Assessing regional integration and business potential in the Western Balkans

This paper extrapolates the patterns and volume of business development within the Western Balkans region. This is a war-torn area with social, cultural, religious and political specificities. Despite noticeable institutional and growth progress of the individual countries, regional business is still lagging as persistent state rigidities create trade distortions. We argue that intra-regional business clusters, embedded in shared socio-cultural characteristics, can be the alternative to underdevelopment. Political willingness is the prerequisite, as market forces in transitional areas seem to be of secondary importance to regional business development and integration. New analytical approaches are needed to capture the complex reality.