Tax system performance in the Republic of Serbia

Determination of Serbia to join and integrate into European Union (EU) calls for further reforms in economic laws and standards, among which, taxation policy takes one of the top places. After many years of preparations and delays, the Republic of Serbia adopted a set of laws in the field of taxation policy. However, achieved results are not sufficient to provide full-fledged tax system consistent in its taxation structure and attractive to FDI.Tax reforms, taxation structure, tax principles, conformity with EU tax system., Public Economics, H2,

Do Foreign Direct Investments Increase the Economic Growth of Southeastern European Transition Economies?

There are two important effects of foreign direct investments (FDI) on a host economy: the effect on economic growth and the effect on export performances. Both economic features are important for the transition economies' prospects of European Union (EU) accession. After a short review of relevant research, this paper examines the statistical relationship between FDI inflow and economic growth. Results do not reveal any positive correlation between these two variables. Lack of correlation between FDI inflows and economic development is rather the consequence of methodological imperfections, than the real absence of positive influences of FDI. The problem arises from the fact that the observed countries are in the transition process. Due to structural reforms, there is production and employment decrease in inefficient domestic firms. This can neutralize or even outweigh the positive effect of FDI on economic growth of host sectors.Foreign Direct Investments; Economic Growth; Transition Economies; Southeast Europe

KNOWLEDGE ECONOMY AND INNOVATIONS AS FACTORS OF AGRARIAN COMPETITIVENESS

Today, more than ever, development of agriculture leans on science research results and their practical application. Research in the field of agriculture is conducted by large network of public institutions, institutes and universities are mostly directed toward improvement of production. Economical research, at the level of husbandry, market analysis, or analysis and estimations of economic policy is poorly developed. Profitability of agriculture and food industry should be improved and supported by adequate research and application of gained results. Experience acquired in research and education systems of post-communist countries can help these countries change their economy towards knowledge, innovations and new technologies. But, in spite of great number of research workers and successful education system inherited from the communist period, it would be difficult for countries that were part of East Block to turn these potential advantages into commercially successful innovations unless universities and research institutions cooperate closely with private sector, what implies restructuring research system towards adjustment to agro-economy needs.Agro-economy, Cooperation, Performances, Competitiveness, Agribusiness, Community/Rural/Urban Development, International Development, Labor and Human Capital,

The New Political Macroeconomics in Modern Macroeconomics and Its Appliance to Transition Processes in Serbia

This study deals with important issues related to the new political macroeconomics and its appliance to the economic movements in Serbia, which is a country of “new democracy” as well as with transition economy. In political macroeconomics, it is a known fact that the economic policy instruments can be used for political purposes – simulated improvement of economic indicators to win the elections. These options assume specific features in transition economies, such as the Serbian economy. The political instability in Serbia, reflected in frequent elections, as well as in the diversity in political and economic goals of the key political parties leading to increasing political uncertainty in both the pre-election and post-election periods, weakened the economic system. Simultaneously, using the economic policy for political purposes to support the “pro-democratic” and “pro-European” parties proved to be paradoxically justified.Political macroeconomics, New democracy, Fiscal manipulation, Political instability

Inward FDI in seven transitional countries of South-Eastern Europe: a quest of institution-based attractiveness

The main question we address is whether the weak FDI level in the SEE-7 is linked to ill-adapted institutions or not. In order to answer it, we need to understand the role of institutions in shaping a strong localization advantage for FDI. We develop a theoretical framework to understand the relationship between Transition, Institutions and inward FDI. We assume that the ability to attract FDI depends on the local institutional arrangement. We present our pattern of institutional arrangement that may help us understand why, in spite of identical institutions, countries attract a different level of FDI. We split the SEE into two categories of host countries, each category being characterized by a specific institutional arrangement and level of FDI. We conclude with the relevance of our proposition to develop an analytical framework where FDI is the outcome of a new and well-adapted institutional arrangementFDI, transition, institutions, attractiveness, South-Eastern Europe, institutional arrangement

European Integration of Albania : Economic Aspects

Albania has been partner of the Stability Pact for South Eastern Europe and the EU Stabilisation and Association process for the Western Balkan from the beginning. European integration requires very fundamental and far reaching reforms. Albania has faced the challenge, but in many cases reform measures are not yet properly implemented. Macroeconomic performances have improved recently, and there are some encouraging signs that foreign business might be ready to invest in the country. Yet uncertainties and deficiencies in the political system remain a major risk. -- Albanien ist Partner im Stabilitätspakt für Südosteuropa und im Stabilisierungs- und Assoziierungsprozess der EU. Die europäische Integration verlangt grundlegende Reformen, die Albanien zum Teil eingeleitet hat, die aber häufig in Justiz und Verwaltung noch nicht umgesetzt wurden. Der sich abzeichnende Wirtschaftsaufschwung und ausländische Investitionsbereitschaft könnten durch politische Unsicherheiten in Gefahr geraten.Albanien,EU-Stabilisierungs- und Assoziierungsprozeß für den westlichen Balkan,Systemreformen,Fortschrittsbericht der EU-Kommission,Albania,EU Stabilisation and Association process for the Western Balkan,system reforms,EU assessment report,experts´ recommendations

Importance of Institutional Development for Western Balkan Countries

Western Balkan countries comprises following entities: Bosnia and Hercegovina, Serbia and Montenegro, Kosovo and Metohija, Albania and Macedonia. Even there are just four sovereign(internationaly recognised) states among those entities, number of different names (8) shows to us all fragmentation and tendencies toward further dissolution of this region to increasing number of small and weak states. Tendencies that are shown in WB region are quite different from those in other transition countries in Europe. Instead of cooperation in economic, financial and all other important fields, like Visegrad group countries did in nineties and strenghten their negotiation position compared with the EU, WB countries try to flatter to EU member states and to build their better position through deterioration of the position of other regional states. On the internal plan, all WB countries are still rely on weak institutional capacity - mechanisms that enables governments non-transparent behavior, manipulation with judicial system and judges, selective implementation of the laws, very high and resistant level of corruption in all social and economic fields, surviving of organised crime structures which are very often related to government officials at all levels of authority etc. Integration of WB countries in the EU will be very long term and difficult process as the precondition for that will be building of effective institutional mechanisms that could provide governance comparative with other transition countries and in more distant future with European mature market economies. It isimportant also to establish efficient regional cooperation and to increase level of income and competitiveness to cope with the competition from EU. Experiences from other Balkan countires should be useful for WB region - Greek's as one old member state and Romania's and Bulgaria's as candidate meber states. WB countries expect to have greater understanding of EU officials for the very serious problems that have to be resolved and it is out of question that without important support from outside WB it will be impossible to do so.

Doing business in Serbia: case of strategic partnership between Fiat and Zastava under circumstances of global trends in automotive industry

In this paper we have tried to highlight the main characteristics of doing business in Serbian economy having in mind strategic cooperation between Fiat, the Italian car manufacturer, and Zastava, the only car manufacturer in Serbia. The paper consists of three parts. In the first part the most important transition indicators in Serbia have been analyzed as well as general ambience of doing business. Serbian government have put tremendous efforts in making economic ambience as attractive as possible for prospective foreign investors. Still there are open issues of how successful these efforts have been and what else has to be done. In the second part of this paper, recent global trends in automotive industry have been analyzed and their influence in Serbia and Western Balkans region. Finally, in the third part, the most important aspects of strategic cooperation between Fiat and Zastava have been analyzed, in order to put out the direction into which Serbia government can direct its activities so as to improve general economic ambience for business activities and further attracting of foreign investments