Economic convergence of the Balkan countries towards the European Union

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Abstract

This paper aims to analyze the economic performance of Balkan countries in comparison to the European Union (EU) average, with the objective of assessing the convergence of Balkan nations toward the EU during the period 2000–2019. The economic variables under consideration encompass per capita income, the corruption perception index (CPI), salary levels, and direct foreign investments. Employing β-convergence, rooted in neoclassical growth theories, this study aims to test the hypothesis that economically disadvantaged countries experience more rapid growth in per capita income than their wealthier counterparts. The empirical findings of this investigation reveal a discernible long-term convergence among the Balkan countries themselves, as well as towards the EU member states. The rate of convergence exhibits variations contingent upon the developmental status of the respective countries, along with nuances related to their economic structure and corruption levels. Despite these observed convergences, a substantial gap persists, and the pace of economic integration of Balkan nations into the EU appears to be a gradual process. This study underscores the complex relationship between economic convergence, country-specific characteristics, and the broader context of regional integration.

Keywords: Economic Convergence, Economic Growth, Balkan Countries

Authors’ individual contribution: Conceptualization — S.G. and J.A.; Methodology — S.G. and J.A.; Software — S.G. and J.A.; Validation — S.G. and J.A.; Investigation — S.G. and J.A.; Resources — S.G. and J.A.; Writing — S.G. and J.A.; Supervision — S.G.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: E24, O11, O57

Received: 07.10.2023
Accepted: 19.03.2024
Published online: 22.03.2024

How to cite this paper: Gashi, S., & Avdulaj, J. (2024). Economic convergence of the Balkan countries towards the European Union [Special issue]. Journal of Governance & Regulation, 13(1), 471–479. https://doi.org/10.22495/jgrv13i1siart19