Exploring the Effects of Weak Institutions on Economic Insecurity in Kosovo

Abstract

Many post-conflict states, despite large-scale development aid, continue to experience chronic underdevelopment. This research will use institutional economics and the example of Kosovo to examine the relationship between institutional structures and economic insecurity, as an indicator of development outcomes. This paper argues that while Kosovo’s parallel institutional structure is quite unique, the structure and uncertain nature of Kosovo’s post-conflict institutions make them weak which is a source of economic insecurity which undermines development efforts. This paper also refutes some of the primacy given to formal institutions as a source of development and concludes that the makeup of formal and informal institutions in Kosovo proves to have a somewhat complex relationship to economic insecurity and further to overall development outcomes. The paper concludes that a focus on developing the quality of institutions in Kosovo may be an effective development policy as it could help to decrease economic insecurity.

Résumé

De nombreux États en sortie de conflit restent en situation de sous-développement chronique en dépit d’une aide au développement apportée à grande échelle. Cette étude se sert de l'économie institutionnelle et de l'exemple du Kosovo pour examiner la relation entre les structures institutionnelles et l'insécurité économique comme indicateur des résultats obtenus en matière de développement. Cet article fait valoir que, bien que la structure institutionnelle parallèle du Kosovo soit tout à fait unique, la structure et la nature incertaine des institutions qui datent d’après le conflit au Kosovo les affaiblissent, et représentent une source d’insécurité économique qui mine les efforts de développement. Cet article refuse également en partie d’accorder la primauté aux institutions formelles en tant que source de développement et conclut que la composition des institutions formelles et informelles au Kosovo s'avère avoir une relation quelque peu complexe avec l'insécurité économique et, au-delà, avec les résultats globaux obtenus en matière de développement. L’article conclut que le fait de se concentrer sur le développement de la qualité des institutions au Kosovo peut être une politique de développement efficace car elle pourrait contribuer à réduire l'insécurité économique.

This is a preview of subscription content, access via your institution.

References

Primary References

  1. Andric, Milica. 2017. NGO Activ. Interview in Mitrovica North, January 19, 2017.

  2. Anonymous-a. 2017. International Organisation. Interview in Zvecan, Kosovo, January 18, 2017.

  3. Anonymous-b. 2017. Local NGO. Interview in Zvecan, Kosovo, January 18, 2017.

  4. Anonymous-c. 2017. Local NGO. Interview in Mitrovica North, January 18, 2017.

  5. Anonymous-d. 2017. International Organisation. Interview in Prishtina, Kosovo, January 13, 2017.

  6. Anonymous-e. 2017. International Organisation. Interview in Prishtina, Kosovo, January 13, 2017.

  7. Anonymous-f. 2017. International Organisation. Interview in Prishtina, Kosovo, January 13, 2017.

  8. Hajredini, Shqipe. 2017. Organization for Cooperation and Security in Europe. Interview in Prishtina, Kosovo, January 16, 2017.

  9. Hasani, Hysni. 2017. The Ideas Partnership. Interview in Prishtina, Kosovo, January 17, 2017.

  10. Islami, Arijeta. 2017. The Ideas Partnership. Interview in Prishtina, Kosovo, January 17, 2017.

  11. Jakovljevic, Jovana. 2017. Institute for Territorial Economic Development. Interview in Mitrovica North, January 19, 2017.

  12. Maksimovic, Nenad. 2017. Center for Peace and Tolerance. Interview in Prishtina, Kosovo, January 17, 2017.

  13. Osmanaj, Liridona. 2017. United Nations Development Program/ Prosperity Initiative Kosovo. Interview in Prishtina, Kosovo, January 16, 2017.

  14. Sejdaj, Arben. 2017. The Ideas Partnership. Interview in Prishtina, Kosovo, January 17, 2017.

  15. Xharra, Jeta. 2017. Balkan Investigative Reporting Network (BIRN). Interview in Prishtina, Kosovo, January 16, 2017.

Secondary References

  1. Acemoglu, D., and J.A. Robinson. 2012. Why nations fail: The origins of power, prosperity, and poverty. New York: Crown Business.

    Google Scholar 

  2. Aron, J. 2000. Growth and institutions: A review of the evidence. World Bank Research Observer 15 (1): 99–135.

    Article  Google Scholar 

  3. Bates, R. 1995. Social dilemmas and rational individuals: An assessment of the new institutionalism. In The new institutional economics and third world development, ed. J. Harriss, J. Hunter, and C. Lewis, 27–48. London: Routledge.

    Google Scholar 

  4. Birdsall, N. 2007. Do no harm: Aid, weak institutions and the missing middle in Africa. Development Policy Review 25 (5): 575–598.

    Article  Google Scholar 

  5. del Castillo, G. 2008. Re-building war-torn states. Oxford: Oxford University Press.

    Google Scholar 

  6. Chang, H. 2002. Breaking the mould: An institutional political economy alternative to the neo-liberal theory of the market and the state. Cambridge Journal of Economics 26 (5): 539–560.

    Article  Google Scholar 

  7. Coase, R.H. 1960. The problem of social cost. Law & Economics 3: 1–44.

    Article  Google Scholar 

  8. Cocozzelli, F. 2016. Ethnic boundaries and politics in Kosovo. In Ethnic minorities and politics in post-socialist Southeastern Europe, ed. S. Ramet and M. Valenta, 263–282. Cambridge: Cambridge University Press.

    Google Scholar 

  9. Danielsson, A. 2015. Field notes on informality’s culture of ubiquity: Recognition and symbolic power within informal economic practices in Kosovo. In Informal economies in post-socialist spaces: Practices, institutions and networks, ed. J. Morris and A. Polese, 117-138. London: Palgrave Macmillan.

    Google Scholar 

  10. Dequech, D. 2002. The demarcation between the “old” and the “new” institutional economics: Recent complications. Journal of Economic Issues 36 (2): 565–572.

    Article  Google Scholar 

  11. Divjak, B., and M. Pugh. 2008. The political economy of corruption in Bosnia and Herzegovina. International Peacekeeping 15 (3): 373–386.

    Article  Google Scholar 

  12. Harriss, J., J. Hunter, and C. Lewis, eds. 1995. The new institutional economics and third world development. London: Routledge.

    Google Scholar 

  13. Hickey, S., and A. du Toit. 2013. Adverse incorporation, social exclusion and chronic poverty. In Chronic poverty: Concepts, causes and policy, ed. A. Shepherd and J. Brundt, 134–159. Basingtike: Palgrave Macmillan.

    Google Scholar 

  14. Hodgson, G. 1988. Economics and institutions: A manifesto for a modern institutional economics. Cambridge: Polity Press.

    Google Scholar 

  15. Hodgson, G. 2007. The revival of Veblenian institutional economics. Journal of Economic Issues 41 (2): 325–340.

    Google Scholar 

  16. Jacobs, Elisabeth. 2007. The politics of economic insecurity. Brookings. https://www.brookings.edu/research/the-politics-of-economic-insecurity/.

  17. Jakovljevic, J., S. Sovrlic, and M. Milenkovic. 2016. Do we live better? Effects of financial assistance to North Kosovo after the Brussels agreement. Mitrovica: Institute for Territorial Economic Development.

    Google Scholar 

  18. Jutting, J. 2003. Institutions and development: A critical review. OECD Working Paper No. 210.

  19. Khan, M.H. 1995. State failure in weak states: A critique of new institutionalist explanations. In The new institutional economics and third world development, ed. J. Harriss, J. Hunter, and C. Lewis, 1–86. London: Routledge.

    Google Scholar 

  20. Khan, M.H. 2010. Political settlements and the governance of growth-enhancing institutions. London: SOAS University of London.

    Google Scholar 

  21. Knight, J. 1992. Institutions and social conflict. Cambridge: Cambridge University Press.

    Google Scholar 

  22. Kosovo Agency of Statistics (KAS). 2019. https://ask.rks-gov.net/en/kosovo-agency-of-statistics/add-news/labour-force-survey-q2-2019.

  23. Kosovo Two Point Zero. 2019. Fighting with taxes. https://kosovotwopointzero.com/en/fighting-with-taxes/.

  24. Lemay-Hebert, N., and S.M. Murshed. 2016. Rentier statebuilding in a post-conflict economy: The case of Kosovo. Development and Change 47 (3): 517–541.

    Article  Google Scholar 

  25. Morris, J., and A. Polese, eds. 2015. Informal economies in post-socialist spaces: Practices, institutions and networks. London: Palgrave Macmillan.

    Google Scholar 

  26. Narayan, D., R. Patel, K. Schafft, A. Rademacher, and S. Koch-Schulte. 2000. Voices of the poor: Can anyone hear us? New York, NY: Published for the World Bank, Oxford University Press.

    Google Scholar 

  27. North, D. 1991. Institutions. The Journal of Economic Perspectives 5 (1): 97–112.

    Article  Google Scholar 

  28. North, D. 1994. Economic performance through time. The American Economic Review 84 (3): 359–368.

    Google Scholar 

  29. North, D. 1995. The new institutional economics and third world development. In The new institutional economics and third world development, ed. J. Harriss, J. Hunter, and C. Lewis, 17–26. London: Routledge.

    Google Scholar 

  30. Ostrom, E. 1990. Governing the commons: The evolution of institutions for collective action. Cambridge: Cambridge University Press.

    Google Scholar 

  31. Prelec, M., and N. Rashiti. 2015. Serb integration in Kosovo after the Brussels agreement. Balkans Policy Research Group. https://balkansgroup.org/wp-content/uploads/2015/03/Serb-Integration-in-Kosovo-After-Brussels-Agreement.pdf.

  32. Ramet, S.P. 2006. The three Yugoslavias: State-building and legitimation, 1918–2005. Washington: Woodrow Wilson Center Press.

    Google Scholar 

  33. Republic of Kosovo. 2020. Lista e njohjeve. http://www.mfa-ks.net/al/politika/484/lista-e-njohjeve/484.

  34. Republic of Serbia. 2020. Sierra Leone Withdraws Kosovo’s recognition. https://www.srbija.gov.rs/vest/en/150855/sierra-leone-withdraws-kosovos-recognition.php.

  35. Research Institute of Development and European Affairs (RIDEA) and Balkans Policy Research Group (BPRG). 2018. Scenarios for the Grand Finale between Kosovo and Serbia: A policy report. https://balkansgroup.org/en/scenarios-for-the-grand-finale-between-kosovo-and-serbia-a-policy-report/.

  36. Rodrik, D. 2004. Getting institutions right. Harvard University. https://drodrik.scholar.harvard.edu/files/dani-rodrik/files/getting-institutions-right.pdf.

  37. Rodrik, D. 2008. Second-best institutions. American Economic Review: Papers & Proceedings 98 (2): 100–104.

    Article  Google Scholar 

  38. Tridico, P. 2007. Institutions, human development and economic growth in transition economies. European Journal of Development Research 19 (4): 569–593.

    Article  Google Scholar 

  39. United Nations (UN). 2009. Kosovo: The untold story of a diplomatic breakthrough. http://www.un.org/en/events/tenstories/08/kosovo.shtml.

  40. United Nations Department of Economic and Social Affairs (UNDESA). 2008. World Economic and Social Survey 2008: Overcoming economic insecurity. New York: United Nations. http://www.un.org/en/development/desa/policy/wess/wess_archive/2008wess.pdf.

  41. United Nations Development Program (UNDP). 2019a. Public Pulse XVI. Prishtinë/Priština: UNDP Kosovo. https://www.ks.undp.org/content/kosovo/en/home/library/democratic_governance/public-pulse-xvi.html.

  42. United Nations Development Program (UNDP). 2019b. Social Cohesion in Kosovo: Context review and entry-points. Pristina: UNDP. https://www.ks.undp.org/content/kosovo/en/home/library/democratic_governance/social-cohesion-in-kosovo--context-review-and-entry-points.html.

  43. United Nations Human Development Report (UNHDR). 2016. Making the labour market work for women and youth. Pristina: UNDP. http://unkt.org/2016/09/09/kosovo-human-development-report-2016/.

  44. United Nations Kosovo Team (UNKT). 2019. UN common development plan 2016–2020: Final evaluation. Pristina: UNKT. http://unkt.org/2020/02/12/independent-evaluation-report-un-common-development-plan-uncdp-2016-2020/.

  45. Williams, C., and B. Krasniqi. 2018. Explaining informal sector entrepreneurship in Kosovo: An institutionalist perspective. Journal of Developmental Entrepreneurship 23 (2): 1–20.

    Article  Google Scholar 

  46. World Bank. 2019. Kosovo. http://www.worldbank.org/en/country/kosovo.

Download references

Funding

The funding was provided by Rotary International, Trinity Hall, University of Cambridge and Mackenzie King Memorial Scholarship.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Natalie Kauf.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Kauf, N. Exploring the Effects of Weak Institutions on Economic Insecurity in Kosovo. Eur J Dev Res (2021). https://doi.org/10.1057/s41287-020-00344-2

Download citation

Keywords

  • Institutional economics
  • Economic insecurity
  • Development economics
  • Institutions