Election cycles and mining-sector governance in post-conflict Kosovo

Abstract

Political business cycles are typically linked to the manipulation of fiscal or monetary policy instruments. In a recent paper, Imami, Lami and Uberti (ILU, 2018) argue that opportunistic politicians may also choose to manipulate non-fiscal/non-monetary policy instruments. Here, we extend ILU's study using time-series data on mining-sector licensing from post-conflict Kosovo (2001-2018). We find robust evidence that is consistent with electoral opportunism in the allocation of mining permits, despite the checks-and-balance mechanisms introduced by Kosovo's international administrators in an attempt to reduce the politicisation of licensing. That said, the cycle effect is only observed prior to scheduled, as opposed to early, elections. Disaggregating the data by license type, in addition, we find that the observed election cycle is driven primarily by the manipulation of licenses for the mining of construction materials. We argue that, in the context of post-conflict Kosovo, this is the category of licenses whose strategic manipulation offers the greatest pay-off to the incumbent. The results raise some questions about the feasibility of fighting political opportunism (and, relatedly, corruption) by establishing formal check-and-balance mechanisms.

Privatization by Auction: Determinants of Asset Prices in Kosovo

“…In contrast, although such incentives were absent in Kosovo, because the SOEs were largely inactive before the announcement of sale, there are Kosovo-specific reasons why duration is negatively associated with price. First, the persistence of clientelism in Kosovo (Uberti et al, 2019), such that a protracted sale process increases the perceived risk of the playing field being tilted in favor of a "well-connected" buyer which, in turn, gives rise to: (i) selfselection in the sense that some people decide not to enter the process; and (ii) more conservative bids from those who do participate, reflecting the increased risk. Second, the duration of the sale is also indicative of the difficulties of completing the sale of an asset due to claims against it.…”

Fiscal Enforcement and Elections in the Context of High Corruption

“…Although the new case-study evidence in this paper is limited to Albania, discussion of the context together with discussion of our approaches to data capture and reporting of our findings will enable readers to assess the external validity of our findings for other countries, particularly developing and post-communist transition economies. Some of the econometric studies establishing patterns of electoral corruption and the wider context of informality and clientelism have already been replicated for Kosovo, a neighbouring country with considerable cultural affinity, while the wider literature cited above documents similar patterns and contexts both in the Balkan region and, further afield, in other transition and developing countries (Uberti et al 2019). Where the evidence base is insufficient to judge the external validity of our findings and their relevance for policy transfer, both the previous econometric studies and the approach of this paper should be replicable for other post-communist transition economies.…”