Serbia’s accession to where?

Today’s post is a preview of my chapter in a forthcoming book on Public Administration in Conflict Affected Countries under the editorship of two eminent colleagues, Prof. Purshottama Sivanarain Reddy of the University of Kwazulu Natal in South Africa and Prof. Juraj Nemec of the Masaryk University in Brno, Czech Republic. The book should have been published before the end of this year by Palgrave but the publishing has been delayed until early next year. So, this is my New Year gift to those who follow me (as well as those who don’t but may stumble on this post by chance).

There are four fault lines running through the Serbian society: interpretations and beliefs about the Yugoslav civil war of 1991-1996 and its legacy; the Kosovo quagmire and possible solution alternatives; the challenge of democratization and emergence of a “party state”; its longer-term strategic political orientation and alliances. It has also been mentioned that the public sector reform agenda has been only partially owned nationally and to a large extent driven by the EU accession requirements.    

Public bureaucracy is not separate from politics and its shape and content reflect the same strategies, interests, and resources that drive the political process in general. In this respect, the above conflicts influence, to a varying degree, not so much the shape of the government or its overall strategy (this of course has to be in line with the requirements of the European Administrative Space and EU legal acqui) but its actual content and functioning.  

The discrepancy between the shape/strategy and performance is indeed the key challenge of Serbia’s public sector. Viewed dynamically, Serbia has regressed on all key governance indicators since 2014. The regress is particularly noticeable in two indicators (a drop of about 10 percentage points): Voice and Accountability and Control of Corruption. Serbia has slipped from 41 points out of 100 in 2014 on the Transparency International’s Corruption Perceptions Index to 39 in 2018. Unsurprisingly in the context of the previous discussion, the only governance indicator that is steadily improving is Regulatory Quality (from 55.77 in 2014 to 56.25 in 2018).

The four conflicts are producing a dynamic that effectively stymies (and even reverses) genuine improvements in public sector performance despite an overall improvement in laws, regulations and bureaucratic structures. At the heart of this dynamic, which may be described as a precarious balance act to satisfy external and internal actors pursuing different (and at times contradictory) interests and objectives, is lack of a genuine commitment to a merit-based and rule-based democratic government.  

In this respect, the EU accession process has been as much a driver as a break on public sector development. The genuine home-grown enthusiasm for public sector reforms that characterized the early 2000s was short-lived and replaced with formal EU accession requirements. Had the process of earnest democratization continued, this would not have been so much of an issue (although as Dunn and his colleagues (2006) argue, partial and incomplete reform implementation has beset all countries in transition). However, the trend towards political capitalism coupled with a lack of national ownership has resulted in a growing divide between the official (EU compliant) rhetoric and an ambivalent attitude towards the European project in practice. This is reflected in the statements of some Cabinet members, including the prime minister herself who lamented “the double standards” that the EU applies to Serbia as well as some opposition figures who decried EU’s “colonial tendencies”, suggesting that Serbia should withdraw from the EU negotiations altogether.  

This suspicion towards the EU political objectives vis-a-vas Serbia (and more generally, the values it promotes) is further fed by its requirement to “conclude a fully comprehensive and legally binding agreement between Serbia and Kosovo, in line with international law and EU acquis and acceptable to EU Member States and the region,” which would set the ground for an eventual recognition of Kosovo’s independence. There are certain red lines (not least Kosovo’s status as part of Serbia fixed in the Constitution) that no government would be able to cross without a dramatic political change, less so the current government with its high tolerance of a nationalist rhetoric. Serbia’s minister of defence argued recently that “the EU is failing to prevent the realisation of a ‘Greater Albania’ through its push for normalised Belgrade-Pristina diplomacy,” calling for a reassessment of the Serbia-EU relationship.  

With trust in the EU values thus undermined (and therefore the need for compliance with systems based on such values), the issue of political orientation comes to the front with more frequent references to alternative values. These are not necessarily the traditional values discussed by a number of Serbian authors but the values of political capitalism exemplified first and foremost by China and Russia. Serbia is proud of being the biggest recipient in the Balkans of Chinese investments of €1.3 billion in 2010-2019. At the end of 2019, Serbia signed a free-trade agreement with the Russian-led Eurasian Economic Union (EES) to facilitate its growing trade with the bloc, which amounted to $3.4 billion in 2018.  

The latter development happened despite veiled warnings from the EU in a clear demonstration of the ruling elite’s conflicting attitude to the EU and its values. The EU leverage over the government is also limited as “EU officials are wary of exerting too much pressure on Vučić lest he look East instead.” Although some suspect this to be a clever game of leveraging Serbia’s relationship with Russia to obtain concessions from Brussels, this behavioural pattern fits well with the overall strategy of the government to keep a careful balance between opposing forces and assure as much discretionary space as possible to perpetuate a system of political capitalism embodied in a party state. But there is more to it: this situation also satisfies the EU for as long as Serbia remains on the periphery of the Union, “Brussels is able to dissociate itself from Vucic’s antics” while benefitting from his regime as a reliable enabler of its geostrategic goals in the Balkans. The regime offers stability in a volatile region coupled with the “right” economic policies (such as the successfully implemented IMF austerity measures in 2015-2018) and a relatively moderate political rhetoric on relations with the neighbouring countries including Kosovo. Between principles and real politik, the latter prevails on both sides.

Without a substantive political transformation of the regime opening it up to genuine political competition and more inclusive and consensual policymaking, the public sector is likely to continue to stumble through against a background of seemingly robust laws and regulations.

Serbia’s overall progress towards a more effective and capable public sector over the past 20 years is undeniable, even when the most recent regressive trends are taken into account. A sound macroeconomic policy has resulted in a two-fold increase in total GDP and GDP per capita between 2000 and 2018 (in constant US$), modest levels of unemployment at about 13%, stable income inequality levels at 38-39 Gini coefficient points (albeit higher than the EU28 level), and a poverty rate of about 5 per cent. However, a public sector susceptible to political influence and corruption, increases the risk of reversing these achievements and slipping into what is known as a “middle-income country trap”. A genuine home-grown momentum for building an effective depoliticized and meritocratic public sector oriented towards results rather than processes (as is the case now) will be critical for avoiding this negative scenario and taking Serbia to the next level of development.