Vladimir Gligorov

Balkanisation: Frozen Conflicts, Connectivity, and Politics

Introduction
The Balkans is one region where frozen conflicts abound. Historically, they have come
about due to political fragmentation, i.e. Balkanisation, and after external interventions. Those
have elicited European and international involvements, often large-scale interventions.
Currently, there is a range of frozen or post-frozen conflicts in this region. And the international
involvement, multilateral and bilateral, is as extensive as it has ever been. Therefore, the region
provides evidence both of the reasons for conflicts and of the effectiveness of international
influence.
First, a typology of frozen conflicts will be provided. Then those will be shortly
discussed. Discussion of how they can be managed and eventually ended will follow. The role
of increased trade and other types of connectivity and their contribution to conflict resolution
will be assessed. Finally, short term and long term economic and social effects will be
evaluated. Conclusions end this policy paper.

Frozen Conflicts: A Typology

Frozen conflicts are about unresolved territorial claims. They are frozen because they
are unresolved. And they are different from other international conflicts, whether cold or
burning, in that they are territorial. As such, they draw, redraw, or strengthen borders similar
to what characterises a ceasefire. Within these borders as drawn, authorities, i.e. monopolies of
coercive power, emerge with dubious legality and legitimacy. Basically, those are the people
and forces that control the contested territory. Their internal legality is usually based on some
type of a martial law, while externally they tend to lack international recognition and thus
legality (which does not mean that they are not subject to international law and indeed, these
are outlaw people and regimes). Internal legitimacy is usually not the premise of exercise of
power, while external legitimacy is non-existent even if these are de facto sovereign decision-
makers.
Frozen conflict emerges usually as consequence of an attempt at secession or
annexation. There are differences between the two. The key one being that annexation is
strongly discouraged by international law and politics (as is interference in internal affairs in
general) while secession does not have to be (due to considerations of self-determination).
1
Often, however, one is an instrument of the other. In any case, if the outcome is a frozen conflict
that means that the intended outcome, either the annexation of a territory or territorial
secession, has failed to be achieved.
Frozen conflicts can be managed internally or with international involvement. Put
differently, those are either de jure or de facto frozen conflicts. The difference is that in the
former case there is the international recognition of the existence of the conflict over a territory
and international involvement in the management and in the attempt at the resolution, so it is a
kind of legalisation of the frozen conflict. In the latter case, the conflict is internal, and most
often not recognised as legitimate, thus an international involvement may in fact not be
welcomed.
With these two dimensions in mind secession or annexation and de jure or de facto
the following typology can be constructed.

Table 1.
Typology of most important frozen conflicts in the Balkans

de jure de facto

secession Kosovo (2008) Kosovo 1991-1998

annexation Croatia (1991), Republika Srpska

Bosnia and Herzegovina Northern Kosovo
(1992-1995)

Some key Balkan examples are identified in this typology. There are others that will be
commented on below also. These conflicts have emerged in the process or the aftermath of the
Balkanisation or dissolution of Yugoslavia. Historically, there are many other examples of
frozen conflicts in the Balkans, which are connected with previous bouts of Balkanisations.1
But, in general, state and nation building process in the Balkans has been characterised with
various types of frozen conflicts, which tended to be resolved by international interventions
and by wider European and World Wars.
Still the most instructive for contemporary policy considerations and interventions are
those that emerged as consequences of the dissolution of Yugoslavia in 1991-1992, of the wars

1
Of course, the case of Cyprus should also be kept in mind, but then also many others in the Mediterranean.

2
that followed, and of the internal and international peace-making and state-building efforts.
Those are represented in the above typology and will be mostly discussed in this paper.2

Changing Geography of Animosity: Some Balkan Examples

Balkan examples of frozen conflicts are useful because a number of them have been
resolved while some have indeed persisted. So, there are examples of how conflicts end and
why and when they tend to get entrenched.3 Generally, there has been a process of
normalisation, which has led to significant changes in the geography of animosity, which is to
say in the number and intensity of conflicts over territories. On the bases of these examples and
developments, we can assess the effectiveness of available instruments to freeze a conflict first
and then resolve it or at least achieve some degree of normalisation.
The first example is an attempt at annexation by Serbia of parts of Croatia. By the end
of 1991, after several months of military and civil conflicts, the Croatian territories controlled
by Serbia became a typical case of a frozen conflict. They were run locally, with indirect
military and financial support by Serbia. There was heavy international, UN involvement that
aimed at keeping the conflict frozen while pushing for a negotiated solution. The main
instruments used were sanctions on Serbia (from 1992) and offers of proposals for
constitutional changes in Croatia to reintegrate the territories under Serbian control into
Croatia. In that, freezing the conflict meant reestablishment of the international border between
Serbia and Croatia with international control while proposing the removal of the borders
between the Serbian control territories and the rest of Croatia. The former aim was achieved at
least in principle, while the latter met with strong resistance by the authorities in the Serbian
controlled territories recognition before connectivity was what they demanded. In the end,
internationally mediated negotiations failed, Serbia kept getting weaker, not just because of the
sanctions but also due to the costs of the parallel war in Bosnia and Herzegovina, and in the
end Croatian army reconquered the territories under Serbian control in 1995.
Even more important is the example of Bosnia and Herzegovina. Similarly to Croatia,
but only a bit later, at the beginning of 1992, Serbian population seceded from what had become
an independent state of Bosnia and Herzegovina with the intention of annexing to Serbia. As
is often the case with conflicts over territories that eventually end up being frozen (that was
also the case in Croatia), the territory of the Serbian Republic of Bosnia and Herzegovina, or

2
The literature is enormous. I have contributed to it over a long period of time. See e.g. Gligorov 1994, 1995, and
2012.
3
For more details see Gligorov 2016a.

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Republika Srpska, which is the name it goes by now, was not determined ahead of the decision
to secede. Prolonged war ensued with ever more intense international involvement. In addition
to Serbs, the Croats in that state also declared its own state, Herzeg-Bosna, and carved a
territory for themselves. The international strategy was to freeze the conflict and pressure the
conflicting parties to adopt a constitutional agreement to save the existence of the country.
Pressure was put on Serbia with sanctions and on Croatia diplomatically to disengage from
Bosnia and Herzegovina at least directly. In the end, Croatia gave up its territorial claims in
exchange for the international support of its effort to retake its own territories under Serbian
control, while Serbia settled for a peace agreement, the so-called Dayton Agreement, in
exchange for the cessation of hostilities as the encroaching Croatian army had threatened to
completely overrun the Serbian forces holding to Republika Srpska. Again, in the case of
Bosnia and Herzegovina, international intervention aimed at strengthening the border between
Serbia and Bosnia and Herzegovina and mediating the negotiations on the internal borders.
Only after the issue of the control over territories was settled, measures to increase connectivity
could be introduced.
Kosovo presents a different but also far-reaching example of a frozen conflict. Initially,
in 1991, a referendum to secede was held in what was at that time Serbian Autonomous
Province. The outcome was an internal secession, or what can be classified as a de facto frozen
conflict over the control of the territory of Kosovo. Another term for that could be internal
secession. In any case, no significant internationalisation of this conflict happened until about
1998. Kosovo was under martial law, with parallel and informal state institutions. In terms of
economic connections, Kosovo was part of Serbia, while in political terms it was a separate
political entity, with its own system of taxation and provision of public services (of education
most notably). Kosovo functioned as a parallel, de facto state, as an internally seceded territory.
Starting with 1998, an armed insurrection erupted and international involvement, primarily via
the Security Council of the United Nations, started to intensify. Eventually, it was deemed that
humanitarian concerns warranted international, NATO, intervention, which indeed took place
in the first half of 1999, though without the approval by the UN. Eventually, post factum, the
Security Council legalised the intervention of the NATO forces and initiated the process of
conflict resolution between Serbia and Kosovo with its resolution 1244. The negotiations
between Serbia and Kosovo, mediated by the Security Council, failed which led to the
declaration of independence of Kosovo (in 2008), which the ruling of the International Court
of Justice (in 2010) found not to be in violation of international law and indeed to be consistent

4
with the resolution 1244. Thus, this frozen conflict was resolved by an international military,
political, and legal intervention.
Though most frozen conflicts in the Balkans were resolved in the sense of normalisation
between different states, which is to say that the cross-border animosity over the control of
territories may have been removed, there are still de facto frozen conflicts, which are over
intended annexations and secessions. The most important example is Republika Srpska,
(Serbian Republic), which is a political entity within Bosnia and Herzegovina, but is in many
ways run as an annexed territory of Serbia with the intention of it eventually seceding from
Bosnia and Herzegovina. This is the consequence of the constitutional arrangement adopted as
part of the Dayton Agreement. The constitution violates some basic characteristics of the spirit
of constitutionalism (it is based on ethnic rather than human rights) and was imposed rather
than adopted through a constitutional process within the country which it is supposed to apply
to. So, it is an imposed constitution with questionable legality and legitimacy. It perpetuates a
de facto frozen conflict and fuels interests in both annexation and secession.
The other important de facto frozen conflict is that of Northern Kosovo. This is the part
of Kosovo territory that is basically run as if annexed by Serbia. The initial international
intention was to put together a constitution, which would be adopted by the Security Council
and would constitute the basis for Kosovos independence. In that, Northern Kosovo would get
autonomy, which however would not be anything like that of Republika Srpska. That attempt
of international solution for a double frozen conflict failed, because the Security Council due
to Russias veto did not adopt the so-called Ahtisaari Plan. However, after Kosovo declared
independence and especially after the ruling by the International Court of Justice, negotiations
between Kosovo and Serbia mediated by the European Union resulted in an agreement,
Brussels Agreement, which is similar to the Ahtisaari Plan for Northern Kosovo, though this
agreement still needs to be implemented. In the interim, Northern Kosovo is mostly run as if it
has been de facto annexed by Serbia, though there is gradual erosion of Serbias influence in
that region. In any case, international efforts continue to be towards increased normalisation of
relations between Serbia and Kosovo. That should transform the geography of animosity into
a normalised political geography.
There are other examples of frozen conflicts in the Balkans that have been resolved
with three types of instruments: military or security interventions, constitution building, and
international interventions, politically and legal, to further normalisation. Prominent example
is the internal conflict over territorial control in Macedonia in 2001, which was resolved by
constitutional and political means with at times heavy international involvement. This country
5
also provides an example of a conflict, which is also a persistent one, but is not a frozen conflict
because it does not involve contested territorial claims. There is also the conflict with Greece
over the name of the country. It is an intractable conflict, but does not involve the type of
animosity that conflicts over territories, warm or frozen, flare up and continue to fuel.

The Assignment Problem

An important condition for both the freezing of a conflict and for its eventual resolution
is the ability for international intervention of a universal organisation like the United Nations.
In the case of the Balkanisation in 1990s, there was a near agreement among the permanent
members of the Security Council on the principles, goals, and instruments of the resolution of
the wars and frozen conflicts. Most importantly, there was an agreement between the EU, the
USA, and Russia. Even with that near consensus, it took quite a while to freeze the conflicts
first, and then to resolve some of them. With disagreements reappearing especially over the
Ahtisaari Plan, international effectiveness diminished and some de facto frozen conflicts
persisted and are yet to be resolved. So, in the cases in which there is no international agreement
or it is hard to come to one, not only wars are hard to stop, but frozen conflicts tend to become
permanent.
The ability to act determines the targets and the instruments of both sides to the conflict
but also of the international actors. A frozen conflict emerges if the sides to the conflict cannot
achieve what they aim at and the international intervention is not adequate to resolving the
conflict. That result is an assignment problem, i.e. the target is chosen by the instruments that
are available. Those can be interim targets and the instruments appropriate for hitting those
may make others accessible and so lead to one or the other final outcome. So it is hoped that
increased connectivity will eventually resolve the conflict one way or the other (Table 2).
A frozen conflict in itself is already a solution to a problem to open war. So, freezing
a conflict and maintaining it is one goal of both the parties to the conflict and of the international
community or its respective organisations. The conditions for the freezing of a conflict and for
maintaining it can differ, but usually involve some show of disagreement with the intended
aims of conflicting parties and some forms of normalisation. In the Balkan cases, the show of
disagreement involved an introduction of sanctions, while normalisation meant increased
connections, in particular economic ones, i.e. removal of sanctions, in order to make the use of
force less attractive to and normalisation in the interest of the conflicting parties.

Table 2.
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 Assigning targets to instruments
Instruments

connectivity coercion agreement

frozen conflict trade, movement sanctions normalisation

Targets failure to regime change military constitution
annex or secede victory
success to
annex or secede acceptance military legalisation
victory

The normalisation through connectivity strategy aims at the resolution of the conflict
by peaceful means. In the Balkan cases, that aim has mostly failed to materialise. The reason
is that solving the problem of borders takes precedence over the normalisation and increased
connectivity. In the end, frozen conflicts have been resolved either by one of the parties in the
conflict winning the war or by international military imposition. Otherwise, those have
persisted. Most of the resolutions have been aimed at denying the conflicting parties the
achievement of their aims, e.g. the failure of annexation or secession. In general, international
involvement with the aim to changing of the pre-conflict borders is more of an exception than
a rule.
However, in the prominent case of Kosovo, secession was internationally sanctioned,
at least post factum, and also de facto secessions have been tolerated as in the case of Republika
Srpska and Northern Kosovo. The expectation has been that the latter will be internally
resolved perhaps on the example of the constitution building in Macedonia. And that most
importantly increased economic and social connectivity will support the process of conflict
resolution and constitution building. This has proved to be very difficult to replicate in the
cases in which clear military resolution did not take place or no determined international
agreement on the needed political intervention was possible.
So, in general, frozen conflicts are resolved by force more often if not exclusively by
one of the sides winning the war, after the collapse of the maintenance of the conflict as frozen,
which is why the management of frozen conflicts is more often than not aimed at their
maintenance, rather than at their resolution, in order to avoid the resort to the use of military
means. Clearly, the success of maintaining a frozen conflict depends on the stakes of war being
too high for the parties in conflict. Where the conflicts were resolved by military interventions

7
that was the consequence of the one of the sides being weakened e.g. by sanctions or by losing
the support of a powerful ally. As a rule, stability and normalisation after the resolution of a
frozen conflict has been sustained with increased political and legal interventions and with
improved connectivity or interdependence.

Connectivity: Trade and Other Normalisations

Once a conflict over the control of a territory is frozen, the interim target of political
efforts is normalisation with the final aim of conflict resolution. As freezing the conflict means
also dealing with the new or stricter borders, one instrument of normalisation is facilitation of
economic and other contacts, i.e. connectivity. Primarily, this is about improved conditions for
cross-border trade. The challenge is that the arrangements which are needed for increased
connectivity have to be made directly or indirectly with illegal and illegitimate authorities or
holders of power. The interest of those authorities is to get some kind of international
recognition, which they can use to enhance their internal legitimacy. With that end in mind, the
control of the border is crucially important for the people in charge of the territory of the frozen
conflict. This interest has to be weighed against the needs of the population under their control,
which supports increased trade and other means of connecting over the borders. In the case of
annexation, the border with the annexing country is usually open or accessible, which is why
the support of the annexing country is crucial.
In the Balkan cases, Serbia was and is crucial for the maintenance of the frozen conflicts
as well as for their resolution. In the case of Bosnia and Herzegovina, Croatia is also important
as it essentially controls the territory of so-called Herzeg-Bosna, which is not as clearly
delineated as that of Republika Srpska, but is similarly de facto annexed. In the case of Kosovo,
Albania has been more accessible, even though it has not had involvement in the conflict over
the territory of Kosovo. So, the challenge of the policy of enhancing connectivity is to increase
the importance of crossing the border with the country whose territory is being annexed or is
subject to secession at the same time avoiding the legalisation and legitimisation of the
authorities in change of the contested territory.
One instrument is to limit, in fact, the connectivity with the annexing country, if that is
the cause for the existence of the frozen conflict. That means an introduction of some kind of
a regime of sanctions. On the other hand, there are measures of trade and other types of
liberalisations, which should increase the interest for cross-border connectivity with the rest of
the world and with the countries involved in the frozen conflict. There are, however, limits to
what can be achieved by facilitation of greater connectivity even when it comes to
8
normalisation, let alone for the resolution of the frozen conflict. There are many reasons why
that is the case, but perhaps an example will clarify them the best.
During the war in Bosnia and Herzegovina, trade did not stop over the war lines. Indeed,
an internal market developed which was called Arizona Road or Market. Clearly, this was an
informal market, not only because there was no effective authority to regulate and supervise it,
but also because it was used as a sanctions busting device as well as for smuggling and for
engaging in all kinds of illegal trade (arms, humans, drugs). It made an impression on the
international observers and representatives because it seemed to indicate that the animosity that
they thought was driving the conflict, i.e. ethnic hatred, mattered only so much. Trade and
economic interests mattered more, both individually and collectively. This thinking influenced
at least partly the construction of the Dayton Constitution and the strategy of the international
financial institutions in the period of post-war reconstruction. The control over territory was
not considered fundamental, while trade and financial liberalisation were seen as instruments
not just of increased connectivity, but of normalisation and in the end of political integration.
As a consequence, fiscal integration was not considered to be important, which is why the
central government has rather limited fiscal power, or at least had until the state wide system
of VAT was introduced. Still, the government does not have a significant budget and has
practically no taxing authority, so that fiscal power is devolved to the two entities and ten
cantons.
Market integration, however, proved to be rather ineffectual instrument of
normalisation and state building while fiscal devolution proved to be the enduring obstacle to
political integration. The same can be said for the regulatory devolution, which is also almost
complete, except in the areas dealing with foreign trade. Indeed, from the economic point of
view, the state is based on two pillars on the indirect taxation system (VAT) and on the central
bank that manages a currency board regime. Everything else is territorially devolved and
indeed maintains the internal territorial divisions and the system of de facto annexation of the
Serbian Republic to the Republic of Serbia. So, as long as the fiscal system is territorially
segmented, the conflict can continue to be frozen because the conflict over the control of the
territory has not been resolved. In turn, fiscal disintegration together with regulatory devolution
stands in the way of trade and economic connectivity. It continues to be hard to cross internal
borders for trade and investment in this country.
It is somewhat different when it comes to the regime of sanctions, which is usually
aimed at the change of the policy of the target country. In the case of Serbia, two regimes of
sanctions were tried. Initially, a rather comprehensive regime was introduced, which basically
9
prohibited any trade or financial dealings with the country. That proved successful in military
and economic terms, but not politically. Serbia was weakened and its ability to finance the
annexed territories in Croatia and Bosnia and Herzegovina was crippled. Also, there were limits
to inflationary financing of the war and the military, as it led to ever faster inflation, a process
which ended with a hyperinflation. So, price stabilisation at the beginning of 1994 also
signalled the end to the support for the frozen conflicts and open wars. However, once the wars
and frozen territories were lost, there was no political change in Serbia itself. People and the
government capitulated, but the people did not demand the overthrow of the government.
Indeed, the government was strengthened as it gained legitimacy as a signatory to the Dayton
Agreement which also led to the removal of the sanctions.
Next time around, however, when the crisis in Kosovo erupted, and after the war ended,
a targeted system of sanctions was introduced. It aimed at the interests of the ruling elite. The
aim was to turn members of the elite against each other and to severe the bonds of patriotism
between the people and the leaders. So, the business people were unhappy with the government
and the people blamed the government for the lost wars and for the high costs those incurred.
That in the end brought the Serbian government down in 2000. In the aftermath, the regime of
sanctions was discontinued.
So, there are limits to connectivity as an instrument of normalisation or frozen conflicts
resolutions. The key reason is that increased cross-border trade, investments, and movement
need to be agreed on with authorities that lack legal standing and international legitimacy. They
are bound to see increased connectivity as a means to erode their hold on power and will also
use it to increase the resources they need to hold on to the power. Their key resource indeed
being the continued control over the contested territory.

International Interventions
In addition to military and interventions that work on economic incentives, e.g.
sanctions and cross-border connections, the international community can intervene in other
ways, of which legal interventions have proved to be important and influential in the cases of
frozen and other conflicts in the Balkans.
Perhaps the most important case is that of the ruling of International Court of Justice
(ICJ) on the legality of Kosovos secession.4 The arguments and the ruling itself are extremely

4
Most of what I say in this paper is based on the ruling of the ICJ and on the submitted arguments. The full list
of documents at ICJ 2010.

10
important as they apply to all types of frozen conflicts and provide guidance to the policy of
the international community in dealing with those. Summarising the arguments is not necessary
here; the question of interest is the effectiveness of the legal intervention to resolving conflicts
over territories. The ruling indeed made a difference to Serbias policy towards Kosovo. And
also contributes to the resolution of the remaining conflict over Northern Kosovo, even though
the progress is slow.
The ruling makes it clear that internationally supervised, i.e. by the Security Council,
process of secession does not violate international law and so does not warrant military or other
coercive actions against the seceding country. The impact of the ruling in Serbia was one of
disappointment, but it also made it possible for the government to adopt the policy of
normalisation with Kosovo. Over time, this will also lead to the integration of Northern Kosovo
with Kosovo, and this de facto annexation will end. This is somewhat of a specific example
because the implementation was not a problem, Kosovo being already independent from
Serbia. In addition, the actions of the Security Council were taken with the agreement of all the
permanent members, so there was no basis for e.g. Russia to push for further maintenance of
the frozen conflict, though it did not recognise Kosovos independence (as a number of other
countries, including member states of the EU). The ruling also made it possible to include
Kosovo in regional trade and other organisations, which is to say supported growing
connectivity.
Legal intervention has also been supportive of normalisation through the actions of the
International Criminal Tribunal for Former Yugoslavia. Again, due to the decision by the
Security Council, this Court has dealt with many war and crimes against humanity including
genocide. The effect has been that some of the tensions not just political but social too have
eased, even though not as much as one would have hoped for. What the Tribunal was tasked to
do was to deal with injustices, which usually stand in the way of post-conflict normalisation
process. Indeed, frozen conflicts initiate significant movements of population besides other
injustices and those, both harms and crimes, stand in the way of reconciliation. The best way
to deal with those is through the courts. Other means have proved less effective or enduring.
International tribunals are helpful in that respect even though their ruling may not be considered
fair or justified, as court rulings are often seen. Still, some types of actions are ruled out and
that provides an environment for normalisation and social stabilisation. Similar role can now
be played by the International Criminal Court. In the case of the Tribunal, implementation took
time, but was eventually forthcoming and practically all those indicted have been brought to
trial.
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 ICJ played a role also in the complaints that Serbian and Croatian governments were
involved in genocide. The Court ruled that Serbian government indeed violated the convention
on genocide in Bosnia and Herzegovina, but did not itself commit acts of genocide there. In
addition, the ICJ threw out the competing complaints by the Serbian and the Croatian
governments that they committed acts of genocide in their military conflict. There may be more
complaints coming up, but the sum total of these interventions by the ICJ has been positive in
the sense that it is easier for people and the institutions to communicate and cooperate.
In all these cases, implementation has not been a problem or that problem has been
solved. This is not so in the two other cases. One is the ruling by the European Court of Justice
in the case of Sejdi-Finci versus Bosnia and Herzegovina and in the case of Macedonia versus
Greece ruled on by the ICJ.
The B&H case goes to the heart of the constitutional problem of the country. Rights
and political participation spring from ethnic identity rather than from citizenship. Basically,
individuals are represented as members of an ethnic community and their right are also, at least
in practice, attached to their collective identity. That basically rules out democracy. In addition,
it divides the territory across ethnic lines. The European Court of Justice ruled against Bosnia
and Herzegovina, but the implementation is of course on the governments and parliaments of
Bosnia and Herzegovina, and the two political entities, which have vested interest not to
comply. The EU has tried to push for implementation, by making that a condition for
negotiations, but that has not had the desired effect.
In the other case, ICJ has ruled in favour of Macedonia and its right to seek membership
in international organisation without Greece vetoing that, but that decision has not been
implemented. The ruling applies to Macedonias right to negotiated with the EU for
membership. The EU has been unable to implement the decision because it cannot overcome
Greeces veto.
In general, legal intervention can have significant influence on frozen conflicts because
those are explicitly about rights and wrongs, and about legality and legitimacy. Those also
support normalisation and social and economic connectivity as they right some wrongs and
provide justice. The key problem is implementability, where in many cases there is no
agreement in the international community and in particular in the Security Council and in other
multilateral organisations. Still, even in the cases in which one or the other decision of the
courts cannot be implemented, the ruling itself can have significant political and social
consequences. E.g. if a leader is sanctioned by the Criminal Court or an annexation is ruled

12
illegal by the ICJ, those decisions can affect the legality and the legitimacy of those leaders or
the actions of their states.
Clearly, things change if there is no agreement in the Security Council. Then, conflicts
that have been resolved or are on the way to be resolved can revert to being frozen again. This
is in part what is happening with Republika Srpska as Russia continues to walk away from
supporting the process of state building in Bosnia and Herzegovina. In general, if the
multilateral institutions cannot act, then they cannot manage either the process of
normalisation, increased connectivity, or that of conflict resolution. In a way, Balkan examples
discussed in this paper are special cases because for the most part the international community
was speaking with one voice, at least to the extent that it can ever do that. In most other cases,
and especially at the moment, there is hardly an agreement on how to stop civil wars let alone
how to resolve frozen conflicts. In effect, freezing territorial conflicts is the most that
international institutions are capable of.

Economic Consequences5
Even a cursory look at the economic performance of the Yugoslav countries that were
involved in conflicts over territories or have been affected by those illustrates that economic
consequences have been rather negative. This despite concerted efforts by international actors
to increase economic connectivity within and without the countries and the region.
The most ambitious policy intervention has been the one that has aimed at regional
liberalisation and economic cooperation. Immediately after the end of the war in Bosnia and
Herzegovina, regional strategy for Southeast Europe was initiated and was reinforced after the
war in Kosovo in 1999. After the year 2000, the men who were most obstructive of regional
cooperation and also most responsible for the disintegration of Yugoslavia and there region,
the Serbian and Croatian presidents, were out of power. In addition, EU finally decided to
promise membership to all the countries of the Western Balkans in 2003. Also, from 1999,
Stability Pact for Southeast Europe was put together by the USA and the EU with the explicit
task to further regional cooperation and especially regional investments, in infrastructure
projects in particular. In pursuant to this regional strategy, bilateral free trade agreements were
supported and eventually a regional free trade agreement, CEFTA, was negotiated and became
operational. Currently, there is another regional initiative called the Berlin Process that should
support cross border infrastructure investments in particular.

5
Some data on economic development of the Balkans can be found in Gligorov 2016b.

13
 So, the region is in advanced stages of the implementation of the strategy of
connectivity. However, the effects have been somewhat modest.
In terms of resolving frozen conflicts, increased economic connectivity has not been
consequential. Borders have become easier to cross as political problems have been solved by
legal or other force, but by themselves increased ease to trade and do business has not initiated
changes in territorial and other political conflicts. Why is that?
As long as a frozen conflict persists, as in the case of Bosnia and Herzegovina or
Kosovo, lack of legality and legitimacy exact heavy tolls on economic opportunities and
especially on investments. But even after these conflicts are resolved or at least there is
normalisation, there are long term legacies of persistent de facto territorial conflicts and of
biased political preferences. In addition, and most importantly, the usual policy instruments
tend to be either unavailable or less than effective.
For instance, as a rule, monetary policy is practically immobilised because of currency
substitution. Most countries in the Balkans have turned to using foreign currencies, most euro
now, as a way to insure themselves against devaluations and inflations. At best, fixed exchange
rate regime is available to the central banks. That usually means that economy is performing
under conditions of monetary austerity. With such monetary policy, fiscal austerity is also more
probable because of the fear for the stability of the exchange rate. Thus, both monetary and
fiscal policy will be almost immobilised.
The actual regulatory framework is going to be biased towards the oligarchy because
this is usually the outcome of prolonged periods of illegality and illegitimacy. In the Balkans,
it will take some more time before the hold on the economy by those who have enriched
themselves by profiting from the conflict are replaced by other entrepreneurs and new
generation of politicians. The regulation even if it is adopted tends not to be implemented
informal rules are those that regulate rather than laws that the parliaments pass.
By far the most damaging effect of prolonged frozen conflict even after normalisation
is weak labour market. Lack of effective policy instruments contribute to it, but also the lack
of responsiveness on the part of the government. Countries plagued with internal territorial
problems or with external territorial obligations have governments that tend not to base their
legitimacy on economic performance, but on either patriotism or fear of instability. Even if
democratic decision-making is introduced and even if most of the population is concerned with
economic and in particular with problems of employment, the vote will tend to go to patriotic
parties that either promise that they will not give up or that they will at least provide security
and stability. In the Yugoslav countries, unemployment rates of more than 15 or 20 percent for
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decades are not exceptional and still mostly parties promising patriotic policies get elected.
This is changing, but mostly as regional and cross-border territorial problems are being solved.
But, for instance, Bosnia and Herzegovina and Kosovo are still at the very beginning of this
process. And some of the other countries can revert to patriotic and nationalistic policies rather
easily.
Going back to regional strategy and to the regional free trade agreement, there is no
doubt that trade has increased and possibly cross border investments too. However, investments
in infrastructure that crosses borders are much more difficult to undertake. Similarly, cross
border or regional production networking is quite limited. Also, there is scarce presence of
multinational companies with regional strategies. Overall trade and other connections are
recovering, but mostly as the consequence of the solution to territorial and political problems
rather than being the instrument that helps these conflicts to be solved.

Conclusions
Improving cross border connections, economic and social, makes frozen conflicts more
stable and easier to bear, but hardly ever succeed as instruments of conflict resolution. Usually,
show of force, more often actual one rather than as just a threat, resolve the conflict one way
or the other. Legal instruments, i.e. reliance on the international courts, may prove helpful in
overcoming the legacies of frozen conflicts. Also, together with international security
interventions, they can help the process of constitution building which is a necessary condition
for stable normalisation and enduring political solution. By contrast, imposed constitutions
tend not to be politically self-sustaining and can erect obstacles to enduring solution to conflicts
over territories. Finally, international intervention can be effective if it indeed represents the
will of the international community, which requires agreement in the Security Council.
International courts can substitute for that will, though their decisions face significant problems
with implementation.
When it comes to connectivity in particular, it can facilitate cross-border trade and
movement of people, but it cannot improve more significantly on the persistent negative
economic effects in territories that are managed as frozen conflicts. The authorities lack
legitimacy and legality and have very constrained policy space. Also, their hold on power
depends more on managing fears and on coercion then on welfare consequences of their
economic policies. That also means that democratisation is not to be expected either as the
consequence of the imposition of sanctions or as a response to the promise of their removal. In

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general, normalisation, democratisation, and economic and institutional development require
that frozen conflicts are resolved, legally and politically preferably.

References
Gligorov, V. (1994), Why Do Countries Break Up? The Case of Yugoslavia. Acta Universitatis
Upsaliensis.
Gligorov, V. (1995), What If They Will Not Give Up?, East European Politics and Societies
9: 499-512.
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Gligorov, V. (2012), Neoclassicism in the Balkans and Other Essays. Paris: Civis.
Gligroov, V. (2016a), Legitimacy: Yugoslav Lessons for Ukraine, wiiw Essays and
Occasional Papers 2.
Gligorov, V. (2016b), Elusive Developments in the Balkans: Research Findings, wiiw Policy
Note/Policy Report No. 17.
ISJ (2010), http://www.icj-cij.org/

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