The economic effects of political disintegration: lessons from Serbia and Montenegro

Vassilis Monastiriotis and Ivan Zilic ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Is there an economic premium from state independence? We shed light on this question by analysing the unique historical case of the peaceful separation of Serbia and Montenegro in 2006 – the last fully recognised internationally state-disintegration on European soil. Using the synthetic control approach, we find that independence for the seceding country (Montenegro) had a sizeable but seemingly transitory positive effect, boosting GDP per capita in the period immediately following independence, but with gains slowly evaporating in the longer period – which we attribute partly to increased vulnerability of the newly independent state to fluctuations in the international economic environment. In contrast, for Serbia we find no evidence of an independence dividend. We postulate that, at least in part, this asymmetry of effects may be linked to divergences in economic sentiment between the seceding entity and the one ‘left behind’.

Keywords: secession; independance; political disintegration; synthetic control; Western Balkans (search for similar items in EconPapers)
JEL-codes: F15 N14 O52 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2020-12-01
New Economics Papers: this item is included in nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in European Journal of Political Economy, 1, December, 2020, 65. ISSN: 0176-2680

Downloads: (external link)
http://eprints.lse.ac.uk/106160/ Open access version. (application/pdf)

Related works:
Journal Article: The economic effects of political disintegration: Lessons from Serbia and Montenegro (2020)
Working Paper: The economic effects of political disintegration: Lessons from Serbia and Montenegro (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:106160

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().