Abstract
Centuries of emigration from the Western Balkans have had an impact on political, demographic, social, and economic developments in the region. Research on mechanisms, determinants, and particularly the economic outcomes of emigration for both individual countries in the region and the Western Balkans as a whole has been scarce, though. This chapter thus aims to (1) provide an overview of the existing studies and official statistics on emigration from eight Western Balkan countries (Albania, Bosnia and Herzegovina, Croatia, Kosovo, the Former Yugoslav Republic of Macedonia, Montenegro, Serbia, and Slovenia), (2) outline the economic impact of emigration on the region, and (3) set an agenda for future research in the field. The analysis of emigrants’ economic engagement in the Western Balkans since transition in the 1990s to date demonstrates that, although the globally dispersed and numerous emigrants from the region seem to remain involved in their countries of origin’s economies through foreign direct investment, remittances, and migrant entrepreneurship, the overall impact of the Western Balkan’s emigrants on both national and regional economies is limited. Structural obstacles to development are identified as key barriers to emigrants’ more notable and impactful economic engagement in their countries of origin and the region as a whole. To substantiate policy that would enhance economic outcomes of emigrants’ involvement in the region, further studies of motivation for- and determinants of emigrants’ economic engagement in the Western Balkans at both the individual and migrant community levels are needed.
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Notes
- 1.
By the mid-nineteenth century, the Ottoman Empire became dysfunctional and, while this allowed Serbia to regain its independence, Bosnia and Herzegovina was incorporated into the Habsburg Empire (Hewitt 2017).
- 2.
Although transit migration by migrants from the Western Balkans has an impact on the region, it is not analysed separately in this chapter, as data on emigrants’ contributions to their countries of origin is limited and not broken down by migrant category. Transit migration through the Western Balkan countries is outside the scope of this chapter, which focuses on emigrants’ impact on their countries of origin and not countries of (temporary or permanent) residence.
- 3.
Excluding the prior Great Migration of the Serbs to Vojvodina in 1690 (Sardon 2001).
- 4.
Transition to a market economy was accompanied by substantial deterioration in conditions, unrest, and a deep economic crisis, characterised by high unemployment and inflation, a deterioration of health and social services, a decline in living standards as well as a negative natural population growth in several countries in the region (Sardon 2001).
- 5.
Especially Albania was involved in incomplete migrations before 2000, when measures against such migration flows by the migrant receiving countries (mainly Greece and Italy) were introduced (Baldwin-Edwards 2006). Since incomplete migrations act as an individual’s tool for poverty reduction, but do not contribute to a national economy significantly (see e.g. Okólski 2012), they are not addressed in great detail in this chapter.
- 6.
- 7.
Many countries of origin cannot (or hesitate to) provide sufficient awareness-raising communication channels or forums of dialogue for establishing a common agenda, and are unable to provide complementary (governmental) social or economic development investments to achieve noticeable impact (Nyberg Sørensen 2007).
- 8.
An individual’s financial and saving behaviour frequently needs to be changed (Ionescu 2006). Due to a need for changing behaviour, which most often takes time and particular effort, remittances may have lagged effects.
- 9.
Businesses that require little education and low start-up costs usually operate in oversaturated sectors with minimal profit margins (Newland and Tanaka 2010).
- 10.
Understanding identity is particularly important in economic analysis, as it may explain behaviour that seems detrimental to economic success: Identity may create externalities for others and provoke reactions that affect individuals’ own payoffs; it may change preferences and affect economic behaviour, thereby influencing the economic well-being (Akerlof and Kranton 2000).
- 11.
Emigrants’ capabilities to contribute to the economic development of their country of origin also depend on their level of integration in the migrant receiving country, as the latter impacts emigrants’ access to knowledge, skills, and financial resources connected to specific employment (Organisation for Economic Co-operation and Development 2012).
- 12.
Democratic, economically productive countries of origin have a positive impact on both migrants’ contributions to their development and on migrants’ return (Brinkerhoff 2009).
- 13.
Knowledge transfer and other intangible potential benefits of emigration are not addressed in detail, as further research is needed in the area.
- 14.
The global economic crisis led to a decrease in export revenues, labour remittances, and inflows of FDI. With financial capital being pulled out of the region (Bartlett 2009), the latter became even more reliant on alternative sources such as remittances.
- 15.
By the time of the crisis, growth in the region was mainly driven by global liquidity and unsustainable capital inflows—and not by progress in economic reform (Murgasova et al. 2015).
- 16.
The United Nations Conference on Trade and Development (2010) reports a 39% global FDI decrease in 2009 and a 29% inward FDI decrease in EU comparatively.
- 17.
While it appears that the countries of the region have, at different degrees, all implemented FDI-specific policies, these have been ineffective, since they have not been preceded by the more ‘basic’ elements of a friendly business environment, such as streamlined business procedures, flexible labour markets, and effective rule of law, which are still largely missing in the region (European Commission 2004).
- 18.
These determinants are not emigrant-specific: They refer to all foreign investors. Further research into the differences in these determinants’ impact on migrant compared to non-migrant investors is needed.
- 19.
Sakuma (2014) argues that the transition process in the Western Balkans has not been completed yet.
- 20.
Some authors argue that the EU integration process increases confidence and reduces (the perceived) risk related to doing business in Western Balkan countries—giving these countries the opportunity to participate more actively in the international markets and production networks (Shimbov et al. 2013; Škabić-Kersan and Orlić 2007).
- 21.
Ivlevs and De Melo (2010) show that FDI is affected by the length of time an emigrant has spent abroad: Emigrants absent from the country of origin for a longer period of time are less likely to possess information on current investment opportunities in their country of origin compared to emigrants who have just emigrated. This gap is especially evident in developing countries, where political regimes and administrative procedures change frequently, and might provide an explanation for fluctuating FDI inflows (probably also by migrants) to several countries from the Western Balkans.
- 22.
For a model of remittance sending decision-making and a classification of remittance sending motives see Docquier and Rapoport (2006).
- 23.
They may contribute to individual countries’ external stability, though: In the Former Yugoslav Republic of Macedonia, remittances are a major source of financing for the large trade deficit, for example (International Monetary Fund 2014).
- 24.
Kosovo and the Former Yugoslav Republic of Macedonia also have a high share of informal economic activity at 45% and 39% respectively, while this share is substantially lower in Serbia and Croatia (at 18–19%) (Christie and Holzner 2004).
- 25.
Because of underreporting of firms that have either closed or exited a market, data on total registered firms may be biased upward and subsequently data on new entry rates may be biased too—especially for developing economies (Trading Economics 2016).
- 26.
In Serbia, for example, the most successful entrepreneurs to emerge from the 1990s were those with close ties to the regime, who were given informal monopolies (Andreas 2004).
- 27.
During (the still uncompleted) transition and privatisation, for instance, government regulation and taxation policies were rather adverse to new SMEs that presented a threat to existing markets and the dominant large enterprises, which were also favoured by local banks for credit approval (Bartlett 2009).
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Koleša, I. (2019). Emigrants from the Western Balkans: The Region’s Money Sacks?. In: Elo, M., Minto-Coy, I. (eds) Diaspora Networks in International Business. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-319-91095-6_28
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