IDEAS home Printed from
   My bibliography  Save this article

A Diagnostics Approach To Economic Growth In Small Open Economies: The Case Of The Republic Of Macedonia


  • Dragan TEVDOVSKI

    () (Dragan TEVDOVSKI, Ss. Cyril and Methodius University in Skopje, Faculty of Economics – Skopje, Skopje, Republic of Macedonia)

  • Vladimir FILIPOVSKI

    () (Vladimir FILIPOVSKI, Ss. Cyril and Methodius University in Skopje, Faculty of Economics – Skopje, Skopje, Republic of Macedonia)


    () (Igor IVANOVSKI, Ss. Cyril and Methodius University in Skopje, Faculty of Economics – Skopje, Skopje, Republic of Macedonia)


Macedonia’s economy is under-performing. The unemployment rate is constantly one of the largest in Europe; and, almost one third of the population lives below the poverty line. Reforms have been put in place, but they have not done enough to solve the key problems. The present paper applies the growth diagnostics’ methodology, proposed by Hausmann et al. (2005), in order to identify the most binding constraints on economic activity. We emphasize institutional framework and distortions of the legal system and the rule of law as the key binding constraint for growth. Especially, we point out to: large informal economy, dependence of the judicial system on the political elite, political patronage and legal and regulatory uncertainties. In addition, we find infrastructure, human capital and information externalities as possible binding constraints in the near future.

Suggested Citation

  • Dragan TEVDOVSKI & Vladimir FILIPOVSKI & Igor IVANOVSKI, 2014. "A Diagnostics Approach To Economic Growth In Small Open Economies: The Case Of The Republic Of Macedonia," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 13, pages 47-68, June.
  • Handle: RePEc:aic:revebs:y:2014:i:13:tevdovskid

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Yaroslava Babych & Michael Fuenfzig, 2012. "An Application of the Growth Diagnostics Framework: The Case of Georgia," Working Papers 001-12, International School of Economics at TSU, Tbilisi, Republic of Georgia.
    2. Jesus Felipe & Norio Usui & Arnelyn Abdon, 2011. "Rethinking The Growth Diagnostics Approach: Questions From The Practitioners," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 251-276.
    3. Magnoli Bocchi, Alessandro, 2008. "Rising growth, declining investment : the puzzle of the Philippines," Policy Research Working Paper Series 4472, The World Bank.
    4. Ricardo Hausmann & Dani Rodrik, 2005. "Self-Discovery in a Development Strategy for El Salvador," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2005), pages 43-101, August.
    5. Hausmann, Ricardo, 2008. "Is Search of the Chains That Hold Brazil Back," Working Paper Series rwp08-061, Harvard University, John F. Kennedy School of Government.
    6. Ianchovichina, Elena & Gooptu, Sudarshan, 2007. "Growth diagnostics for a resource-rich transition economy : the case of Mongolia," Policy Research Working Paper Series 4396, The World Bank.
    7. Marcela Meléndez Arjona & Arturo Harker Roa, 2008. "Revisiting economic growth in Colombia. A microeconomic perspective," Working Papers Series. Documentos de Trabajo 009137, Fedesarrollo.
    8. Ricardo Hausmann, 2006. "Economic Growth: Shared Beliefs, Shared Disappointments?," CID Working Papers 125, Center for International Development at Harvard University.
    9. repec:idb:brikps:72778 is not listed on IDEAS
    10. Ricardo Hausmann & Bailey Klinger & Rodrigo Wagner, 2008. "Doing Growth Diagnostics in Practice: A 'Mindbook'," CID Working Papers 177, Center for International Development at Harvard University.
    11. repec:idb:brikps:81002 is not listed on IDEAS
    12. Colin C. Williams & Sara Nadin, 2012. "Tackling Undeclared Work in the European Union," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(02), pages 20-25, July.
    13. Kunal Sen & Colin Kirkpatrick, 2011. "A diagnostics approach to economic growth and employment policy in low income economies: The case of Kosovo," Journal of International Development, John Wiley & Sons, Ltd., vol. 23(1), pages 132-154, January.
    14. World Bank, 2008. "Kenya : Accelerating and Sustaining Inclusive Growth," World Bank Other Operational Studies 18927, The World Bank.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Meerim Sydykova, 2015. "Diagnosing Growth Constraints in Central Asia: The Case of the Kyrgyz Republic," ERSA conference papers ersa15p1626, European Regional Science Association.

    More about this item


    economic development; growth diagnostics; economic reform; Macedonia;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aic:revebs:y:2014:i:13:tevdovskid. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sireteanu Napoleon-Alexandru). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.