Contents PROOF

PROOF Contents List of Tables viii List of Figures xii List of Abbreviations xv Acknowledgements xxi Notes on Contributors xxii Foreword: South East Europe Means Business xxix Valentin Inzko South East Europe: A Diversity of Perspectives on a Diverse Region xxxi Part I Political and Legal Perspectives on South East Europe 1 South East Europe 1980–2010: A Short Historical Overview 3 Christian Promitzer 2 Europeanization in South East Europe 25 Danica Fink-Hafner and Damjan Lajh 3 Political Culture in South East Europe: The Examples of Bulgaria and Romania 51 Karin Liebhart 4 Corruption in South East Europe 87 Ruslan Stefanov and Dobromir Hristov 5 Networks and Informal Power Structures in South East Europe 109 Åse Berit Grødeland 6 Legal Certainty and the Rule of Law in South East Europe 150 Alexander Patsch v October 19, 2011 8:5 MAC/STEN Page-v 9780230_278653_01_prexxxviii PROOF vi Contents Part II Perspectives on Economic Developments in South East Europe 7 Regional Disparities and Economic Convergence in South East Europe 169 Reinhold Kosfeld and Alexander Werner 8 Macro-Economic Consequences of the Integration of the SEE Area into the Eurozone 189 Reinhard Neck 9 Innovation Capacity in the SEE Region 207 Ðuro Kutlaˇca and Slavo Radosevic 10 Small Firms as a Development Factor in South East Europe 232 Will Bartlett 11 Direct Taxation of Business in South East European Countries 251 Christian Bellak and Mario Liebensteiner 12 Consumer Behaviour and Food Consumption Patterns in South East Europe 271 Elka Vasileva and Daniela Ivanova 13 The Transport and IT Infrastructure in South East European Countries 294 Markus Leibrecht and Mario Liebensteiner Part III Social and Cultural Perspectives on South East Europe 14 ‘Social Capital’ in Central, Eastern and South East Europe: Methodological, Theoretical and Epistemological Debates 325 Dimitrina Spencer 15 Trends in the Western Balkan Labour Markets 356 Hermine Vidovic 16 Higher Education in Former Yugoslav Countries: Impact of the Bologna Process 376 David Crosier and Elizabeth Heath 17 Cultural Diversity in South East Europe 395 Albert Simkus October 19, 2011 8:5 MAC/STEN Page-vi 9780230_278653_01_prexxxviii PROOF Contents vii 18 Work-Related Attitudes in the SEE Region 428 Ágnes Borgulya 19 Values and Trust in Business Relationships in Former Yugoslav Markets 453 Maja Makovec Brenˇciˇc and Vesna Žabkar Appendix: Country profiles 466 Index 490 October 19, 2011 8:5 MAC/STEN Page-vii 9780230_278653_01_prexxxviii PROOF 1 South East Europe 1980–2010: A Short Historical Overview Christian Promitzer Introduction In South East Europe the three decades between the early 1980s and the present day have been marked by a historical caesura, which can be roughly described as the transition from a system of ‘real Social- ism’ towards a concept that can be subsumed under the terms of ‘democracy’ and ‘free market economy’. The 1990s were character- ized by the onset of war, ‘ethnic cleansing’, mass rape and destruction for a considerable part of the region. In the last decade we can finally observe the accession to the European Union (EU) of three of the region’s countries – Slovenia in 2004, and Romania as well as Bulgaria in 2007. There is also the promise of accession for other can- didates – Croatia, Montenegro and probably Serbia. Simultaneously we can also observe a shared disillusionment among the population about the achievements of the last 20 years. In the so-called ‘Western Balkans’ (Petrovic,´ 2009), state borders and the number of states did not remain the same during this period. From 1991 to 1992, the Socialist Federative Republic of Yugoslavia was dismembered through the recog- nition of Slovenia, Croatia, Bosnia and Herzegovina and Macedonia (officially called the ‘Former Yugoslav Republic of Macedonia’) as independent states. The two remaining republics, those of Serbia and Montenegro, formed the ‘Federal Republic of Yugoslavia’ in 1992, which was renamed as ‘Serbia and Montenegro’ in 2003. In 2006 Montenegro became independent, while the Autonomous Province of Kosovo officially seceded from Serbia by declaring its indepen- dence in 2008. Since 1995, after the end of the war on its territory, Bosnia and Herzegovina has been an international protectorate of the United Nations (UN) and of the EU. Likewise, since the end of 3 October 18, 2011 13:20 MAC/STEN Page-3 9780230_278653_02_cha01 PROOF 4 Political and Legal Perspectives on South East Europe the war between Serbia and NATO in 1999, Kosovo has become the second international protectorate under the auspices of both the UN and the EU. At first sight, this summary of the succession of processes and events does not allow one to see interconnections between the development paths that the region of South East Europe has taken during the last three decades. Therefore it is necessary to structure this short historical survey into several sections, in order to shed some light on important aspects of the course of events. All of the countries under consideration shared a common system called ‘real Socialism’; therefore we will have to deal with the character of this system, which in the 1980s was already in a state of maturity, not to say close to decay in terms of economy. Thereafter we will discuss the process of transition to multi-party sys- tems in the individual countries. Two sections will briefly describe the Wars of Yugoslav Succession of 1991–95 and the Kosovo War of 1999. The final section will deal with the legacies of real Socialism in the first decade of the twenty-first century. Real Socialism in South East Europe Socialism, a once powerful economic and social system that controlled one-third of the world, has, within two decades, been transfigured under a mist of oblivion. Out of the arena of the bipolar world, the Western model of free market economy and democracy emerged victorious in a grudge match, which had allegedly wound up in the ‘end of his- tory’. Forgetfulness about the once powerful reality of real socialism may also be connected with the caesura of 9/11. It seems that the once strong memory of the apprehension caused by mutually assured destruction has faded away under the impression of the events of 2001; the latter brought along a new fear of terrorist assaults on institu- tions of the triumphant Western model, a fear that is still determining the relationship of the so-called Western world with Muslims, a small fraction of whom also lives as an autochthonous population in the Balkans. Real socialism claimed to have achieved ultimate social equity and to be on the way to a classless society. In practice, the people’s democracies were under the ideological hegemony of single-ruling communist parties that availed themselves of a powerful state security apparatus in each case; thus we have to speak of different nuances of police states that sensibly narrowed the freedom of action of their citizens. The Yugoslav model was the least intolerable in South East Europe, while October 18, 2011 13:20 MAC/STEN Page-4 9780230_278653_02_cha01 PROOF Christian Promitzer 5 the Albanian and Romanian people’s democracies had the harshest regimes. The people’s democracies had many features in common – single- party rule; the prominence role of the state security; the transfer of private ownership of the means of production in industry, trade and banking sector to ‘social property’. But their concrete manifestations could differ from each other in fundamental respects. For example, while in Albania, Bulgaria and Romania agriculture was solely organized on the base of state and cooperative property, in Yugoslavia private indi- viduals could own plots up to an area of ten, and in certain cases even fifteen hectares. The reasons for these differences can primarily be sought in the way communist parties came to power in the countries of South East Europe. In Romania, the establishment of the People’s Republic of Romania in 1948 was a consequence of the Soviet occupation of the country in August 1944. Real socialism, therefore, was introduced with the bayonets of the Red Army. The case of Bulgaria was similar. Soviet occupation of the country took place in the first half of September 1944. Here it is also important to mention the overthrow of the govern- ment on 9 September 1944 by the communist-led Fatherland’s Front in Sofia, several days before the Soviet troops reached the Bulgarian capital. In retrospect, the Bulgarian Communists would call this event the ‘socialist revolution’ in Bulgaria. Consequently, Romania up to the mid- 1960s and Bulgaria even up to Mikhail Gorbachev’s advent to power as General Secretary of the Communist Party of the Soviet Union (CPSU) in 1985 were the closest allies of the Soviet Union in South East Europe, and Bulgaria in particular followed literally all the provisions issued by Moscow. The course of events was quite different in Yugoslavia and Albania. In these two countries, which had been occupied by ‘Axis Powers’ since 1941, communist-led partisan movements gained strength over bourgeois or monarchist resistance groups at an early stage. There were no communist cadres flown in from Moscow, such as Giorgi Dimitrov (1882–1949), the former leader of the Moscow-based Com- munist International, in the case of Bulgaria – just to name the most striking example. Also, the communist takeovers, both in Yugoslavia and Albania, were different from those in Bulgaria and Romania; they happened by way of popular uprisings, though led by totally Stalinist parties. Consequently the new rulers in Yugoslavia and Albania felt more self-confident towards Moscow than their comrades in Bulgaria and Romania, and they abolished the façade of the multi-party system October 18, 2011 13:20 MAC/STEN Page-5 9780230_278653_02_cha01 PROOF 6 Political and Legal Perspectives on South East Europe earlier than was the case there.

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