Convergence and socio-economic development disparities in the Balkan Peninsula

Abstract

The last three decades in Europe have been marked by increased integration efforts. However, the religiously, culturally, and economically diverse Balkan Peninsula has in addition to that experienced disintegration. It affected the pace of development of economies and the disparities in the socio-economic development in the region. The aim of the study is to investigate the occurrence of regional convergence and to determine the level of disparity in the socio-economic development of the countries of the Balkan Peninsula. The study was conducted by means of taxonomic analysis, using data for the period of 2000–2019 drawn from the World Bank Open Data. The analysis focused on the relative distribution of GDP per capita (constant prices in USD in 2010) at country level. Sigma-convergence was assessed using the coefficient of variation of real GDP per capita. The presence of beta-convergence was verified using econometric modelling techniques, and more specifically, the linear regression analysis. Hellwig’s taxonomic method of development was used for comparative assessment of the dynamics of changes in the level of socio-economic development of individual countries and for their classification. The study shows that there is considerable diversity among the countries of the Balkan Peninsula in terms of their socio-economic development. It seems that the absolute betaconvergence observed in the region is caused by significant recession in Greece.