|Title||Is the Economy of Bosnia and Herzegovina Ready to Enter the "Brussels Era"?|
|Publication Type||Book Chapter|
|Year of Publication||2016|
|Book Title||Bosnia and Herzegovina: Law, Society and Politics|
|Edition||International University of Sarajevo|
|Section||Is the Economy of Bosnia and Herzegovina ready to enter the “Brussel’s era”?|
|Publisher||International University of Sarajevo|
|Keywords||B&H, real and nominal convergence|
The specificity of the economic development and growth, particularly for the transition countries is closely related to the process of the European integration. This process is open, in parallel, to the spread of the free markets and supporting institutions which encourage the process of broadening and deepening of the European Union (EU).
The aim of this paper is to explore as to how B&H is currently far from meeting the economic criteria for EU accession and identify the processes in neighboring countries that have promoted or inhibited real convergence prospects at various points in time. The analysis focuses on the progress in implementing reforms to be pursued by all EU candidate countries. The study found that the income differentiation between the Western Balkan countries increased over time and caused higher income dispersion, and thus, a slower rate of sigma convergence. Furthermore, a simple correlation between initial GDP per capita in 1998 and subsequent growth over the period from 1998 to 2015 does provide a strong evidence which supports divergence trends, yet, no convergence within the Western Balkan countries.