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Costs and Benefits of Kosovo's Future Status




Stability and normalization should be the crucial ingredients of Kosovo's future status. If achieved, it would lead to strong economic recovery in Kosovo and to more sustainable economic growth in Serbia. Chances for positive economic development, strong recovery and sustained long-term growth are significant if normalization is achieved. Kosovo's potential growth rate could be close to 7% to 8% per year in the medium run while Serbia could sustain a convergence growth rate above 5% per year. Both would also benefit from a 'peace dividend', i.e., lower security costs. Of the scenarios considered (i) full Serbian sovereignty, (ii) substantial autonomy for Kosovo, (iii) supervised independence in accordance with Ahtisaari's Plan, and (iv) Serbian and Kosovo partnership of some sort, only the last one would provide for a significant decline of risks, for increased investment and trade, for improved prospects of EU integration and for strong recovery in Kosovo and sustained growth in Serbia, whereas any solution that would be rejected by any of the parties would trigger increased fiscal and security costs and impair investment and GDP.

Suggested Citation

  • Vladimir Gligorov, 2007. "Costs and Benefits of Kosovo's Future Status," wiiw Research Reports 342, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:rpaper:rr:342

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    Cited by:

    1. Vasily Astrov & Vladimir Gligorov & Peter Havlik & Sandor Richter, 2011. "Monthly Report No. 7/2011," wiiw Monthly Reports 2011-07, The Vienna Institute for International Economic Studies, wiiw.
    2. Vladimir Gligorov, 2011. "What price nationalism?," wiiw Policy Notes 5, The Vienna Institute for International Economic Studies, wiiw.
    3. Duval, Laetitia & Wolff, Fran├žois-Charles, 2015. "Ethnicity and remittances: Evidence from Kosovo," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 334-349.

    More about this item


    Serbia; Kosovo; post-conflict settlement; fiscal costs and benefits;

    JEL classification:

    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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