A comparative analysis of development in Southeast European countries
Abstract
There are different kinds of indicators which measure levels of development. The use of varying methods could alter the ranking of a particular country. In this paper, Southeast European countries are ranked according to the World Bank, the UNDP and the I-distance method. The aim of the paper is to provide a comparison between the ranking results obtained with those methods for the period 2007–2012. The principal objective of the study is the ranking of SEE countries using the I-distance technique – a multivariate statistical method for ranking entities – and to discover whether this method gives a better ranking of countries than income per capita and the HDI. To answer this question, similar variables of economic development are used within the research methods. Due to the observed period, some government finance variables are also included. Despite certain limitations, such as lack of data for SEE countries, the results show that the ranks of countries are highly similar regardless of the method used. Nevertheless, there are some differences in the countries’ rankings in some years: there are small differences from year to year both in terms of HDI and GNI per capita. However, the I-distance method shows greater differences between countries.
First published online 26 January 2017
Keyword : economic development, Southeast European countries, ranking, comparative analysis, I-distance method
How to Cite
Jednak, S., Kragulj, D., & Bulajic, M. (2018). A comparative analysis of development in Southeast European countries. Technological and Economic Development of Economy, 24(1), 253-270. https://doi.org/10.3846/20294913.2016.1212438
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Iamsiraroj, S.; Ulubasoglu, M. A. 2015. Foreign direct investment and economic growth: a real relationship or wishful thinking?, Economic Modelling 51: 200–213. https://doi.org/10.1016/j.econmod.2015.08.009
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Ivanovic, B. 1977. Classification theory. Institute for Industrial Economics, Belgrade.
Iwasaki, I.; Tokunaga, M. 2014. Macroeconomic impacts of FDI in transition economies: a meta-analysis, World Development 61: 53–56. https://doi.org/10.1016/j.worlddev.2014.03.022
Josifidis, K.; Dragutinovic Mitrovic, R.; Ivancev, O. 2012. Heterogeneity of growth in the West Balkans and Emerging Europe: a dynamic panel data model approach, Panoeconomicus 2: 157–183. https://doi.org/10.2298/PAN1202157J
Khayyat, N. T.; Lee, J. D. 2016. A measure of technological capabilities for developing countries, Technological Forecasting and Social Change 92: 210–223. https://doi.org/10.1016/j.techfore.2014.09.003
Kostoska, O.; Mitrevski, P. 2008. Estimating the FDI impact on economic growth and export performances of the European economies in transition, Revista Tinerior Economisti (The Young Economists Journal) 1(11): 115–126.
Kovacevic, R. 2004. Foreign direct investment as a factor of growth – the experience of European Union countries, Medjunarodni problemi 56(4): 409–446 (in Serbian).
Kragulj, D. 2005. European integration and transition processes. Kragulj, Belgrade, Serbia (in Serbian).
Kragulj, D. 2012. Economics – Basis of microeconomic and macroeconomic analysis. Belgrade, Serbia (in Serbian).
Kubiszewski, I.; Costanza, R.; Franco, C.; Lawn, P.; Talberth, J.; Jackson, T.; Aylmer, C. 2013. Beyond GDP: measuring and achieving global genuine progress, Ecological Economics 93: 57–68. https://doi.org/10.1016/j.ecolecon.2013.04.019
Kumhof, M.; Laxton, D. 2013. Simple fiscal policy rules for small open economies, Journal of International Economics 91: 113–127. h https://doi.org/10.1016/j.jinteco.2013.05.002
Lamande, V.; Samson, I.; Vinokurov, E. 2004. Measuring regional economic development in Russia: the case of the Kalinigrad oblast, European Urban and Regional Studies 11: 71–80 [online], [cited 6 January 2014]. Available from Internet: http://eur.sagepub.com/content/11/1/71.full.pdf+html
Luque, M.; Perez-Moreno, S.; Rodriguez, B. 2016. Measuring human development: a multi-criteria approach, Social Indicators Research 125: 713–733. https://doi.org/10.1007/s11205-015-0874-0
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Michaelson, J.; Abdallah, S.; Steuer, N.; Thompson, S.; Marks, N.; Aked, J.; Cordon, C.; Potts, R. 2009.
National Accounts of Well-being: bringing real wealth onto the balance sheet [online]. NEF (the New Economics Foundation), London [cited 6 January 2014]. Available from Internet: http://www.nationalaccountsofwellbeing.org/learn/download-report.html
Mihailovic, N.; Bulajic, M.; Savic, G. 2009. Ranking of banks in Serbia, Yugoslav Journal of Operations Research 19: 323–334.
Norberg, J. 2010. GDP and its enemies: the questionable search for a happiness index, European View 9(2): 281–282. https://doi.org/10.1007/s12290-010-0143-1
Nuti, M. D. 2009. The impact of the global crisis on transition economies, Economic Annals 54(181): 7–20. https://doi.org/10.2298/EKA0981007N
Pérez-Ortiz, M.; de la Paz-Marín, M.; Gutiérrez, P. A.; Hervás-Martínez, C. 2014. Classification of EU countries’ progress towards sustainable development based on ordinal regression techniques, Knowledge-Based Systems 66: 178–189. https://doi.org/10.1016/j.knosys.2014.04.041
Petrakos, G.; Kallioras, D.; Anagnostou, A. 2011. Regional convergence and growth in Europe: understanding patterns and determinants, European Urban and Regional Studies 18(4): 375–391. https://doi.org/10.1177/0969776411407809
Radojicic, Z.; Isljamovic, S.; Petrovic, N.; Jeremic, V. 2012. A novel approach to evaluating sustainable development, Problemy ekorozwoju 7: 81–85.
Radulescu, A. 2012. The Balkans: between economic crisis and European integration, Financial Studies 16: 129–146.
Sagar, D. A.; Najam, A. 1998. The human development index: a critical review, Ecological Economics 25(3): 249–264. https://doi.org/10.1016/S0921-8009(97)00168-7
Sanfey, P.; Teksoz, U. 2007. Does transition make you happy?, Economics of Transition 15(4): 707–731. https://doi.org/10.1111/j.1468-0351.2007.00309.x
Stiglitz, J.; Sen. A.; Fitoussi, J. P. 2009a. The Measurement of economic performance and social progress revisited – reflections and overview. Working paper of Commission on the Measurement of Economic Performance and Social Progress (CMEPSP) [online], [cited 5 January 2014]. Available from Internet: http://www.stiglitz-sen-fitoussi.fr/documents/overview-eng.pdf
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Todaro, P. M.; Smith, S. C. 2009. Economic development. 10th ed. Addison-Wesley, Person Education.
The World Bank. 2012. World development indicators [cited 3 January 2014]. Available from Internet: https://issuu.com/world.bank.publications/docs/9781464801631
Tvrdon, M.; Skokan, K. 2011. Regional disparities and the ways of their measurement: the case of the visegrad four countries, Technological and Economic Development of Economy 17(3): 501–518. https://doi.org/10.3846/20294913.2011.603485
UNDP. 2012. Human development data [online], [cited 3 January 2014]. Available from Internet: http://hdr.undp.org/en/data
van den Bergh Jeroen, C. J. M. 2009. The GDP paradox, Journal of Economic Psychology 30: 117–135. https://doi.org/10.1016/j.joep.2008.12.001
Wu, P. C.; Fan, C. W.; Pan, S. C. 2014. Does Human Development Index provide rational development rankings? Evidence from efficiency rankings in super efficiency model, Social Indicators Research 116(2): 647–658. https://doi.org/10.1007/s11205-013-0285-z
Xu, G.; Wang, R. 2007. The effect of Foreign Direct Investment on domestic capital formation, trade, and economic growth in a transition economy: evidence from China, Global Economy Journal 7(2). https://doi.org/10.2202/1524-5861.1198
Aruoba. S. B.; Diebold, F. X.; Nalewaik, J.; Schorfheide, D. S. 2016. Improving GDP measurement: a measurement-error perspective, Journal of Econometrics 191(2): 384–397. https://doi.org/10.1016/j.jeconom.2015.12.009
Babanassis, S. 2003. Long-term economic development trends in South-Eastern Europe (1850–2003), South Eastern Europe Journal of Economics 1: 19–40.
Bartlett, W. 2008. Europe’s troubled region: economic development, institutional reforms and social welfare in the western Balkans. Routledge studies in development economics. Abingdon, UK: Routledge. https://doi.org/10.4324/9780203644898
BenYishay, A.; Grosjean, P. 2014. Initial endowments and economic reform in 27 post-socialist countries, Journal of Comparative Economics 42(4): 892–906. https://doi.org/10.1016/j.jce.2014.04.008
Blancard, S.; Hoarau, J. F. 2013. A new sustainable human development indicator for small island developing states: a reappraisal from data envelopment analysis, Economic Modelling 30: 623–635. https://doi.org/10.1016/j.econmod.2012.10.016
Blanchard, O. 1997. The economics of post-communist transition. Oxford, UK: Oxford Scholarship Online.
Bulajic, M.; Kragulj, D.; Jednak, S. 2010. Macroeconomic flows in CEFTA countries, Computational Intelligence in Business and Economics 3: 533–540. https://doi.org/10.1142/9789814324441_0063
Cachanosky, N. 2009. GPD vs EVA as an economic indicator [online]. MPRA Paper No.15262 [cited 4 January 2014]. Available from Internet: http://mpra.ub.uni-muenchen.de/15262/1/MPRA_paper_15262.pdf
Damijan Joze, P.; Knell, M.; Majcen, B.; Rojec, M. 2003. The role of FDI, R&D accumulation and trade in transferring technology to transition countries: evidence from firm panel data for eight transition countries, Economic System 27(2): 189–204. https://doi.org/10.1016/S0939-3625(03)00039-6
Davidson, E. A. 2000. You can’t eat GNP: economics as if ecology mattered. Perseus, Cambridge, MA: Perseus Pub.
Deb, S. 2015. The human development index and its methodological refinements, Social Change 45 (1): 131–136. https://doi.org/10.1177/0049085714561937
De Melo, M.; Denizer, C.; Gelb, A.; Tenev, S. 1997. Circumstance and choice: the role of initial conditions and policies in transition economies. The World Bank.
Delgado, M.; Porter, E. M.; Stern, S. 2012. Cluster, convergence and economic performance [online]. Working paper 18250. National Bureau of economic research [cited 5 January 2014]. Available from Internet: http://www.nber.org/papers/w18250.pdf
Delic, M.; Kragulj, D. 2005. Objectives of macroeconomics as the basis for clustering of countries in integrated Europe, in The 7th Balkan Conference on Operational Research “BACOR 05”, May 2005, Constanta, Romania.
Dobrota, M.; Jeremic, V.; Markovic, A. 2012. A new perspective on the ICT development index, Information Development 28: 271–280. https://doi.org/10.1177/0266666912446497
Dowrick, S.; Dunlop, Y.; Quiggin, J. 2003. Social indicators and comparisons of living standards, Journal of Development Economics 70: 501–529. https://doi.org/10.1016/S0304-3878(02)00107-4
EBRD. 2006. Transition Report 2006. Finance in Transition. European Bank for Reconstruction and Development.
Eckehard, R. 2011. Competitiveness rankings of European countries – How much do they tell us?, Intereconomics 46(2): 82–90. https://doi.org/10.1007/s10272-011-0368-
Fagerberg, J.; Srcholec, M. 2008. National innovation systems, capabilities and economic development, Research Policy 37: 1417–1435. https://doi.org/10.1016/j.respol.2008.06.003
Falcetti, E.; Lysenko, T.; Snafey, P. 2006. Reforms and growth in transition: re-ecaming the evidence, Journal of Comparative Economics 34: 421–445. https://doi.org/10.1016/j.jce.2006.06.008
Giroud, A.; Jindra, B.; Marek, P. 2012. Heterogeneous FDI in transition economies – a novel approach to assess the developmental impact of backward linkages, World Development 40(11): 2206–2220. https://doi.org/10.1016/j.worlddev.2012.03.018]
Grimm, M.; Harttge, K.; Klasen, S.; Misselhorn, M. 2008. A human development index by income groups, World Development 36(12): 2527–2546. https://doi.org/10.1016/j.worlddev.2007.12.001
Hicks, A. D. 1997. The inequality-adjusted Human Development Index: a constructive proposal, World Development 24(8): 1283–1298. https://doi.org/10.1016/S0305-750X(97)00034-X
Høyland, B.; Moene, K.; Willumsen, F. 2012. The tyranny of international index rankings, Journal of Development Economics 97(1): 1–14. https://doi.org/10.1016/j.jdeveco.2011.01.007
Iamsiraroj, S.; Ulubasoglu, M. A. 2015. Foreign direct investment and economic growth: a real relationship or wishful thinking?, Economic Modelling 51: 200–213. https://doi.org/10.1016/j.econmod.2015.08.009
Ivanovic, B. 1973. A method of establishing a list of development indicators. United Nations educational, scientific and cultural organization, Paris.
Ivanovic, B. 1977. Classification theory. Institute for Industrial Economics, Belgrade.
Iwasaki, I.; Tokunaga, M. 2014. Macroeconomic impacts of FDI in transition economies: a meta-analysis, World Development 61: 53–56. https://doi.org/10.1016/j.worlddev.2014.03.022
Josifidis, K.; Dragutinovic Mitrovic, R.; Ivancev, O. 2012. Heterogeneity of growth in the West Balkans and Emerging Europe: a dynamic panel data model approach, Panoeconomicus 2: 157–183. https://doi.org/10.2298/PAN1202157J
Khayyat, N. T.; Lee, J. D. 2016. A measure of technological capabilities for developing countries, Technological Forecasting and Social Change 92: 210–223. https://doi.org/10.1016/j.techfore.2014.09.003
Kostoska, O.; Mitrevski, P. 2008. Estimating the FDI impact on economic growth and export performances of the European economies in transition, Revista Tinerior Economisti (The Young Economists Journal) 1(11): 115–126.
Kovacevic, R. 2004. Foreign direct investment as a factor of growth – the experience of European Union countries, Medjunarodni problemi 56(4): 409–446 (in Serbian).
Kragulj, D. 2005. European integration and transition processes. Kragulj, Belgrade, Serbia (in Serbian).
Kragulj, D. 2012. Economics – Basis of microeconomic and macroeconomic analysis. Belgrade, Serbia (in Serbian).
Kubiszewski, I.; Costanza, R.; Franco, C.; Lawn, P.; Talberth, J.; Jackson, T.; Aylmer, C. 2013. Beyond GDP: measuring and achieving global genuine progress, Ecological Economics 93: 57–68. https://doi.org/10.1016/j.ecolecon.2013.04.019
Kumhof, M.; Laxton, D. 2013. Simple fiscal policy rules for small open economies, Journal of International Economics 91: 113–127. h https://doi.org/10.1016/j.jinteco.2013.05.002
Lamande, V.; Samson, I.; Vinokurov, E. 2004. Measuring regional economic development in Russia: the case of the Kalinigrad oblast, European Urban and Regional Studies 11: 71–80 [online], [cited 6 January 2014]. Available from Internet: http://eur.sagepub.com/content/11/1/71.full.pdf+html
Luque, M.; Perez-Moreno, S.; Rodriguez, B. 2016. Measuring human development: a multi-criteria approach, Social Indicators Research 125: 713–733. https://doi.org/10.1007/s11205-015-0874-0
Malul, M.; Hadad, Y.; Ben-Yair, A. 2009. Measuring and ranking of economic, environmental and social efficiency of countries, International Journal of Social Economics 36(8): 832–843. https://doi.org/10.1108/03068290910967109
Michaelson, J.; Abdallah, S.; Steuer, N.; Thompson, S.; Marks, N.; Aked, J.; Cordon, C.; Potts, R. 2009.
National Accounts of Well-being: bringing real wealth onto the balance sheet [online]. NEF (the New Economics Foundation), London [cited 6 January 2014]. Available from Internet: http://www.nationalaccountsofwellbeing.org/learn/download-report.html
Mihailovic, N.; Bulajic, M.; Savic, G. 2009. Ranking of banks in Serbia, Yugoslav Journal of Operations Research 19: 323–334.
Norberg, J. 2010. GDP and its enemies: the questionable search for a happiness index, European View 9(2): 281–282. https://doi.org/10.1007/s12290-010-0143-1
Nuti, M. D. 2009. The impact of the global crisis on transition economies, Economic Annals 54(181): 7–20. https://doi.org/10.2298/EKA0981007N
Pérez-Ortiz, M.; de la Paz-Marín, M.; Gutiérrez, P. A.; Hervás-Martínez, C. 2014. Classification of EU countries’ progress towards sustainable development based on ordinal regression techniques, Knowledge-Based Systems 66: 178–189. https://doi.org/10.1016/j.knosys.2014.04.041
Petrakos, G.; Kallioras, D.; Anagnostou, A. 2011. Regional convergence and growth in Europe: understanding patterns and determinants, European Urban and Regional Studies 18(4): 375–391. https://doi.org/10.1177/0969776411407809
Radojicic, Z.; Isljamovic, S.; Petrovic, N.; Jeremic, V. 2012. A novel approach to evaluating sustainable development, Problemy ekorozwoju 7: 81–85.
Radulescu, A. 2012. The Balkans: between economic crisis and European integration, Financial Studies 16: 129–146.
Sagar, D. A.; Najam, A. 1998. The human development index: a critical review, Ecological Economics 25(3): 249–264. https://doi.org/10.1016/S0921-8009(97)00168-7
Sanfey, P.; Teksoz, U. 2007. Does transition make you happy?, Economics of Transition 15(4): 707–731. https://doi.org/10.1111/j.1468-0351.2007.00309.x
Stiglitz, J.; Sen. A.; Fitoussi, J. P. 2009a. The Measurement of economic performance and social progress revisited – reflections and overview. Working paper of Commission on the Measurement of Economic Performance and Social Progress (CMEPSP) [online], [cited 5 January 2014]. Available from Internet: http://www.stiglitz-sen-fitoussi.fr/documents/overview-eng.pdf
Stiglitz, E. J.; Sen, A.; Fitoussi, J. P. 2009b. Report by the Commission on the Measurement of Economic Performance and Social Progress [online], [cited 5 January 2014]. Available from Internet: http://www.novorumo.info/economia/stoglitzetal.pdf
Todaro, P. M.; Smith, S. C. 2009. Economic development. 10th ed. Addison-Wesley, Person Education.
The World Bank. 2012. World development indicators [cited 3 January 2014]. Available from Internet: https://issuu.com/world.bank.publications/docs/9781464801631
Tvrdon, M.; Skokan, K. 2011. Regional disparities and the ways of their measurement: the case of the visegrad four countries, Technological and Economic Development of Economy 17(3): 501–518. https://doi.org/10.3846/20294913.2011.603485
UNDP. 2012. Human development data [online], [cited 3 January 2014]. Available from Internet: http://hdr.undp.org/en/data
van den Bergh Jeroen, C. J. M. 2009. The GDP paradox, Journal of Economic Psychology 30: 117–135. https://doi.org/10.1016/j.joep.2008.12.001
Wu, P. C.; Fan, C. W.; Pan, S. C. 2014. Does Human Development Index provide rational development rankings? Evidence from efficiency rankings in super efficiency model, Social Indicators Research 116(2): 647–658. https://doi.org/10.1007/s11205-013-0285-z
Xu, G.; Wang, R. 2007. The effect of Foreign Direct Investment on domestic capital formation, trade, and economic growth in a transition economy: evidence from China, Global Economy Journal 7(2). https://doi.org/10.2202/1524-5861.1198