Western Balkans Competitiveness Outlook 2024: North Macedonia

Reader’s guide

Assessment process

Following the first three Western Balkans Competitiveness Outlook assessments, published in 2016, 2018 and 2021, the fourth assessment cycle was launched on 27 April 2023. In North Macedonia, the cabinet of the Deputy Prime Minister of the Government in charge for Economic Affairs, Coordination of Economic Sectors and Investments held the main role of co-ordinator for the assessment process, while for each of the 15 thematic policy dimensions, a relevant line ministry was delegated as policy dimension co-ordinator responsible for input collection. Once the assessment was launched, the OECD team introduced new digitalised frameworks for assessing each of the 15 policy dimensions. Consisting of qualitative questionnaires and a statistical data sheet, these frameworks were presented and explained by the OECD, with particular attention paid to new questions and indicators.

Following the launch of the assessment, the National Co-ordinators disseminated the assessment materials among the co-ordination network and completed the assessment between April and August 2023. They assigned a score to each qualitative indicator used to assess the policy dimension in question, accompanied by a justification. The completed assessment materials were returned to the OECD team between August and October 2023. The OECD then reviewed the inputs and, where necessary, requested additional information from the National Co-ordinator. The updated assessment materials were sent back to the OECD over the defined period until November 2023.

Upon final completion of the assessment materials, the OECD organised a fact-finding meeting in Skopje on 10 October 2023 to gain a better understanding of the policy landscape, to collect additional information for indicators where necessary, and to discuss the first set of selected draft findings. Based on the additional inputs received and the outcome of the discussions on preliminary analyses and recommendations, the OECD compiled the key findings for each of the 15 policy dimensions. These findings were then presented during a dedicated preliminary findings meeting held on 13 December 2023 and discussed with the National Co-ordinators of the Western Balkan economies. The OECD then held consultations on these findings with local non-government stakeholders, including chambers of commerce, academia and NGOs, in January and February 2024. The draft Competitiveness Outlook economy profile was made available to the Government of North Macedonia for its review and feedback from February to March 2024.

Assessment approach

Coverage

This publication features data from and a comprehensive analysis of the six Western Balkan economies – Albania, Bosnia and Herzegovina, Kosovo*, Montenegro, North Macedonia, and Serbia – and provides a comprehensive analysis of their key sectors, trends, and challenges for achieving convergence with the European Union and OECD area.

The data collection and assessment are standardised for the region, with some differences in the case of Bosnia and Herzegovina. As policy making in Bosnia and Herzegovina is much more decentralised than that in the other Western Balkan economies, information from the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS) as well as from the state level has been taken into account in the assessment and scoring of policy dimensions. While Brčko District was not directly included in the assessment, its policies have been specified in various sections of the report, as appropriate. For more information on the exact methodology of the scoring, refer to the Bosnia and Herzegovina profile of CO 2024.

Timeline

The assessment and monitoring of the policy developments were conducted between 1 March 2021 and 1 March 2024. Any policy changes and new developments after 1 March 2024 have not been considered in the assessment.

Scoring

The assessment comprises a total of 15 policy dimensions that are key to economic competitiveness; these constitute the central building blocks under national economic reform agendas. Each policy dimension is divided into several sub-dimensions (generally between 2 and 4), which are further comprised of granular indicators.

The methodology consists of assessing a total of 147 qualitative indicators across the 15 policy dimensions, presented in Table 1. In addition, there are a total of 265 quantitative indicators that provide insights into the policy outcomes, demonstrating whether policies bring about the desired results and the extent to which they help to achieve the Western Balkans’ socio‑economic convergence with the OECD area and EU.

Table 1. Policy dimensions and indicators

Dimension	No. of qualitative indicators
Investment policy and promotion	8
Trade policy	6
Access to finance	8
Tax policy	11
State-owned enterprises	11
Anti-corruption policy	13
Education policy	9
Employment policy	12
Science, technology and innovation	9
Digital society	11
Transport policy	10
Energy policy	11
Environment policy	10
Agriculture policy	8
Tourism policy	10

The 2024 assessment retains the 0-5 scoring scale from previous cycles. However, the scoring criteria have been revised to reflect current best practices and policy trends in OECD and EU countries, as well as policy developments in the Western Balkans. Each indicator is assigned a numerical score ranging from 0 to 5 based on the level of policy development, implementation and monitoring & evaluation, enabling performance comparison across economies and over time. Level 0 represents the weakest performance, while Level 5 indicates the strongest, signifying a higher level of policy convergence towards OECD good practices and standards.

Each criterion that is met on the scale of Level 0 to Level 5 indicates a level of policy sophistication. This form of scoring allows for more nuanced score progression along the scale, and permits the consideration of more refined inputs in scoring. For this assessment, the OECD team has also prepared simplified versions of the scoring methodology, using benchmark criteria to better illustrate the rationale behind the scores. It is only a simplified representation, however, and does not encompass all the elements that influence the scoring. Table 2 presents an example indicator for accommodation quality (Tourism policy), with assessed criteria in the second column.

As part of the current assessment cycle, the Western Balkans Competitiveness Data Hub (https://westernbalkans-competitiveness.oecd.org/) has also been developed to access all the scores by indicator, showcasing the fulfilment of criteria by each economy and offering the rationale behind scores. Scores can be explored through policy dimensions as well as over time, and in comparison to other Western Balkan economies.

Table 2. Competitiveness Outlook scoring system: A sample indicator – accommodation quality

Score level	Policy requirements	Criterion met
Level 0	A consistent accommodation quality standard framework has been adopted.	✓
	Measures facilitating investments in high-quality private accommodation development or renovation have been adopted.	✓
	Measures facilitating investments in renovation or in building up new high-quality private accommodation are implemented.	✓
	Accommodation quality standard framework is in the process of implementation.	✓
	Energy efficiency requirements are included in the accommodation quality standard framework.	✓
	Regular inspection of quality standards is in place.	X
	Requirements for persons with disabilities are included in the quality standards for accommodation.
	The sharing economy is regulated.	X
	Accommodation facilities that enhance energy efficiency efforts are supported by the government.	X
	Regular monitoring of the accommodation framework is conducted.	X
Level 5	An independent ex post evaluation has been conducted to assess the effectiveness of the implemented measures and to take corrective action.	X
	Score for North Macedonia	2.5

Notes: The indicator and criteria shown in the table above do not reflect the actual score for North Macedonia and are included solely for demonstration purposes. Moreover, there is no methodology for specific criteria being assessed, which would translate directly into a score. In other words, no criterion necessarily results in a score increase.

The final scores represent a simple average of all indicators, and not individual sub-dimensions. Table 3 illustrates an example of the dimension scoring system and thus the final scores. The number of indicators included in each sub-dimension varies depending on the complexity and scope of the policy area concerned. Therefore, the sample average of the sub-dimension scores can be different from the final dimension scores.

Table 3. Competitiveness Outlook scoring system: A sample presentation of dimension scores

Dimension	Sub-dimension	2018 score	2021 score	2024 score	2024 WB6 average
Investment policy and promotion	1.1: Investment policy framework			3.7	3.9
	1.2: Investment promotion and facilitation			3.3	3.3
	1.3: Mobilising sustainable investment			2.3	2.8
North Macedonia’s overall score		3.3	3.0	3.2	3.4

For further details on the Competitiveness Outlook methodology and individual scores for each indicator, as well as the changes in scope compared to the last assessment cycle in 2021, please refer to the detailed assessment methodology on the Western Balkans Competitiveness Data Hub.

Comparability

The Western Balkans Competitiveness Outlook reflects a continual process of methodological refinement aimed at enhancing the robustness and comparability of indicators. However, evolving policy trends in the OECD area and EU Member States, alongside shifting priorities in the Western Balkans, can sometimes make a direct comparison of scores difficult over time. In the 2024 edition, scores are compared back to 2021 and 2018. Due to vast methodological changes, direct comparisons to the first edition in 2016 are not feasible.

Since the 2018 edition, indicators have also been reorganised into different sub-dimensions, reflecting the policy aspects that are of key importance for the Western Balkans. This does not have any impact on the overall score comparability, i.e. dimension scores remain comparable. However, sub-dimension scores cannot be compared across earlier editions.