CEVES Flagship Report No. 1

Governing for Competitiveness

A baseline assessment of Serbia's economic governance through the lens of competitiveness and EU accession preparedness.

March 2026 · Centre for Advanced Economic Studies (CEVES) · Funded by the European Union

Key Findings

25
years to convergence

At current rates, Serbia's productivity would take some 25 years to converge with the EU average.

9:1
state aid ratio

State aid for large FDI investors (€434M) exceeds support for SMEs (€48M) by a factor of nine.

20%+
REER appreciation

Real effective exchange rate appreciation since 2016 is eroding Serbia's manufacturing comparative advantage.

7.3%
of GDP

Record public investment in 2024, yet the largest projects bypass standard appraisal and procurement procedures.

Report Sections

Chapter I

Introduction

Assessment through the lens of competitiveness and EU accession criteria.

Chapter II

A Decade of Uneven Convergence

Productivity catch-up has not matched the volume of capital absorbed.

Chapter III

The Trade Competitiveness Challenge

A manufactured Dutch Disease eroding Serbia's comparative advantage.

Chapter IV

A Dysfunctional Executive

Administrative dysfunction and political parallelism undermine the business environment.

Chapter V

Resource Allocation

What the budget reveals about governance constraints and delivery archetypes.

Chapter VI

State Aid and Industrial Policy

Alignment gaps and what they would concretely change.

Chapter VII

Public Investment

Developed on paper, but the largest projects bypass standard procedures.

Chapter VIII

Procurement

Framework aligned, but transparency absent for the largest investments.

Chapter IX

Conclusion

Baseline diagnosis and the dual governance challenge.

Annex

Policy Recommendations

Three tiers of actionable recommendations.

About This Report

This is a baseline report that assesses Serbia's economic governance through the lens of competitiveness. CEVES aims to update this assessment on an annual basis.