Macroeconomic Stabilization and Performance II: The Period after the Kosovo War

The first decade of transition (i.e., the last decade of the twentieth century) had been exceptionally difficult for the people and the countries of SEE. Hostilities, particularly as a result of ethnic conflicts, the considerable lack of political consensus, poor democratic traditions and absence of strong institutions have all largely constrained the degree of economic and political progress in most South East European countries. Thus, as pointed out in the previous chapter, the region experienced a disappointing economic performance, which also reflected ineffective implementation of stabilization and reform programmes, causing, as a result, rising unemployment and declining living standards.