Debt in the super-periphery: the case of the Western Balkans

The article covers the evolution of external and public debt in six Western Balkan countries in the context of their regional position as a super-periphery of the EU. Stemming from the core-periphery relationship, we find that the region’s external and public debt position has increased to alarming levels since the onset of the economic and financial crisis of the eurozone. In response to the crisis effects, international financial institutions and the EU have recommended policies of fiscal consolidation and structural reforms. However, ruling parties in the super-periphery have been reluctant to apply such measures, as the growth of public debt has supported widespread practice of clientelism and patronage to maintain public support in the face of increased unemployment and rising inequality. Only more recently has the increased level of debt forced governments of the region to apply austerity measures to overcome external imbalances. However, the implementation of such largely unpopular measures has also been associated with a drift towards illiberal democracy and more authoritarian forms of governance