The Economics of Secession – Analysing the Economic Impact of the Collapse of the Former Yugoslavia

33 Pages Posted: 25 Sep 2014

See all articles by Andrés Rodríguez-Pose

Andrés Rodríguez-Pose

London School of Economics & Political Science (LSE) - Department of Geography and Environment

Marko Stermsek

London School of Economics & Political Science (LSE)

Date Written: September 2014

Abstract

This paper looks at the economic impact of secession through the lens of the disintegration of the former Yugoslavia. It uses an econometric analysis covering the period between 1956 and 2011 – including a series of factors linked to the independence process, socioeconomic and structural controls, and the level of development – in order to assess whether a) breaking away from the former Yugoslavia delivered an ‘independence dividend’ to the newly independent countries and whether b) independence had a more favourable impact in richer, rather than poorer territories. The results of the analysis underline that there has been no favourable economic impact of secession and that how secession was achieved is key in understanding the subsequent economic performance of the newly independent countries. In cases of secession without conflict, independence did not have a noticeable impact on ensuing economic performance. Secession achieved by conflict, by contrast, seriously dented growth prospects.

Keywords: conflict, economic growth, Europe, independence, secession, Yugoslavia

JEL Classification: F53, H77

Suggested Citation

Rodríguez-Pose, Andrés and Stermsek, Marko, The Economics of Secession – Analysing the Economic Impact of the Collapse of the Former Yugoslavia (September 2014). CEPR Discussion Paper No. DP10134, Available at SSRN: https://ssrn.com/abstract=2501617

Andrés Rodríguez-Pose (Contact Author)

London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Marko Stermsek

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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