The Role of EU Integration in
Accelerating Structural Reforms in
the Western Balkans: Evidence,
Theory and Policy. LEQS Paper No. 140/2019
January 2019
Integration with the European Union has been an important driver of economic, political and
social transformation in the Western Balkans. In recent years, however, the pace of structural
reforms in the region has decelerated and the trend of economic catch-up seen in the 2000s
has not resumed after the slowdown of the global economic crisis. This has coincided – at
least temporally, if not causally – with a ‘temporary freeze’ in the EU’s enlargement towards the
region. Against this backdrop, this paper seeks to investigate the role of EU conditionality on
economic reforms and convergence in the Western Balkans. To do so, it provides original, albeit
descriptive, empirical evidence showing a strong link between EU-related structural reforms
(towards the Copenhagen Criteria) and economic growth; and subsequently presents an
analytical model demonstrating the mechanisms of policy decisions for reforms under EU
conditionality. The model assumes away sectoral interests, policy uncertainty and coordination
problems, allowing the analysis to focus specifically on the tension between two objectives:
the pursuit of EU accession, through the implementation of jointly agreed reforms, and the
accommodation of domestic policy concerns (maintaining policy stability and public support).
Our results unveil a policy dilemma for the EU, having to choose between maximising the
reform effort and minimising non-compliance. Drawing on this model, we discuss extensively
the policy options that the EU faces in trying to enhance the reform performance, growth
trajectories and, ultimately, European perspective of the countries in the region
