The Economic Effects of Market Integration in the Western Balkans
2023
Gómez, María DelMar | Zárate, Román D. | Taglioni, Daria
In the Western Balkans, trade and transport policy reforms that reduce waiting time at the border by just three hours are equivalent to removing a value-based tariff of 2 percent. Reform gains are maximized when they are coordinated across economies and implemented jointly: cross-border coordination in the implementation of the package of national single window and other trade facilitation reforms would generate 8 percent higher gains than if each economy were to carry out the reforms autonomously. The impacts of trade reforms and improvements in road infrastructure would be further amplified if Western Balkan economies belonged to the European Union, which would result in an additional 6 percent boost to welfare. Moreover, the accession of Western Balkan economies to the European Union would have positive spillover welfare effects for countries such as Croatia, Bulgaria, Romania, and Hungary, and negligible effects for other EU members.
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