The Balkans as a Hierarchical Market Economy

Abstract

The Balkan capitalism has been classified as: Coordinated, Liberal, Mediterranean and as a version of the region itself. Nevertheless, such classifications do not consider the hierarchical economy levels of the region, which for developing countries is a very important feature. Schneider classified the Latin American economies as hierarchical and points out such classification could be applied to middle-income economies of other regions of the world. The aim of the paper is to show that Balkan economies can be considered as hierarchical. To do that, we estimate a Hierarchical Economy index to both regions (Balkans and Latin America). Besides, we test the relationship between inequality and the hierarchical levels (suggested by Schneider). Results show Balkan economies can be classified as hierarchical, because their hierarchical economy indexes are similar to those presented by Latin American economies and there is a negative relationship between inequality and the hierarchical levels among middle-income countries.

Keywords

• hierarchical market economy
• balkans
• latin america
• lack of competitiveness
• inequality