The Social Effects of the Economic Crisis in the Western Balkans: A Case Study of Unreconstructed Welfare Regimes

Abstract

The recent economic crisis has led to a deterioration of the social situation in the Western Balkans. Already before the crisis, a combination of war and conflict, legacies of economic underdevelopment, labour market problems, inadequate social expenditure, and faltering economic growth had produced lingering poverty, unemployment, and income inequality. These trends can be explained in the context of fragmented and uneven welfare regimes that do not approximate any of the available types of welfare capitalism. From 2009 to 2012, the economies of the region suffered from a ‘double dip’ recession, which exacerbated earlier adverse social effects. Poverty, which had been partly alleviated before 2008, became extensive again, while unemployment has been on the rise over the last five years. Extreme poverty, new poverty, and youth unemployment are examples of the crisis’ effects. In spite of this situation, the policy responses of West Balkan governments to the social effects of the crisis have been haphazard, while international assistance never considered the fight against poverty to be a major priority. Such a fight, however, calls for a combination of new, socially sensitive priorities on the part of international donors, including international financial institutions and the eu, and a more systematic ‘welfare effort’ by national governments in the region. A human security-based strategy will also be needed in order to avoid further deterioration in the living conditions of the poverty-stricken categories of the Western Balkan populations. National governments will therefore need to reconstruct the welfare regimes of the West Balkan states, which have been left incomplete since the transitions of 1989.