OECD Multidimensional Reviews (MDR) provide governments with concrete policy advice for their development strategies. They identify the main constraints to more equitable and sustainable growth, and propose priorities for policy intervention.

The Western Balkans have come a long way. In the last couple of decades, most of the region’s economies experienced dynamic growth and financial expansion. Leveraging on their well-educated labour force and international relations, the region’s economies opened up and attracted significant investments. Income levels and living standards increased. The EU integration process helped drive democratisation, peace and institution building, creating new opportunities.

The Western Balkan economies – Albania, Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia – are at important crossroads on their development pathways. After significant achievements during their socio-economic transitions of the last decades, pressing challenges still remain. Faltering growth has stressed the urgency of finding new sources of productivity growth and new engines for economic and structural transformation. Underperforming labour markets leave many without attractive opportunities, pushing them to migrate outward. Inequalities and large pockets of poverty persist. High levels of air pollution, on the back of unsustainable energy mixes, degrade the quality of life. In order to make the region an attractive place to live, work and invest in, this report focuses on three strategic priorities.

This chapter presents the key findings and recommendations of the second volume of the Multi-dimensional Review of the Western Balkans. It focuses on boosting education and competencies; fostering social cohesion; and ensuring a green recovery and energy transition. In view of the ongoing COVID-19 pandemic, the chapter also provides a brief analysis of the socio-economic impact of the crisis.