New edition of EIZ Working Papers

The latest edition of EIZ Working Papers brings the paper "The Economic Effects of Political Disintegration: Lessons from Serbia and Montenegro" by Vassilis Monastiriotis and Ivan Zilic.

Is there an economic premium from state independence? The paper sheds light on this question by analysing the unique historical case of the peaceful separation of Serbia and Montenegro in 2006—the last fully recognised international state-disintegration on European soil. Using the synthetic control approach, the paper finds that independence for the seceding country (Montenegro) had a sizeable but transitory positive effect, boosting GDP per capita in the period immediately following independence, but with gains slowly evaporating in the longer period—which the paper attributes to increased vulnerability of the newly independent state to fluctuations in the international economic environment.

The publication can be accessed at the Institute's website here.