competitiveness outlook 2016

Competitiveness and Private Sector
Development
Competitiveness
in South East Europe
A POLICY OUTLOOK
2016

Competitiveness and Private Sector Development
Competitiveness
in South East Europe
A POLICY OUTLOOK

This work is published under the responsibility of the Secretary-General of the OECD. The
opinions expressed and arguments employed herein do not necessarily reflect the official
views of OECD member countries.
This document and any map included herein are without prejudice to the status of or
sovereignty over any territory, to the delimitation of international frontiers and boundaries
and to the name of any territory, city or area.
Please cite this publication as:
OECD (2016), Competitiveness in South East Europe: A Policy Outlook, Competitiveness and Private
Sector Development, OECD Publishing, Paris.
http://dx.doi.org/10.1787/9789264250529-en
ISBN 978-92-64-25051-2 (print)
ISBN 978-92-64-25052-9 (PDF)
Series: Competitiveness and Private Sector Development
ISSN 2076-5754 (print)
ISSN 2076-5762 (online)
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use
of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli
settlements in the West Bank under the terms of international law.
Photo credits: Cover © microvector – shutterstock.com
Corrigenda to OECD publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm.
© OECD 2016
You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and
multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable
acknowledgement of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights
should be submitted to rights@oecd.org. Requests for permission to photocopy portions of this material for public or commercial use shall
be addressed directly to the Copyright Clearance Center (CCC) at info@copyright.com or the Centre français d’exploitation du droit de copie
(CFC) at contact@cfcopies.com.

PREFACE – 3
COMPETITIVENESS IN SOUTH EAST EUROPE: A POLICY OUTLOOK © OECD 2016
Preface
In the aftermath of the global financial and economic crisis, all countries are
confronted with the need to address structural reform challenges to boost
competitiveness. Recovery has been sluggish in developed and emerging economies
alike. In this challenging setting, the way forward – particularly for small, open
economies – is to implement reforms to improve the conditions for investment and
private sector development, so the economy can grow, more jobs can be created and all
citizens can enjoy greater opportunities and well-being.
South East Europe (SEE) is a region of middle-income economies that lies on the
doorstep of the European Union (EU), the largest trading block in the world. The region
had made great strides in liberalising investment and improving its business climate. As a
result, it experienced annual growth rates in excess of 5% between 2000 and 2008.
Following a double-dip recession in 2009 and 2012, growth has been slowly recovering,
though it is still far short of pre-crisis levels. The impact on jobs has been dramatic:
employment rates dropped by 7 percentage points between 2008 and 2012 and had
clawed back only 2 points by 2014. The region still has much ground to make up, with
per capita GDP still at about one-third of the EU average.
The SEE economies have made competitiveness a priority as they strive to boost
economic growth and the well-being of their citizens. Policy makers from across the
region have drawn up an ambitious agenda for integrated, smart, sustainable and
inclusive growth, underpinned by governance for growth. That agenda is set out in the
South East Europe 2020 Vision, adopted at the Ministerial Conference that took place at
the OECD in 2011. In 2013, the South East Europe 2020 Strategy translated the SEE
2020 Vision into a comprehensive strategy with specific headline targets.
The region’s economies have also committed to enhancing their focus on
competitiveness in the context of their efforts to meet EU accession criteria. In particular,
measures to improve growth and competitiveness are at the centre of the Economic
Reform Programmes (ERPs) that economies of the region committed to preparing on an
annual basis. The ERPs require the economies to make an in-depth, evidence-based
diagnostic of the obstacles to greater competitiveness and growth. It is in this context that
the OECD can offer relevant and effective expertise in support of reforms.
This first edition of Competitiveness in South East Europe: A Policy Outlook supplies
quantitative and qualitative information on 15 key policy dimensions of the SEE 2020
Strategy. It offers indicators that will enable SEE policy makers and citizens to compare
their economy’s performances with each other’s and, where possible, with those of the
European Union. These 15 policy dimensions encompass a wide scope of key areas in
national competitiveness – including public governance, regulation, investment, the
environment and education.

4 – PREFACE
The report acknowledges regional progress in all dimensions and describes the
benefits of a more strategic approach to policy making, including through more effective
whole-of-government co-ordination. In this regard, it stresses the need for more effective
involvement of stakeholders in policy design and implementation, particularly the private
sector.
Competitiveness in South East Europe: A Policy Outlook, which is part of the
OECD’s long standing partnership with South East Europe, benefited from close
co-operation with governments and regional policy networks. While the OECD
contributed the expertise of its Secretariat and various Committees, the governments of
South East Europe provided qualitative self-assessments and statistical data. The report
also builds on good practices from OECD economies that have addressed similar issues
and provides evidence-based perspectives to inform policy making in the region.
I would like to thank all those who have contributed to this publication. It provides a
strong basis for implementing the mandate of the 2015 OECD Ministerial Council
Meeting to further strengthen the Organisation’s South East Europe Regional Programme.
Competitiveness in South East Europe: A Policy Outlook seeks to become a key resource
for regional policy makers, citizens and researchers in the design, the development and
the implementation of better policies for better lives.
Angel Gurría
OECD Secretary-General

FOREWORD – 5
Foreword
This first edition of Competitiveness in South East Europe: A Policy Outlook offers
quantitative and qualitative assessments of key policy dimensions related to
competitiveness in six economies from South East Europe – Albania, Bosnia and
Herzegovina, the Former Yugoslav Republic of Macedonia, Kosovo,*
Montenegro, and
Serbia. It provides assessment frameworks for evaluating current policy and institutional
performance, and for regional benchmarking and comparison with EU and OECD good
practices.
The 15 policy dimensions in this report encompass a wide range of policy areas that
are critical to economic growth. Investment Policy and Promotion attracts foreign and
direct investment to increase job creation and technology transfer. Trade Policy and
Facilitation reduces barriers to trade to facilitate cross-border economic activities and the
flow of ideas. Education and Competences builds the human capital needed to develop
a modern economy. Research, Development and Innovation are key to the shift
towards knowledge-based economies. Digital Society uses information and
communication technology to ease market frictions, reduce transaction costs and improve
productivity. The Cultural and Creative Sectors are valuable in and of themselves,
stimulating innovation through creativity and exerting a positive effect on social and
territorial cohesion. Transport contributes to domestic and international economic
integration, helping countries take their place in global value chains as it takes
increasingly less time to move goods and people. Environmental Policy addresses
sustainability objectives by ensuring that critical input factors remain available over time
through improved resource efficiency and diversified product portfolios. Access to
Finance lays the foundations of growth by enabling businesses to start, grow and
innovate. Tax Policy strikes a balance between raising the revenue required to deliver
public services and relieving the burden on enterprises and individuals. Competition
Policy seeks to prevent unfair competition through government regulations that foster an
internationally competitive business environment. Employment Policy makes labour
markets more inclusive and efficient in addressing post-crisis and demographic
challenges. Health Policy contributes to economic growth through greater labour
productivity, demographic change and higher educational attainment. The quality of
Effective Public Services – be they political, institutional or legal – has a causal link
with a nation’s overall level of socio-economic development. Anti-corruption Policy
improves government efficiency as a whole, limits resource misallocation and builds
trust.
The report greatly benefitted from close co-operation between SEE governments,
regional policy networks and the Organisation. We express our gratitude to the OECD
directorates which contributed their expertise in fields of knowledge covered by the
*
This designation is without prejudice to positions on status, and is in line with United Nations Security
Council Resolution 1244/99 and the Advisory Opinion of the International Court of Justice on Kosovo’s
declaration of independence.

6 – FOREWORD
15 policy dimensions, the SEE government officials who provided qualitative self-
assessments and statistical data, and the regional policy networks which supplied expert
understanding of the SEE economies.

ACKNOWLEDGEMENTS – 7
Acknowledgements
The report is the outcome of the European Commission’s initiative to develop a tool
for monitoring the key policy dimensions related to competitiveness in the six South East
European economies.
The work was conducted by all six economies – Albania, Bosnia and Herzegovina,
the Former Yugoslav Republic of Macedonia, Kosovo, Montenegro, and Serbia. Special
thanks go to the many government representatives who have been actively involved and
whose support and dedication have made the development of this report possible.
The work was co-ordinated by the OECD South East Europe Regional Programme in
collaboration with the Regional Cooperation Council (RCC) (Sanjin Arifagic,
Dragana Djurica, Nand Shani, Maja Pinjo-Talevska and Mladen Dragasevic) and
16 regional expert organisations and networks.
The regional expert organisations and networks include the CEFTA Secretariat
(Renata Vitez and Umut Ergezer), the ERI SEE Interim Secretariat / Centre for Education
Policy (Jasminka Cekic Markovic, Nevena Adzic and Vanja Ivosevic), the Electronic
South East Europe Initiative (Nera Monir-Divan), the Energy Community Secretariat
(Violeta Kogalniceanu), the Global Water Partnership (Dimitris Faloutsos and
Anna Maria Papaioannou), the Network of Associations of Local Authorities
(Natasha Ilijeva Acevska and Ranka Bartula-Musikic), the Regional Anti-Corruption
Initiative (Radu Cotici and Kiro Cvetkov), the RCC Task Force for Culture and Society
(Milena Filipovic), the Regional Environmental Centre (Gordana Kozhuharova), the
Regional School of Public Administration (Goran Pastrovic), the South East Europe
Centre for Entrepreneurial Learning (Efka Heder and Maja Ljubic), the SEE Health
Network, the South East Europe Transport Observatory (Mate Gjorgjievski), the Regional
Rural Development Standing Working Group (Boban Ilic and Katerina Spasovska), the
Western Balkans Research and Innovation Strategy Exercise Facility, the World Health
Organization European Office for Investment for Health and Development (Chris Brown,
Andrea Bertola and Antonella Biasiotto).
The RCC and the 16 regional expert organisations and networks played an integral
part in developing the assessment framework on which this publication is based,
collecting data, liaising with SEE governments and reviewing draft versions of the
publication.
The report was written under the guidance of Marcos Bonturi, Director for Global
Relations, OECD, Anthony O’Sullivan, Deputy Director for Global Relations, OECD,
and Marzena Kisielewska, Head of Division, OECD South East Europe Regional
Programme.
The work was led by Jakob Fexer under the supervision of Alan Paic (both OECD
South East Europe Regional Programme).
The principal authors are all part of the OECD South East Europe Regional
Programme, unless otherwise specified. They are: Hendrik Bosshammer and
Alessandro Kandiah (Chapter 1. Investment policy and promotion); Katarina
Djermanovic-Largenton (Chapter 2. Trade policy and facilitation); Almedina Music

8 – FOREWORD
(Chapter 3. Education and competences and Chapter 12. Employment policy);
Katarina Urosevic (Chapter 4. Research, development and innovation); Sandra Hannig
(Chapter 5. Digital society); Panagiotis Barkas and Almedina Music (Chapter 6. Cultural
and creative sectors); Max Bulakovskiy (Chapter 7. Transport); Hendrik Bosshammer
(Chapter 8. Environmental policy); Edo Omic (Chapter 9. Access to finance and
Chapter 10. Tax policy); Patrik Pruzinsky in co-operation with the OECD Competition
Division’s Cristiana Vitale and Sabine Zigelski (Chapter 11. Competition policy);
Jakob Fexer and Sandra Hannig (Chapter 13. Health policy); Gabriela Pop and
Alice Golenko (Chapter 14. Effective public services); Austin Tyler, Gabriela Pop and
Martin Kohtze (Chapter 15. Anti-corruption policy); and Alan Paic and Martin Kohtze
(the Executive Summary).
The report was prepared for publication by Carolina Gonzalez, Alice Golenko and
Martin Kohtze (all OECD South East Europe Regional Programme) with the support of
Vanessa Vallée, Marianne Aalto, Grace Dunphy (all OECD Global Relations Secretariat),
Jennifer Allain (layout editor), Anne-Lise Prigent, Sarah Salti and Damian Garnys
(OECD Public Affairs and Communications Directorate). It was edited and proofread by
Ken Kincaid, freelance corporate writer and editor, and by Richard Venturi, journalist and
editor.
The report was reviewed and enriched with further input by the OECD Centre for
Entrepreneurship (Miriam Koreen, Virginia Robano, Marco Marchese, Lucia Cusmano
and Kris Boschmans), the OECD Centre for Tax Policy and Administration
(David Bradbury, Bert Brys, Jacques Sasseville, Evelyn Lio, Michael Hewetson,
Korstiaan Kool and Ubaldo Gonzalez), the OECD Directorate for Financial and
Enterprise Affairs (Olga Savran, Andrija Erac, Rusudan Mikhelidze), the OECD
Directorate for Education and Skills (Richard Yelland, Andrew McQueen, Margarita
Kalamova, Caitlyn Guthrie, Daria Jarczewska and Kathrin Hoeckel), the OECD
Directorate for Employment, Labour and Social Affairs (Mark Keese, Andrea Bassanini,
Anton Nivorozhkin and Ian Forde), the OECD Environment Directorate (Ziga Zarnic),
the OECD Public Governance and Territorial Development Directorate (Keit Kasemets,
Wojciech Zielinski and Rachel Holloway), the OECD Trade and Agriculture Directorate
(Evdokia Moïsé, Ronald Steenblik, Ada Ignaciuk and Silvia Sorescu), the International
Transport Forum (Mario Barreto and Jari Kauppila) and the European Training
Foundation (Anthony Gribben and Kristien Van den Eynde).
The methodology of this report was developed by the OECD South East Europe
Regional Programme and benefitted from the experience from similar policy assessments
carried out previously, namely the OECD Investment Reform Index.
The independent assessments were conducted with the support of local consultants:
Juela Haxhiymeri (Albania), Edin Jahic (Bosnia and Herzegovina), MDA (Kosovo),
Igor Nikoloski (the Former Yugoslav Republic of Macedonia), CEED Consulting
(Montenegro) and Mila Marinkovic (Serbia).
The following persons also contributed significantly to the success of the project:
Elena Miteva, Anita Richter, David McBride, Florence Bernard, Marie Carr,
Véronique Quenehen (OECD South East Europe Regional Programme), Antonio Fanelli
and Marie-Estelle Rey (OECD Global Relations Secretariat), Milan Konopek,
Margarita Kalamova, Sarah Perret, Anne-Christelle Ott, Lisa Eifert, Claudia Kempe,
Amra Salihovic (formerly OECD South East Europe Regional Programme),
Alexandre Berlin (Honorary Director, European Commission), Richard Alderslade
(Independent Public Health Consultant), Christian Hartmann (Joanneum Research),

ACKNOWLEDGEMENTS – 9
Ulrike Damyanovic, Anastasia Fetsi, Anthony Gribben, Cristina Mereuta and Kristien
Van den Eynde (European Training Foundation).
This document has been produced with the financial assistance of the European
Union. The views herein can in no way be taken to reflect the official opinion of the
European Union. The production of the document also benefitted from the financial
assistance of the Central European Initiative.

TABLE OF CONTENTS – 11
Table of contents
Abbreviations and acronyms .................................................................................................................23
Executive summary.................................................................................................................................29
Methodology and assessment process ...................................................................................................33
Introduction...........................................................................................................................................33
The South East Europe 2020 Strategy, a policy road map for SEE countries.......................................33
Methodology .........................................................................................................................................34
The value of the Competitiveness Outlook 2016...................................................................................37
Note.......................................................................................................................................................39
Bibliography..........................................................................................................................................39
Chapter 1. Investment policy and promotion in South East Europe..................................................41
Main findings ........................................................................................................................................42
Overview...............................................................................................................................................44
Transparency and Treatment of Investors Sub-Dimension...................................................................49
Investment Promotion and Facilitation Sub-Dimension .......................................................................56
Intellectual Property Rights Sub-Dimension.........................................................................................62
Conclusions...........................................................................................................................................66
Note.......................................................................................................................................................67
Bibliography..........................................................................................................................................67
Chapter 2. Trade policy and facilitation in South East Europe ..........................................................71
Main findings ........................................................................................................................................72
Overview...............................................................................................................................................74
Trade Policy Development Sub-Dimension..........................................................................................79
Trade Liberalisation Sub-Dimension ....................................................................................................82
Trade Facilitation Sub-Dimension ........................................................................................................89
Conclusions...........................................................................................................................................96
Note.......................................................................................................................................................97
Bibliography..........................................................................................................................................97
Chapter 3. Education and competences in South East Europe .........................................................101
Main findings ......................................................................................................................................102
Overview.............................................................................................................................................103
High-Quality Education Sub-Dimension ............................................................................................110
Early-School Leaving Prevention Sub-Dimension .............................................................................117
Qualification Recognition Sub-Dimension .........................................................................................120
Labour Market Alignment Sub-Dimension.........................................................................................122
Entrepreneurial Learning Sub-Dimension...........................................................................................126
Conclusions.........................................................................................................................................129
Notes ...................................................................................................................................................130
Bibliography........................................................................................................................................130

12 – TABLE OF CONTENTS
Chapter 4. Research, development and innovation in South East Europe.......................................135
Main findings ......................................................................................................................................136
Overview.............................................................................................................................................138
RDI Policy Governance Sub-Dimension ............................................................................................143
Research Base Sub-Dimension ...........................................................................................................149
Private Sector RDI Activities Sub-Dimension....................................................................................154
Business-Academia Collaboration Sub-Dimension ............................................................................157
Conclusions.........................................................................................................................................163
Notes ...................................................................................................................................................164
Bibliography........................................................................................................................................164
Chapter 5. Digital society in South East Europe.................................................................................167
Main findings ......................................................................................................................................168
Overview.............................................................................................................................................170
ICT Readiness and Intensity Sub-Dimension......................................................................................174
ICT in Education Sub-Dimension.......................................................................................................184
E-Business and E-Commerce Sub-Dimension....................................................................................186
Conclusions.........................................................................................................................................190
Note.....................................................................................................................................................190
Bibliography........................................................................................................................................191
Chapter 6. Cultural and creative sectors in South East Europe .......................................................193
Main findings ......................................................................................................................................194
Overview.............................................................................................................................................196
Cultural Heritage Sub-Dimension.......................................................................................................203
Audiovisual Sector Sub-Dimension....................................................................................................206
Design and Creative Industries Sub-Dimension .................................................................................210
Conclusions.........................................................................................................................................212
Note.....................................................................................................................................................213
Bibliography........................................................................................................................................213
Chapter 7. Transport in South East Europe.......................................................................................217
Main findings ......................................................................................................................................218
Overview.............................................................................................................................................220
Infrastructure Sub-Dimension.............................................................................................................229
Governance and Regulation Sub-Dimension ......................................................................................240
Sustainability Sub-Dimension.............................................................................................................245
Conclusions.........................................................................................................................................250
Note.....................................................................................................................................................250
Bibliography........................................................................................................................................251
Chapter 8. Environmental policy in South East Europe....................................................................255
Main findings ......................................................................................................................................256
Overview.............................................................................................................................................258
Capacity for Climate Change Adaptation Sub-Dimension .................................................................261
Environmental Protection Sub-Dimension..........................................................................................263
Natural Resource Management Sub-Dimension .................................................................................267
Conclusions.........................................................................................................................................274
Notes ...................................................................................................................................................274
Bibliography........................................................................................................................................275

Chapter 9. Access to finance in South East Europe............................................................................279
Main findings ......................................................................................................................................280
Overview.............................................................................................................................................282
Regulatory and Institutional Framework Sub-Dimension...................................................................288
Access to Bank Finance Sub-Dimension ............................................................................................294
Access to Equity Finance Sub-Dimension ..........................................................................................298
Alternative Sources of Financing Sub-Dimension..............................................................................302
Financial Readiness Sub-Dimension...................................................................................................305
Conclusions.........................................................................................................................................308
Note.....................................................................................................................................................309
Bibliography........................................................................................................................................309
Chapter 10. Tax policy in South East Europe.....................................................................................311
Main findings ......................................................................................................................................312
Overview.............................................................................................................................................314
Corporate Tax Policy Sub-Dimension ................................................................................................319
Tax Administration Sub-Dimension ...................................................................................................322
Tax Policy Analysis Sub-Dimension ..................................................................................................326
Conclusions.........................................................................................................................................329
Notes ...................................................................................................................................................330
Bibliography........................................................................................................................................330
Chapter 11. Competition policy in South East Europe ......................................................................331
Main findings ......................................................................................................................................332
Overview.............................................................................................................................................333
Scope of Action Policy Area...............................................................................................................339
Anti-Competitive Behaviour Policy Area...........................................................................................340
Probity of Investigation Policy Area...................................................................................................342
Advocacy Policy Area.........................................................................................................................344
Conclusions.........................................................................................................................................345
Bibliography........................................................................................................................................346
Chapter 12. Employment policy in South East Europe......................................................................349
Main findings ......................................................................................................................................350
Overview.............................................................................................................................................352
Labour Mobility Sub-Dimension ........................................................................................................356
Labour Market Governance Sub-Dimension.......................................................................................361
Social Economy Sub-Dimension.........................................................................................................370
Conclusions.........................................................................................................................................371
Note.....................................................................................................................................................372
Bibliography........................................................................................................................................372
Chapter 13. Health policy in South East Europe................................................................................375
Main findings ......................................................................................................................................376
Overview.............................................................................................................................................380
Universal Health Coverage Sub-Dimension .......................................................................................385
Governance and Resources Sub-Dimension .......................................................................................389
Health Promotion and Disease Prevention Sub-Dimension................................................................392
Regional Co-operation Sub-Dimension ..............................................................................................395
Conclusions.........................................................................................................................................396

Note.....................................................................................................................................................397
Bibliography........................................................................................................................................397
Chapter 14. Effective public services in South East Europe..............................................................401
Main findings ......................................................................................................................................402
Overview.............................................................................................................................................404
Regulation and Legislation Sub-Dimension........................................................................................408
Civil Service Sub-Dimension..............................................................................................................411
Government Accountability Sub-Dimension ......................................................................................413
Multi-Level Governance Sub-Dimension ...........................................................................................416
Conclusions.........................................................................................................................................419
Note.....................................................................................................................................................420
Bibliography........................................................................................................................................420
Chapter 15. Anti-corruption policy in South East Europe ................................................................423
Main findings ......................................................................................................................................424
Overview.............................................................................................................................................426
Transparent Rules Sub-Dimension......................................................................................................431
Competitive Procedures Sub-Dimension ............................................................................................434
Revision and Control Sub-Dimension.................................................................................................435
Public Awareness Sub-Dimension......................................................................................................436
Implementing Institutions and Regional Co-operation Sub-Dimension .............................................438
Conclusions.........................................................................................................................................441
Notes ...................................................................................................................................................441
Bibliography........................................................................................................................................441
Tables
Table 0.1. SEE 2020 Strategy pillars and headline targets.................................................................34
Table 0.2. SEE 2020 Strategy pillars and corresponding Competitiveness Outlook 2016
policy dimensions..............................................................................................................35
Table 0.3. Example of expropriation qualitative indicator scoring levels..........................................36
Table 0.4. Strengths and limitations of the Competitiveness Outlook 2016.......................................38
Table 1.1. Transparency and Treatment of Investors Sub-Dimension: Foreign investors’
rights indicator scores........................................................................................................51
Table 1.2. Transparency and Treatment of Investors Sub-Dimension: Foreign investors’
access to land ownership indicator scores.........................................................................53
Table 1.3. Transparency and Treatment of Investors Sub-Dimension: Operations
enabling policy framework indicator scores .....................................................................54
Table 1.4. Investment Promotion and Facilitation Sub-Dimension: Indicator scores........................57
Table 1.5. Investment Promotion and Facilitation Sub-Dimension: Framework indicator
scores.................................................................................................................................58
Table 1.6. Investment Promotion and Facilitation Sub-Dimension: Promotion services
indicator scores..................................................................................................................59
Table 1.7. Intellectual Property Rights (IPR) Sub-Dimension: Framework indicator
scores.................................................................................................................................63
Table 1.8. Intellectual Property Rights (IPR) Sub-Dimension: Awareness raising
Table 2.1. Trade Policy Development Sub-Dimension: Indicator scores ..........................................80
Table 2.2. The SEE economies’ regional and bilateral trade agreements ..........................................84

Table 2.3. Trade Facilitation Sub-Dimension: Technical standards and SPS measures
Table 2.4. Trade Facilitation Sub-Dimension: Customs procedures and import licensing
Table 3.1. PISA average scores in 2006, 2009 and 2012.................................................................111
Table 3.2. High-Quality Education Sub-Dimension: ECEC indicator scores..................................113
Table 3.3. High-Quality Education Sub-Dimension: Teacher quality indicator scores ...................115
Table 3.4. High-Quality Education Sub-Dimension: Equity indicator scores .................................116
Table 3.5. Early-School Leaving Prevention Sub-Dimension: Indicator scores..............................118
Table 3.6. Qualification Recognition Sub-Dimension: Framework indicator scores.......................121
Table 3.7. Qualification Recognition Sub-Dimension: Quality assurance agencies
indicator scores................................................................................................................121
Table 3.8. Labour Market Alignment Sub-Dimension: Business in education indicator
scores...............................................................................................................................122
Table 3.9. Labour Market Alignment Sub-Dimension: Career guidance services
Table 3.10. Labour Market Alignment Sub-Dimension: Lifelong learning policy
Table 3.11. Entrepreneurial Learning Sub-Dimension: Policy indicator scores................................127
Table 3.12. Entrepreneurial Learning Sub-Dimension: Training indicator scores.............................129
Table 4.1. RDI Policy Governance Sub-Dimension: Strategic approach to innovation
Table 4.2. RDI Policy Governance Sub-Dimension: Governance of PROs indicator
scores...............................................................................................................................147
Table 4.3. RDI Policy Governance Sub-Dimension: International RDI co-operation
Table 4.4. SEE economy participation in Seventh Framework Programme....................................148
Table 4.5. Research Base Sub-Dimension: Indicator scores............................................................154
Table 4.6. Private Sector RDI Activities Sub-Fimension: Support for RDI activities in
businesses indicator scores..............................................................................................156
Table 4.7. Private Sector RDI Activities Sub-Dimension: Innovation promotion
Table 4.8. Business-Academia Collaboration Sub-Dimension: Financing indicator
scores...............................................................................................................................159
Table 4.9. Business-Academia Collaboration Sub-Dimension: Institutional support
Table 4.10. Business-Academia Collaboration Sub-Dimension: Incentives indicator
scores...............................................................................................................................163
Table 5.1. ICT Readiness and Intensity Sub-Dimension: Strategy indicator scores........................180
Table 5.2. ICT Readiness and Intensity Sub-Dimension: Harmonisation with EU 2009
regulatory framework indicator scores............................................................................182
Table 5.3. Electronic communications legislation adoption dates ...................................................182
Table 5.4. ICT Readiness and Intensity Sub-Dimension: Cybercrime legislation and
private sector co-operation indicator scores....................................................................183
Table 5.5. ICT Readiness and Intensity Sub-Dimension: E-accessibility action plan
Table 5.6. ICT in Education Sub-Dimension: Indicator scores........................................................186
Table 5.7. Electronic commerce law adoption dates........................................................................189
Table 5.8. E-business and E-commerce Sub-Dimension: Indicator scores......................................189
Table 6.1. Statistics indicator scores across all sub-dimensions ......................................................202

Table 6.2. Cultural Heritage Sub-Dimension: Ljubljana Process II implementation
Table 6.3. Cultural Heritage Sub-Dimension: Cultural tourism action plan indicator
scores...............................................................................................................................205
Table 6.4. Audiovisual Sub-Dimension: Audiovisual sector strategy indicator scores ...................208
Table 6.5. Audiovisual sector Sub-Dimension: Film co-production and co-distribution
Table 6.6. Audiovisual sector Sub-Dimension: Film heritage protection indicator scores..............209
Table 6.7. Design and Creative Industries Sub-Dimension: Indicator scores..................................211
Table 7.1. Infrastructure Sub-Dimension: Physical infrastructure strategy indicator
scores...............................................................................................................................231
Table 7.2. Infrastructure Sub-Dimension: Infrastructure project prioritisation indicator
scores...............................................................................................................................235
Table 7.3. Infrastructure Sub-Dimension: Transport telematics strategy indicator scores...............236
Table 7.4. Infrastructure Sub-Dimension: Overcoming non-physical barriers to
infrastructure strategy indicator scores............................................................................239
Table 7.5. Governance and Regulation Sub-Dimension: Indicator scores.......................................241
Table 7.6. Sustainability Sub-Dimension: Indicator scores .............................................................248
Table 8.1. Capacity for Climate Change Adaptation (CCA) Sub-Dimension: Indicator
scores...............................................................................................................................262
Table 8.2. Natural Resource Management Sub-Dimension: Indicator scores..................................268
Table 8.3. Natural Resource Management Sub-Dimension: Water management
Table 8.4. Natural Resource Management Sub-Dimension: Sustainable agriculture
Table 8.5. Natural Resource Management Sub-Dimension: Sustainable forest
management indicator scores ..........................................................................................273
Table 9.1. Regulatory and Institutional Framework Sub-Dimension: Indicator scores ...................290
Table 9.2. Access to Bank Finance Sub-Dimension: Indicator scores.............................................296
Table 9.3. Access to Equity Finance Sub-Dimension: Indicator scores...........................................299
Table 9.4. Alternative Sources of Financing Sub-Dimension: Indicator scores ..............................303
Table 9.5. Financial Readiness Sub-Dimension: Indicator scores ...................................................307
Table 10.1. Corporate Tax Policy Sub-Dimension: Tax incentives indicator scores.........................320
Table 10.2. Corporate Tax Policy Sub-Dimension: Transfer pricing indicator scores ......................321
Table 10.3. Corporate Tax Policy Sub-Dimension: Cross-border taxation legislation
Table 10.4. Tax Administration Sub-Dimension: Administrative organisation indicator
scores...............................................................................................................................324
Table 10.5. Tax Administration Sub-Dimension: Taxpayer compliance indicator scores.................325
Table 10.6. Tax Policy Analysis Sub-Dimension: Tax statistics indicator scores .............................327
Table 10.7. Tax Policy Analysis Sub-Dimension: Indicator scores...................................................328
Table 12.1. Labour Migration Sub-Dimension: Labour migration indicator scores..........................358
Table 12.2. Labour Migration Sub-Dimension: Skills gap analysis indicator scores ........................360
Table 12.3. Labour Market Governance Sub-Dimension: Strategic approach and
tripartite consultations indicator scores...........................................................................361
Table 12.4. Labour Market Governance Sub-Dimension: Disadvantaged groups indicator
scores...............................................................................................................................364
Table 12.5. Labour Market Governance Sub-Dimension: Public employment services

Table 12.6. Labour Market Governance Sub-Dimension: Informal employment indicator
scores...............................................................................................................................366
Table 12.7. Labour Market Governance Sub-Dimension: Employment Protection
Legislation indicator scores.............................................................................................368
Table 12.8. Social Economy Sub-Dimension: Indicator scores.........................................................371
Table 13.1. Universal Health Coverage Sub-Dimension: Indicator scores........................................388
Table 13.2. Governance and Resources Sub-Dimension: Indicator scores........................................392
Table 13.3. Health Promotion and Disease Prevention Sub-Dimension: Indicator scores ................395
Table 13.4. Regional Co-operation Sub-Dimension: Indicator score ................................................396
Table 14.1. Regulation and Legislation Sub-Dimension: Regulatory analysis indicator
scores...............................................................................................................................410
Table 14.2. Regulation and Legislation Sub-Dimension: Dialogue indicator scores.........................410
Table 14.3. Civil Service Sub-Dimension: Indicator scores ..............................................................412
Table 14.4. Government Accountability Sub-Dimension: Indicator scores.......................................414
Table 14.5. Multi-Level Governance Sub-Dimension: Indicator scores............................................417
Table 15.1. Transparent Rules Sub-Dimension: Indicator scores ......................................................433
Table 15.2. Competitive Procedures Sub-Dimension: Indicator scores.............................................434
Table 15.3. Revision and Control Sub-Dimension: Indicator scores .................................................436
Table 15.4. Public Awareness Sub-Dimension: Indicator scores.......................................................437
Table 15.5. Implementing Institutions and Regional Co-operation Sub-Dimension:
Indicator scores ...............................................................................................................439
Figures
Figure 1.1. Investment Policy and Promotion: Dimension and Sub-Dimension average
scores..................................................................................................................................42
Figure 1.2. Investment Policy and Promotion Dimension assessment framework...............................47
Figure 1.3. Annual greenfield investment flows...................................................................................48
Figure 1.4. Registered ISO 9001 certificates........................................................................................49
Figure 1.5. Transparency and Treatment of Investors: Sub-Dimension average scores
and indicator scores............................................................................................................50
Figure 1.6. Cumulated GDP of economies with bilateral investment agreements in force,
2013....................................................................................................................................51
Figure 1.7. Days needed to lease private and public land, 2013...........................................................53
Figure 1.8. Investment Promotion and Facilitation: Sub-Dimension average scores and
indicator scores...................................................................................................................56
Figure 1.9. Intellectual Property Rights (IPR): Sub-Dimension average scores and
indicator scores...................................................................................................................62
Figure 1.10. Number of WIPO-administered treaties signed, 2015 .......................................................64
Figure 1.11. Software piracy rates..........................................................................................................64
Figure 2.1. Trade Policy and Facilitation: Dimension and Sub-Dimension average scores.................72
Figure 2.2. Trade Policy and Facilitation Dimension assessment framework......................................76
Figure 2.3. Total SEE trade in goods and services...............................................................................77
Figure 2.4. SEE regional exports of goods and services ......................................................................78
Figure 2.5. SEE trade deficit.................................................................................................................78
Figure 2.6. Total intra-SEE trade..........................................................................................................79
Figure 2.7. Trade Policy Development: Sub-Dimension average scores and indicator
scores..................................................................................................................................80
Figure 2.8. Trade in legal services restrictiveness, 2013......................................................................85
Figure 2.9. Trade in architectural services restrictiveness, 2013..........................................................86
Figure 2.10. Trade in engineering services restrictiveness, 2013...........................................................86

Figure 2.11. Trade in accounting and auditing services restrictiveness, 2013 .......................................87
Figure 2.12. Trade in construction services restrictiveness, 2013..........................................................87
Figure 2.13. Domestic and foreign market access..................................................................................88
Figure 2.14. Custom duties on capital imports, 2013.............................................................................89
Figure 2.15. Trade Facilitation: Sub-Dimension average scores and indicator scores...........................91
Figure 2.16. Documents required for export and import, 2009 and 2015 ..............................................93
Figure 2.17. Time required for exports and imports, 2009 and 2015.....................................................94
Figure 2.18. Cost to export and import, 2009 and 2015.........................................................................94
Figure 3.1. Education and Competences Dimension assessment framework.....................................106
Figure 3.2. GDP per person employed, PPP.......................................................................................107
Figure 3.3. Highest educational attainment, 2012 ..............................................................................108
Figure 3.4. Share of 30-34 year-olds educated to tertiary level..........................................................109
Figure 3.5. Government expenditure on education.............................................................................110
Figure 3.6. Participation rate in early childhood education and care, 2013........................................112
Figure 3.7. Average teacher monthly salary.......................................................................................114
Figure 3.8. Early leavers from education and training among 18-24 year-olds .................................118
Figure 3.9. Participation in lifelong learning among 25-64 year olds ................................................125
Figure 4.1. Research, Development and Innovation (RDI): Dimension and
Sub-Dimension average scores ........................................................................................136
Figure 4.2. Research, Development and Innovation Dimension assessment framework...................141
Figure 4.3. High-technology exports, 2003 and 2012 ........................................................................142
Figure 4.4. Knowledge-intensive services exports in selected SEE economies, 2005 and
2011..................................................................................................................................143
Figure 4.5. RDI Policy Governance: Sub-Dimension average scores and indicator scores...............144
Figure 4.6. Research Base: Sub-Dimension average scores...............................................................149
Figure 4.7. Citable documents, 2008 and 2012 ..................................................................................150
Figure 4.8. Gross domestic expenditure on R&D (GERD), 2009 and 2012 ......................................151
Figure 4.9. GERD by source of financing, 2012 ................................................................................152
Figure 4.10. Total R&D personnel .......................................................................................................152
Figure 4.11. Private Sector RDI Activities: Sub-Dimension average scores and indicator
scores................................................................................................................................155
Figure 4.12. Business-Academia Collaboration: Sub-Dimension average scores and
indicator scores.................................................................................................................158
Figure 5.1. Digital Society: Dimension and Sub-Dimension average scores.....................................168
Figure 5.2. Digital Society Dimension assessment framework..........................................................173
Figure 5.3. ICT goods imports, 2013..................................................................................................174
Figure 5.4. ICT goods exports, 2013..................................................................................................174
Figure 5.5. ICT Readiness and Intensity: Sub-Dimension average scores and indicator
scores................................................................................................................................176
Figure 5.6. Fixed lines and mobile-cellular telephone subscriptions, 2013........................................177
Figure 5.7. Households with a computer and access to Internet, 2013...............................................178
Figure 5.8. Fixed and mobile broadband penetration rates, 2013.......................................................178
Figure 5.9. Annual investment in fixed (wired) broadband services and in mobile
communications, 2013 .....................................................................................................179
Figure 5.10. Fixed (wired) broadband monthly subscription charge, 2013..........................................179
Figure 5.11. ICT in Education: Sub-Dimension average scores and indicator scores..........................185
Figure 5.12. Proportion of businesses with a web presence, 2009 and 2013 .......................................187
Figure 5.13. Proportion of firms using e-mail to interact with clients/suppliers, 2009 and
2013..................................................................................................................................187

Figure 5.14. Proportion of enterprises selling online and having received orders online,
2013..................................................................................................................................188
Figure 5.15. E-Commerce and E-Business: Sub-Dimension average scores and indicator
scores................................................................................................................................189
Figure 6.1. Cultural and Creative Sectors: Dimension and Sub-Dimension average
scores................................................................................................................................194
Figure 6.2. Cultural and Creative Sectors Dimension assessment framework...................................199
Figure 6.3. Employment in cultural and creative sectors, 2011..........................................................200
Figure 6.4. Cultural Heritage: Sub-Dimension average scores and indicator scores..........................203
Figure 6.5. Travel and tourism, 2014 .................................................................................................205
Figure 6.6. International tourism, receipts, 2013................................................................................206
Figure 6.7. Audiovisual Sector: Sub-Dimension average scores and indicator scores.......................207
Figure 6.8. National film productions and internationally co-produced films ...................................209
Figure 6.9. Design and Creative Industries: Sub-Dimension average scores and indicator
scores................................................................................................................................210
Figure 7.1. Transport Policy: Dimension and Sub-Dimension average scores ..................................218
Figure 7.2. Transport Dimension assessment framework...................................................................223
Figure 7.3. Overall Logistics Performance Index (LPI), 2010 and 2014 ...........................................224
Figure 7.4. Logistics Performance Index (LPI) – Timeliness indicator, 2010 and 2014....................224
Figure 7.5. Distance and tonnage of road-transported goods, 2009 and 2013....................................226
Figure 7.6. Rail passengers, 2010 and 2013 .......................................................................................226
Figure 7.7. Rail freight, 2007, 2010 and 2013....................................................................................227
Figure 7.8. Infrastructure: Sub-Dimension average scores and indicator scores................................229
Figure 7.9. Logistics Performance Index (LPI) – Infrastructure indicator 2010 and 2014.................230
Figure 7.10. Total inland transport infrastructure investment, 2004 and 2011-13 ...............................231
Figure 7.11. Road density (excl. motorways), 2013.............................................................................232
Figure 7.12. Railway density, 2013......................................................................................................233
Figure 7.13. Governance and Regulation: Sub-Dimension average scores and indicator
scores................................................................................................................................240
Figure 7.14. Number of road fatalities, 2010, 2012 and 2014..............................................................243
Figure 7.15. Sustainability: Sub-Dimension average scores and indicator scores ...............................246
Figure 7.16. CO2 emissions from transport, 2011 ................................................................................246
Figure 8.1. Environmental Policy: Dimension and Sub-Dimension average scores ..........................256
Figure 8.2. Environmental Policy Dimension assessment framework ...............................................260
Figure 8.3. Capacity for Climate Change Adaptation (CCA): Sub-Dimension average
scores and indicator scores...............................................................................................261
Figure 8.4. Number of threatened fish, mammals and plant species, 2014........................................264
Figure 8.5. Average proportion of population overly exposed to air pollution..................................265
Figure 8.6. Fertiliser consumption......................................................................................................266
Figure 8.7. Terrestrial and marine protected areas .............................................................................267
Figure 8.8. Natural Resource Management: Sub-Dimension average scores and indicator
scores................................................................................................................................268
Figure 8.9. Forest area, 2013 ..............................................................................................................273
Figure 9.1. Access to Finance: Dimension and Sub-Dimension average scores................................280
Figure 9.2. Access to Finance Dimension assessment framework.....................................................285
Figure 9.3. Entrepreneurs citing access to finance as a constraint, 2009 and 2014............................286
Figure 9.4. Domestic credit to the private sector................................................................................286
Figure 9.5. Interest rates on bank loans..............................................................................................287
Figure 9.6. Interest rate spread, 2007 and 2013..................................................................................287
Figure 9.7. Businesses using banks as financing source, 2009 and 2013...........................................288

Figure 9.8. Regulatory and Institutional Framework: Sub-Dimension average scores and
Figure 9.9. Depth of credit information index, 2014..........................................................................291
Figure 9.10. Value of collateral requirement, 2009 and 2013..............................................................293
Figure 9.11. Average duration of bankruptcy proceedings, 2014 ........................................................293
Figure 9.12. Average cost of bankruptcy proceedings, 2014 ...............................................................294
Figure 9.13. Access to Bank Finance: Sub-Dimension average scores and indicator scores...............295
Figure 9.14. Cumulative market share of top three banks, 2010 and 2014 ..........................................296
Figure 9.15. Access to Equity Finance: Sub-Dimension average scores and indicator
scores................................................................................................................................299
Figure 9.16. Market capitalisation of listed companies........................................................................300
Figure 9.17. Alternative Sources of Financing: Sub-Dimension average scores and
Figure 9.18. Financial Readiness: Sub-Dimension average scores and indicator scores .....................306
Figure 10.1. Tax Policy: Dimension and Sub-Dimension average scores............................................312
Figure 10.2. Tax Policy Dimension assessment framework.................................................................316
Figure 10.3. Firms identifying tax administration as a major constraint, 2009 and 2013 ....................317
Figure 10.4. Number of tax payments firms have to make, 2010 and 2015.........................................318
Figure 10.5. Time to comply with tax laws, 2010 and 2015 ................................................................318
Figure 10.6. Corporate Tax Policy: Sub-Dimension average scores and indicator scores...................320
Figure 10.7. Tax Administration: Sub-Dimension average scores and indicator scores......................323
Figure 10.8. Number of staff employed in tax administration, 2010 and 2014....................................326
Figure 10.9. Tax Policy Analysis: Sub-Dimension average scores and indicator scores.....................327
Figure 11.1. Competition Policy Dimension assessment framework...................................................335
Figure 11.2. Competition Policy: Number of adopted criteria .............................................................336
Figure 11.3. Scope of Action: Number of adopted criteria ..................................................................339
Figure 11.4. Policy on Anti-competitive behaviour: Number of adopted criteria................................341
Figure 11.5. Budget of competition authorities, 2013..........................................................................342
Figure 11.6. Probity of Investigation: Number of adopted criteria.......................................................343
Figure 11.7. Advocacy: Number of adopted criteria ............................................................................345
Figure 12.1. Employment Policy: Dimension and Sub-Dimension average scores .............................350
Figure 12.2. Employment Policy Dimension assessment framework ..................................................354
Figure 12.3. Employment rate of 15 year-olds and over ......................................................................355
Figure 12.4. Unemployment rates of 15 year-olds and over ................................................................355
Figure 12.5. Long-term unemployment rate (12 months +) .................................................................356
Figure 12.6. Labour Mobility: Sub-Dimension average scores and indicator scores...........................357
Figure 12.7. Migrant Integration Policy Index (MIPEX), 2014...........................................................360
Figure 12.8. Labour Market Governance: Sub-Dimension average scores and indicator
scores................................................................................................................................361
Figure 12.9. Youth unemployment rate................................................................................................363
Figure 12.10. NEET rate of 15-24 year-olds, 2013 ................................................................................363
Figure 12.11. Social Economy: Sub-Dimension average scores and indicator scores ...........................370
Figure 13.1. Health Policy: Dimension and Sub-Dimension average scores .......................................376
Figure 13.2. Health Policy Dimension assessment framework ............................................................383
Figure 13.3. Life expectancy at birth, 2011..........................................................................................384
Figure 13.4. Years of life lost by broad category of disease, 2012.......................................................384
Figure 13.5. Live births weighing 2 500g or more, 2011.....................................................................385
Figure 13.6. Universal Health Coverage: Sub-Dimension average scores and indicator
scores................................................................................................................................386

Figure 13.7. Governance and Resources: Sub-Dimension average scores and indicator
scores................................................................................................................................389
Figure 13.8. Government health spending, 2012..................................................................................390
Figure 13.9. Health Promotion and Disease Prevention: Sub-Dimension average scores
and indicator scores..........................................................................................................393
Figure 13.10. Smoking prevalence in adults 15 years and older, 2015 ..................................................394
Figure 13.11. Regional Co-operation: Sub-Dimension indicator scores................................................396
Figure 14.1. Effective Public Services: Dimension and Sub-Dimension average scores.....................402
Figure 14.2. Effective Public Services Dimension assessment framework..........................................406
Figure 14.3. Government effectiveness, 2010 and 2013 ......................................................................407
Figure 14.4. Voice and accountability, 2010 and 2013 ........................................................................408
Figure 14.5. Regulatory quality, 2010 and 2013 ..................................................................................408
Figure 14.6. Regulation and Legislation: Sub-Dimension average scores and indicator
scores................................................................................................................................409
Figure 14.7. Civil Service: Sub-Dimension average scores and indicator scores ................................412
Figure 14.8. Government Accountability: Sub-Dimension average scores and indicator
scores................................................................................................................................414
Figure 14.9. Multi-Level Governance: Sub-Dimension average scores and indicator
scores................................................................................................................................416
Figure 14.10. Tax revenue collected at sub-national level 2010 and 2013.............................................417
Figure 14.11. Expenditure at the sub-national level, 2010 and 2013 .....................................................418
Figure 14.12. Investment at sub-national level, 2010 and 2013.............................................................419
Figure 15.1. Anti-corruption Policy: Dimension and Sub-Dimension average scores.........................424
Figure 15.2. Anti-corruption Policy Dimension assessment framework..............................................428
Figure 15.3. Government effectiveness, 2010 and 2013 ......................................................................429
Figure 15.4. Corruption Perceptions Index (CPI), 2014.......................................................................430
Figure 15.5. Bribery incidence and depth, 2013...................................................................................431
Figure 15.6. Transparent Rules: Sub-Dimension average scores and indicator scores ........................432
Figure 15.7. Competitive Procedures: Sub-Dimension average scores................................................434
Figure 15.8. Revision and Control: Sub-Dimension average scores ....................................................435
Figure 15.9. Public Awareness: Sub-Dimension average scores..........................................................437
Figure 15.10. Implementing Institutions and Regional Co-operation: Sub-Dimension
average scores and indicator scores..................................................................................438
Boxes
Box 1.1. Investment Policy and Promotion Dimension in the SEE 2020 Strategy ..........................45
Box 1.2. CzechInvest, an example of good practice in investment promotion.................................61
Box 1.3. IP Australia, an example of good practice in intellectual property protection...................66
Box 2.1. Trade Policy and Facilitation Dimension in the SEE 2020 Strategy..................................75
Box 3.1. Education and Competences Dimension in the SEE 2020 Strategy.................................104
Box 3.2. OECD’s Programme for the International Assessment of Adult
Competencies (PIAAC)....................................................................................................107
Box 3.3. OECD’s Teaching and Learning International Survey (TALIS) .....................................114
Box 3.4. Identifying low-skilled young people at risk of dropping out, an example
from Estonia.....................................................................................................................120
Box 3.5. European Qualifications Framework (EQF) ....................................................................120
Box 4.1. Research, Development and Innovation Dimension in the SEE 2020 Strategy...............140
Box 4.2. Research and Innovation Council, Finland, an example of good practice .......................145
Box 4.3. Norway’s research excellence initiatives, an example of good practice..........................153

Box 4.4. KU Leuven Research and Development (LRD), Belgium, an example of best
practice.............................................................................................................................161
Box 5.1. Digital Society Dimension in the SEE 2020 Strategy......................................................170
Box 5.2. OECD Recommendation of the Council on Principles for Internet Policy
Making .............................................................................................................................171
Box 5.3. The Digital Agenda for Europe........................................................................................175
Box 5.4. The Netherlands’ strategic approach towards the information society ............................181
Box 6.1. Cultural and Creative Sectors Dimension in the SEE 2020 Strategy...............................198
Box 6.2. UNESCO Project – Culture for Development Indicators.................................................201
Box 6.3. Ljubljana Process II..........................................................................................................204
Box 6.4. The Nova Iskra design incubator......................................................................................211
Box 7.1. Transport Dimension in the SEE 2020 Strategy ..............................................................221
Box 7.2. Some principles behind public governance of public-private partnerships......................237
Box 7.3. The Deutsche Bahn experience........................................................................................242
Box 7.4. Regulatory Enforcement and Inspection, a valuable reference document from
the OECD.........................................................................................................................245
Box 7.5. Promotion of sustainable transport solutions, case of Copenhagen .................................249
Box 8.1. Environmental Policy Dimension in the SEE 2020 Strategy...........................................259
Box 8.2. Good practice example: Local climate change adaptation in Scotland............................263
Box 8.3. Good practice example: Agri-environmental measures in Switzerland...........................272
Box 9.1. Access to Finance Dimension in the SEE 2020 Strategy.................................................283
Box 9.2. Korean Technology Finance Corporation, an example of best practice...........................298
Box 9.3. Financial education in the United Kingdom, an example of best practice.......................308
Box 10.1. Tax Policy Dimension in the SEE 2020 Strategy.............................................................315
Box 10.2. Best practices for tax analysis and expenditure reporting................................................329
Box 11.1. Competition Policy Dimension in the SEE 2020 Strategy...............................................334
Box 11.2. Nordic competition authorities co-operation, an example of good practice.....................338
Box 12.1. Employment Policy Dimension in the SEE 2020 Strategy ..............................................353
Box 12.2. Incentives to employ and register the unemployed in the fight against
informal employment: Good practice from Croatia.........................................................367
Box 12.3. OECD indicators of the strictness of employment protection legislation ........................369
Box 13.1. Health Policy Dimension in the SEE 2020 Strategy ........................................................381
Box 14.1. Effective Public Services Dimension in the SEE 2020 Strategy......................................405
Box 14.2. E-services in Estonia........................................................................................................415
Box 15.1. Anti-corruption Policy Dimension in the SEE 2020 Strategy..........................................427
Look for the StatLinks2at the bottom of the tables or graphs in this book.
To download the matching Excel® spreadsheet, just type the link into your
Internet browser, starting with the http://dx.doi.org
the e-book edition.
Follow OECD Publications on:
This book has... StatLinks2
A service that delivers Excel from the printed page!®
http://twitter.com/OECD_Pubs
http://www.facebook.com/OECDPublications
http://www.linkedin.com/groups/OECD-Publications-4645871
http://www.youtube.com/oecdilibrary
http://www.oecd.org/oecddirect/
OECD
Alerts

ABBREVIATIONS AND ACRONYMS – 23
Abbreviations and acronyms
ALB Albania
BGR Bulgaria
BIH Bosnia and Herzegovina
EST Estonia
HRV Croatia
KOS Kosovo
LTU Lithuania
LVA Latvia
MKD Former Yugoslav Republic of Macedonia
MNE Montenegro
ROU Romania
SRB Serbia
SVK Slovak Republic
SVN Slovenia
AEO Authorised economic operator
AIDA Albanian Investment Development Agency
ANCC Albanian National Centre of Cinematography
ATS Accreditation Body of Serbia
B2B Business-to-business
B2C Business-to-client
BAN Business angel network
BERD Business expenditure on R&D
BLA Bilateral agreement
CABs Conformity assessment bodies
CCA Climate change adaptation
CCIs Cultural and creative industries
CCSs Cultural and creative sectors
CEER Centre for environment-friendly energy
CEFTA Central European Free Trade Agreement
CEN European Committee for Standardization

24 – ABBREVIATIONS AND ACRONYMS
CENELEC European Committee for Electrotechnical Standardization
CIRT Computer incident response teams
CoE Centre of excellence
CRI Centre for research-based innovation
CRM Customer relationship management
CSDH Commission on Social Determinants of Health
CVTS Continuing Vocational Training Survey
DILC Department for International Legal Cooperation
EA European co-operation for Accreditation
EA MLA EA Multilateral Agreement
EBRD European Bank for Reconstruction and Development
ECA Ecological Compensation Area
ECAA Common Aviation Area Agreement
ECAA European Common Aviation Area Agreement
ECEC Early childhood education and care
ECOFIN Economic and Financial Affairs Council
ECS Energy Community Secretariat
EDIF Export Development and Investment Fund
EEIS Estonian Educational Information System
EFTA European Free Trade Association
EIF European Investment Fund
EMIS Educational management information system
ENs European Standards
EPFTC Regulation of standard fixed-term contracts
EPL Employment protection legislation
EPRC Regulation of open-ended contracts
EPT Regulation of temporary contracts
EPTWA Regulation of temporary work agency employment
EQF European Qualifications Framework
ERISEE Education Reform Initiative of South Eastern Europe
ERP Economic Reform Programme
eSEE Electronic South East Europe
ETCS European Train Control System
ETF European Training Foundation
FDI Foreign direct investment
FIPA Foreign Investment Promotion Agency of Bosnia and Herzegovina
FP7 Seventh Framework Programme

FSA Financial Services Authority
FTA Free trade agreement
GATT General Agreement on Tariffs and Trade
GERD Gross domestic expenditure on research and development
GRECO Group of States against Corruption
GVA Gross value added
GVCs Global value chains
GWP Global Water Partnership
HEI Higher-education institute
HEIA Health equity impact assessment
HERIC Higher Education and Research for Innovation and Competitiveness
Project
HIA Health impact assessment
HIS Health information system
HRM Human resource management
HSC High State Control
IAF International Accreditation Forum
ICSID International Convention for the Settlement of Investment Disputes
ICT Information and communication technology
IHR International health regulations
INTOSAI International Organisation of Supreme Audit Institutions
IPF Investment promotion and facilitation
IPP International Property Protection
IPR Intellectual property rights
ISIS Programme for the implementation of Single European Sky in South East
Europe
ISS Institute for Standardization of Serbia
ITF International Transport Forum
ITS Intelligent transport systems
IWRM Integrated water resource management
KBRA Kosovo Business Registration Agency
KIBO Korea Technology Finance Corporation Act
KIESA Kosovo Investment and Enterprise Support Agency
KOTEC Korean Technology Credit Guarantee Fund
LLL Lifelong learning
LPI Logistics Performance Index
LSCI Liner Shipping Connectivity Index

MAP Multi-annual plan
MFI Micro-finance institution
MFN Most-favoured-nation
MIPEX Migrant Integration Policy Index
MLA Mutual legal assistance
MMF Multilateral Monitoring Framework
NALAS Network of Associations of Local Authorities
NCDs Non-communicable diseases
NECC National Entrepreneurship and Competitiveness Council
NGO Non-governmental organisation
NHP National health policy
NQF National Qualifications Framework
NSBs National standards bodies
NTBs Non-tariff barriers
OGP Open Government Partnership
OSS One-stop shop
PACA Project against Corruption in Albania
PARIS Programme of Accounting Reform and Institutional Strengthening
PBMC Performance-based maintenance contract
PCT Patent Co-operation Treaty
PEM Pan-Euro-Mediterranean
PES Public employment services
PFI Policy framework for investment
PIAAC Programme for the International Assessment of Adult Competencies
PISA Programme for International Student Assessment
PPO Public Procurement Office
PRO Public research organisation
PSP Private sector participation
RAI Regional Anti-Corruption Initiative
RBMP River basin management plans
RCC Regional Cooperation Council
RCC TFCS RCC Task Force on Culture and Society
REBIS Regional Balkans Infrastructure Study
REC Regional Environmental Center
REI Research excellence initiative
RESPA Regional School of Public Administration
RIA Regulatory impact assessment

RIS River information services
RPSEE Regional Programme for Cultural and Natural Heritage in South East
Europe
RTA Regional trade agreement
SAA Stabilisation and Association Agreement
SAEK Support to Anti-Corruption Efforts in Kosovo
SAI Supreme audit institution
SAO State Audit Office
SAP Stabilisation and Association Process
SBAN Serbian Business Angel Network
SCPC State Commission for Prevention of Corruption
SEE South East Europe
SEECEL South East Europe Centre for Entrepreneurial Learning
SEEHN South-Eastern Europe Health Network
SEETO South East Europe Transport Observatory
SES Single European Sky
SIEPA Serbian Investment and Export Agency
SMEs Small and medium-sized enterprises
SPS Sanitary and phytosanitary
STP Science and Technology Park
STRI Service Trade Restrictions Index
SWG Standing Working Group
TEN-T Trans-European Transport Network
TEU Twenty-foot equivalent unit
TFA Trade Facilitation Agreement
TNA Training needs analysis
TTO Technology transfer offices
ULCs Unit labour costs
UNCAC United Nations Convention against Corruption
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Programme
VC Venture capital
VET Vocational education and training
VTS Vessel tracking system
WCO World Customs Organization
WEF World Economic Forum
WFD Water Framework Directive

WGI Worldwide Governance Indicators
WHO World Health Organization
WIPO World Intellectual Property Organization
WISE Western Balkans Research and Innovation Strategy Exercise
WTO World Trade Organization
WTTC World Travel and Tourism Council

EXECUTIVE SUMMARY – 29
Executive summary
Future economic development and the well-being of citizens in South East Europe
(SEE) increasingly depend on greater economic competitiveness. To underpin the drive to
improve competitiveness and foster private investment an integrated policy approach is
needed. This first edition of Competitiveness in South East Europe: A Policy Outlook
(hereafter referred to as the “Competitiveness Outlook 2016”) seeks to help policy makers
in Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia,
Kosovo, Montenegro and Serbia assess their progress towards their growth goals and
benchmark them against i) the good practices adopted by OECD countries and ii) the
performance of their regional peers.
This Competitiveness Outlook 2016 addresses 15 policy dimensions critical to
competitive economies that draw on the South East Europe 2020 Strategy (SEE 2020), a
regional growth strategy drawn up by the Regional Cooperation Council and adopted by
SEE governments in 2013. The qualitative assessments presented herein use scoring
frameworks to enable regional comparisons. The participatory assessment
process brought together regional policy networks and organisations, policy makers,
independent experts and the private sector to create a balanced view of performance.
Main trends
At the beginning of the 21st century, a protracted growth period which saw GDP rise
5% a year enabled the economies of South East Europe covered in this report to narrow
their development gaps with the EU and OECD countries. By 2008, their average PPP
GDP per capita was 30.5% of the EU average, up from 23.4% in 2000.
However, the global economic crisis and its aftermath saw their average GDP growth
slump to an annual 0.8% between 2009 and 2014. Four economies suffered a marked
double-dip recession, while Albania and Kosovo experienced a slow-down in growth.
Unemployment rates are among the highest in Europe – in 2013, average unemployment
was 24%, compared to 10.8% in the EU. Those trends show that strategic policy action is
needed to promote future sources of economic growth, if the six economies are to meet
the SEE 2020 per capita GDP target of 39.7% of the EU average by 2020.
Cross-cutting challenges
While each of the 15 policy dimensions has its own particular obstacles, a number of
cross-cutting challenges emerge. All SEE economies could consider addressing them as
part of their efforts to increase their economic competitiveness.
• A strategic approach to policy making helps governments make more efficient
use of scarce resources in pursuit of their policy goals. Examination of progress
towards SEE 2020 objectives in the economies’ comprehensive policy strategies
reveals wide disparities in policy dimensions.
• Effective policy implementation is hindered by limited capacity and skills
shortages among civil servants.

30 – EXECUTIVE SUMMARY
• Ministries and implementing agencies lack co-ordination mechanisms in many
policy areas, which detract from the effectiveness of policy development and
execution.
• Most dimensions lack robust statistical data and monitoring systems, which
restricts scope for evidence-based policy making.
• Despite legislative requirements for forward planning and co-operation between
government and parliament, legislation is often rushed through, so by-passing
valuable cross-policy stakeholder consultations.
• The pervasiveness of the informal sector (which accounts for up to 30% of
employment in some economies) impinges on tax revenues, the fairness of
competition and vulnerable population groups. Measures to coax informal
businesses and workers into formality are often limited in scope.
• Autonomous agencies, staffed by skilled professionals, should implement policy
in accordance with pre-defined, objective criteria. The lack of autonomy and
professionalism persists in the region.
• Sub-national governments are often underfunded and rely heavily on central
government, which impairs their autonomy and ability to implement policy.
Main recommendations by policy dimension
The comprehensive analyses of the 15 policy dimensions in the Competitiveness
Outlook 2016 give rise to recommendations. Some are listed below. Considering them
could help the SEE economies prioritise policy action as they look to the future:
• Investment Policy and Promotion. Investment promotion strategies could be
implemented more extensively. Similarly, investment promotion agency services
could be more comprehensive, particularly when they address linkages between
foreign investors and local SMEs. Foreign investors’ access to land could be
eased.
• Trade Policy and Facilitation. Non-tariff barriers to trade (particularly barriers
arising from the application of sanitary and phytosanitary measures) could be
further reduced and barriers to trade in services addressed in priority sectors.
• Education and Competences. The quality and relevance of work-based learning
could be improved to equip students with skills and competences relevant to the
labour market. In that regard, the teaching profession could be an area of focus,
with policies to recruit better candidates, improve remuneration and provide
continuous training opportunities for teachers.
• Research & Development and Innovation. The governance of RDI policies
could be improved so that the work of all the relevant actors is fully co-ordinated.
Incentives and support for collaboration between business and academia could be
built into RDI policies and private sector R&D expenditure promoted.
• Digital Society. The provision of broadband services could be further developed
through closer co-operation with the private sector. The development and use of e
commerce needs to be fostered by analysing and removing non-legal barriers,
such as the lack of information on the potential of e commerce and the high cost
of adopting ICT solutions.

competitiveness outlook 2016

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to competitiveness outlook 2016

Similar to competitiveness outlook 2016 (20)

competitiveness outlook 2016