ABSTRACT
Owing to the relatively slow pace of privatization and the weakness of inward investment into most of the Western Balkan countries, the economic development of the region has been highly reliant on the performance and vitality of domestic entrepreneurs who have created new small-and medium-sized enterprises (SMEs). These new entrepreneurial businesses have been the main source of job creation for workers who have lost their jobs in the declining socialownership and state-ownership sectors. They have introduced a critical element of competition and dynamism into these transforming post-conflict economies, challenging the established monopolies and powerful coalitions which have sought to stall reforms, preserve the status quo and maintain their privileged positions gained during the chaos of the early transition, wars and civil conflicts. In addition, the development of the SME sector has had an important social role in developing a middle class capable of supporting democratic consolidation, and in ensuring a wider dispersion of income among the many thousands of new entrepreneurs and away from the top echelons of the managerial elite in large enterprises.
