settlement mechanisms, as well as intellectual property rights enforcement and awareness-raising capacity. The second sub-dimension, investment promotion and facilitation, focuses on investment promotion agency structures, investment promotion strategies and investor incentives, all geared towards attracting foreign direct investment. The third sub-dimension, mobilising sustainable investment, explores the strategic framework for a sustainable investment governance, while also reflecting on the scope of financial and technical support allocated to sustainable investment.
The Western Balkans region has come a long way over the last two decades in achieving economic and social progress. Its people are the region’s greatest asset. Yet faced with a lack of opportunities many, particularly the young, decide to emigrate. To make the most of its future the region must invest in its attractiveness as a place to live, work and invest in.
This report comes as a follow-up to the earlier publication Multi-dimensional Review of the Western Balkans: Assessing Opportunities and Constraints. It builds on an extensive peer-learning process that brought together experts from across the region and beyond. The report provides suggestions and recommendations for three strategic priorities that can help create opportunities and boost the quality of life. First, better education and more competencies are the basis for raising productivity, creating jobs, encouraging civic participation and making the region an attractive destination. Second, social cohesion is the bedrock of resilient societies and requires stronger labour market policies and effective social protection that can cushion people’s hardship and provide them with new opportunities. Third, cleaner air and more sustainable energy are indispensable for boosting the region’s quality of life and economic opportunities.