WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

This study aims to derive some lessons from the EU accession process of the Central and Eastern European EU member states (EU-CEE) for the Western Balkan economies. More precisely, it investigates whether EU accession has improved regional economic integration in EU-CEE, what are the suspected reasons for this, and which lessons can be drawn from this experience for the Western Balkan economies. Three types of regional economic integration are analysed: trade in goods, trade in services, and regional foreign direct investment (FDI). The main finding is that the best way to foster regional economic integration and development in the Western Balkans would be through policies aimed at raising incomes. One way in which this can be achieved is by increasing the EU transfers for the region, for example, through full access to the EU budget, with the necessary conditionality attached.