ABSTRACT
This chapter examines the deep and persistent social and economic disparities across the Western Balkans, highlighting their implications for European Union (EU) integration and the region's capacity for sustainable and resilient transformation. Despite moderate convergence with EU averages, the region is characterised by structural inequalities in incomes, education systems and labour markets that have emerged from the transition process. Using comparative indicators, the chapter identifies both inter- and intra-country disparities, with rural–urban divides, youth unemployment and weak social protection systems as major obstacles to inclusive development. While external assistance including the EU's Economic and Investment Plan has sought to boost growth through infrastructure investments, its impact on disparities has been constrained by weak governance and pervasive elements of state capture, while the New Growth Plan barely mentions the issue of inequalities. The chapter argues that reducing inequalities is not only a question of fairness but also of developing a more inclusive model of development to underpin sustainable and resilient economies and societies. It underlines that future accession assistance should prioritise the implementation of the EU Pillar of Social Rights, rather than relying on growth models based on extractive institutions and trickle-down policies that rely on subsidies to foreign investors, as these will likely worsen disparities and undermine the stability needed for future prosperity.
